How will the Fed Rate Cut change Lending in Hawaii?

This morning I received an email from Chase mortgage bank : "With the Fed's lowering the discount rate yesterday, Chase officially announces that we're lowering our prime rate to 7.75% (from 8.25%). This rate reduction is effective immediately for all HELOC transactions. "

Clearly we are immediately seeing things get easier for 2nd mortgage borrowers. First mortgages take a bit longer to get the benefit. At first the stock market rallies, causing bond prices to go down, and rates to come up. But after a week or two, everything should work out and 1st mortgage rates should come down to below where they are now.

In the end, it should be a little easier to buy a house in Oahu, since the cost to borrow will be less and less over the next year. A home in Hawaii Kai that would have cost you $5000/ month (had you bought a month ago) might cost you $4700/ month if you buy it today.

There will probably be a rush to refinance mortgages this month and next, and I'm sure every loan officer is getting dozens of emails and calls today from their past client who want to see what rates are.

The bottom line is that this rate cut is a huge benefit to the Hawaii real estate market, and buyers should be far more motivated than they have been. We hope.

I have about $10million in listings right now, so I would really like to get them sold soon!