The Federal Reserve cut the short-term interest rates by half a percentage point yesterday. This was the first decrease in interest rates by the Federal Reserve since 2003. What does this mean for people looking to buy real estate or for the real estate market?

The interest rates on consumer debt, car loans, and home equity lines of credit will benefit the most from the rate drop. The stock market also benefited from the Fed’s actions. Home loan rates, however, will not be significantly impacted by the interest rate decrease since these loans are more closely related to inflation. Homebuyers stuck with subprime loans hoping to refinance won’t be helped out as much as previously thought.