T
he Federal Reserve's recent decision to cut interest rates is expected to have a significant impact on the Austin real estate market. After months of speculation, the Fed made its first interest rate cut since 2020, with Chair Jerome Powell announcing plans for more cuts later this year and into next year.

    According to Olivia Vale, an Austin-based realtor, the move aims to make borrowing more attractive by cooling inflation. "Inflation is easing up, and the Fed recognizes that," she said. "So, rates have dropped to make borrowing a little bit more appealing again."

    For homebuyers in the Austin area, this means it's a great time to buy, especially with prices having improved since peaking in 2022. Vale advises buyers to take advantage of low prices now and refinance later when rates are solidly low.

    However, if you're looking to sell, Vale recommends holding off until spring 2025, when there will be more buyers on the market and a greater chance of multiple offers. With several more interest rate cuts expected, mortgage rates may ultimately land in the fours or fives, taking around a year or a year and a half to stabilize.

    As inflation eases up, Vale expects home prices to normalize, returning to a 5-10% increase rather than the 40% surge seen during the pandemic. Mortgage rates don't directly follow interest rates, with many lenders already factoring in the Fed's move.