BAKERSFIELD, Calif.(KBAK/KBFX) — The recent federal interest rate cut is anticipated to invigorate the economy nationwide, providing a significant boost to various business sectors locally.
Richard Gearhart, a professor of economics at California State University, Bakersfield, said the cut will have a substantial impact on Bakersfield, particularly in the housing market.
“So what you’re going to see is you’re going to see a lot more individuals who now find it financially feasible to be able to get a mortgage because rather than 7.5% interest on a $500,000 house, you’re going to be paying 6% on a $500,000 house,” said Gearhart. “So home buyers will be more attracted to buying homes, which will increase prices a little bit, which will encourage more people to sell their homes. So we’re going to see a lot more home buying and home selling activity in Kern County, especially movement from the Bay Area and the Los Angeles Basin.”
Gearhart also noted that the interest rate cuts will be welcomed by those in debt, as they will benefit from paying back at a lower rate.