Fed Cuts Rate by .50==Multi-Family Financing Still Unknown

Fed Cuts Rate by 50 Basis Points, Impact on Multi-Family Financing Still Unknown
The Federal Reserve today ordered an emergency interest rate cut of half a percentage point, knocking the key rate down to 1.5 percent.

The Fed fund rate is the interest rate that banks charge each other for overnight loans.
While this cut will help lower credit card rates as well as rates on automobile loans and business loans, MORTGAGE RATES may not fall so easily.

Typically, a reduction in the Fed funds rates does eventually lead to a fall in mortgage rates. Currently though, investors are so nervous that they do not want to own mortgage debt and industry experts believe this will keep those rates high. The spread between the Fed funds rate and mortgage rate is also unusually high rate now.

It is too early to tell how this rate cut will impact the interest rates for multifamily borrowing.