Federal Reserve interest rate cut could impact Twin Cities housing market

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The Federal Reserve slashed the interest rate by 0.5% Tuesday because of concerns over COVID-19.

The chairman says the committee is trying to help the United States' economy stay strong, but the move still didn't comfort investors panicked by the virus. 

The rate cut could have an impact on the Twin Cities housing market. 

There's already a shortage of homes for sale and the rate cut could bring more buyers into the market.

"It's good for buyers because you can afford more for a less monthly payment," realtor Joe Garofalo with Keller Williams Realty said. "So we're going to have probably a larger spike of buyers." 

Current low rates have already caused a boom in refinancing activity. Demand among home-buyers remains high, in spite of the short supply of homes for sale. As a result, experts say lenders don't need to give Americans much more incentive to apply for new home loans.

More from KSTP: 

Why now is a good time to buy or refinance a home

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