By: Brendan Wewer, Commonwealth Commercial Appraisal Group
On September 17, the Federal Reserve cut its benchmark interest rate by a quarter point for the first time in nine months. Economists say this may be the start of a series of cuts meant to ease borrowing—but it won’t magically solve affordability. Fed Chair Jerome Powell called the move “a risk-management cut,” aimed at protecting jobs, while cautioning that with inflation still above the 2% target, there is “no risk-free path” forward. Headlines like this often spark hope that mortgage rates will finally come down or that financing for businesses will suddenly loosen. The reality is more complicated.
Why Housing Relief May Not Arrive Quickly
Most homeowners today are effectively handcuffed to their current mortgages. Roughly two-thirds of U.S. mortgages sit around 4% or lower, while today’s new loans are closer to 6–7%. Walking away from that low rate is tough, it’s like being married to your mortgage. And in today’s expensive, inflationary world, it’s a marriage of necessity, not of choice.
Downsizing into a smaller, cheaper house can even mean paying more each month because of today’s higher interest rates. Here in Berks County, there still aren’t enough homes for sale compared to before the pandemic. With fewer options on the market, sales activity remains sluggish.
And while the Fed influences borrowing costs, it doesn’t directly control mortgage rates. Those are tied more to long-term bond markets and how cautious banks are feeling. Many lenders have been especially cautious lately, so even with Powell’s rate cut, don’t expect mortgage rates in Berks County to fall right away—or by the same amount.
What It Means for Commercial Real Estate
For local businesses and investors, the Fed’s cut won’t change things overnight. Borrowing for commercial projects is still decided by how cautious banks feel, what’s happening in the bond market, and the type of property involved. Rates may tick down a little, but the bigger risk is that the job market softens, and customers pull back on spending. In this environment, the projects that get financed will be the ones backed by solid demand and trusted relationships with lenders. Simply put, smart deals will still move forward, while weaker ones will stall.
What to Do Instead of Just Watching the Fed
Instead of waiting for interest rates to drop, local homeowners and buyers can take proactive steps right now:
- Get pre-approved early. Even if you’re not ready to buy tomorrow, talking to a lender helps you understand what rate you would actually qualify for, not just what’s in the headlines.
- Ask your realtor about supply in your price range. In Berks County, competition and affordability varies by school district, township, and price range.
- Factor in ownership costs beyond the mortgage. Insurance, property taxes, and utilities are all rising, and they can swing affordability more than a quarter-point rate cut.
- Consider alternatives and stay flexible. For homeowners “handcuffed” to low rates, it may make more sense to invest in updates that fit your current stage of life or wait for the right timing (kids finishing school, retirement, etc.) rather than downsizing right now. Flexibility is key: keeping an open mind on location, amenities, or renovation needs often leads to the best opportunities.
The Local Takeaway
For Berks County, the September rate cut is notable, but it’s far from a silver bullet. Housing affordability will remain tight because inventory is limited, and many owners are still handcuffed to their low-rate mortgages. On the commercial side, lenders remain active and willing to place capital, though they are selective and favor projects with sustainable demand drivers. In other words, the Fed sets the backdrop, but the real story plays out locally—whether that’s buyers working closely with their realtor, or businesses approaching deals with discipline. Success depends less on the Fed’s next move and more on the choices we make here at home.