Federal reserve cuts key interest rate while Houston homebuyers waiting for another cut

HOUSTON, Texas (KTRK) -- Trimmed and decorated from the inside out, Marisa Guzman's townhome in The Heights was a gift she always wanted to give herself.

"Christmas came early for me. Yes!" Guzman said.

A lifelong renter, Guzman, had hoped to buy the townhome, but with the median cost of Houston homes being just under $340,000, as well as the interest, it made it feel more like a dream than reality.

"Before I purchased the home, I thought even with a good jobs that I like, it would still be a few years. Maybe more than a few years before I was going to be able to afford a house," Guzman said.

So when she saw a home in the neighborhood she liked at a price point she could afford and a decent interest rate, she couldn't say no.

"When this came up on the market kind of out of nowhere, I was shocked with the price, area, and location, which is important. I kind of just jumped on it," Guzman said.

She is one of 38% of Houstonians who can afford a median-priced home.

"It's a great feeling to say, 'Let's go to my house.' It's really my home. I won it," Guzman said.

Professions like Thomas Mouton, who works with the Houston Association of Realtors, hope that percentage will grow now that the federal reserve is cutting interests.

"Man, our market is thriving. I mean, it's pretty consistent right now. We are seeing an uptick in sales," Mouton said.

Even though interest rates are being cut, these rates determine what the banks will pay, not what your mortgage rate will be.

The hope is that the banks will pass on the lower rates to the borrower. The most recent cut brought the interest rate down to about 4.5%. The federal reserve plans to cut more over the next year. As people keep their fingers crossed for better financing in the future, some are holding back.

"They were spoiled three and four years ago with interest rates being down at 2% and 3%. That's just not the reality right now for our market," Mouton said.

Overall, Mouton said Houston is in a good spot. The home prices are much lower compared to similarly sized cities.

He says while the rates aren't as low as they were a few years ago, now can still be a good time to invest.

"It's a nice nest egg to invest in. Once they pay the mortgage off or get close, they have something in the war chest that they have," Mouton said.

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