---
title: "Fed Cuts Rates 50 Basis Points: What It Means for Housing | The Beaker"
description: The Fed's biggest non-COVID rate cut since 2008 is here. What it means for homebuying, millennial homeownership gaps, refinancing demand, and SFR rental affordability. The Beaker.
---

[PlanOmatic Blog | Insights on Property Marketing and Management ](https://www.planomatic.com/blog)

# [Fed Cuts Rates 50 Basis Points: What It Means for Housing | The Beaker](https://www.planomatic.com/blog/the-rate-is-over)

 Written by [PlanOmatic](https://www.planomatic.com/blog/author/planomatic) | May 19, 2026 4:11:29 PM

In today’s edition:

- The Fed begins easing
- A closer look at homeownership rates
- 3D tour usage surges

### 🎯 What’s Stirring

It’s finally here. The big announcement. Can’t wait to tell my grandkids where I was when Fed Chair Powell cut the fed funds rate by 50 basis points in September 2024 - the biggest non-COVID rate cut since 2008! Or at least that’s how I had built it up in my head. Would there be fireworks? A parade? Nope. [Volatile trading](https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html), an [increase in the 10-year Treasury](https://www.cnbc.com/2024/09/26/the-fed-slashed-interest-rates-last-week-but-treasury-yields-are-rising-whats-going-on-.html), and a [skeptical Jamie Dimon](https://www.globest.com/2024/09/26/jamie-dimon-is-still-a-skeptic-on-the-economy/) is all we got. And come to find out life today looks eerily similar to the days before it happened.

Why? From what I gather it centers around uncertainty. Uncertainty about the election, about geopolitics, about the strength of consumer spending despite all the reasons it shouldn’t be so strong. Amidst all this noise it appears the Fed is trying to carve a path of certainty - a slow, steady, boring, undeterred march forward. And boring is exactly what we need right now.

 

- **Fed Chair Powell says the Fed can’t fix the housing crisis**, [in a post-meeting press conference after announcing the rate cut.](https://finance.yahoo.com/news/jerome-powell-says-fed-cut-174454770.html) While a decrease in rates should ease the lock-in effect slightly and free up some inventory, he acknowledged that supply is still a concern in housing. He predicted that as rates decrease, the housing cycle should start to normalize. Likewise, Lawrence Yun (Chief Economist at NAR) [cited a $50k increase](https://www.linkedin.com/posts/lawrence-yun-592a76146_the-feds-half-point-rate-cut-decision-is-activity-7242237383755145217-roME?utm_source=share&utm_medium=member_desktop) in buying power for homebuyers who can afford a $2k monthly mortgage payment based on the movement in mortgage rates following the Fed’s decision. While rate cuts in and of themselves will not lead to a straight line down for mortgage rates, they will definitely provide some much needed relief. *For a great breakdown of what the Fed Rate cut means - *[*check out this video*](https://www.wsj.com/video/series/on-the-news/the-fed-rate-cut-is-here-our-correspondent-explains-what-at-stake/1864FD2C-9216-4156-B131-C81ED7BC2F7B)* by WSJ.*
- **The homeownership rate for millennials is even lower than expected**, [according to a new report by Apartment List](https://www.apartmentlist.com/research/millennial-homeownership-2024). The standard measure of homeownership from the Census Bureau estimated the homeownership rate at 45.5% for Millennials in 2023, compared to 70%, 74%, and 65% for the Silent Generation, Baby Boomers, and Gen X respectively. But this standard measure simply looks at the share of owner-occupied homes, not the individual. The concrete example provided: if a home has 2 adult children living with their 2 parents, the old way of measuring that would count the home as 100% owned, but by looking at individuals only 50% would count toward the homeownership rate. With the growing trend of adults remaining at home well into their 20’s and even 30’s, this difference matters. In [another chart](https://www.apartmentlist.com/research/rethinking-how-we-measure-homeownership) from Apartment List it shows that for the 25-34 age range, if you look at homeownership rate at the household level it shows 43%, but at the individual level it decreases dramatically to 33%. Back in the 1980’s these numbers were nearly identical, and in recent decades they have increasingly diverged.
- **Affordability for rental homes is improving**, [according to the latest rental report from](https://www.realtor.com/research/august-2024-rent/) [Realtor.com](http://realtor.com/). Rent has declined on a year-over-year basis for the 13th month in a row for 0-2 bedroom properties, while median income has increased. Last year in August the rent-to-income ratio stood at 25.9% nationwide, compared to August 2024 at 25.1%. The report also highlights the most affordable markets in the country based on this rent-to-income ratio: Oklahoma City (18.2%), Columbus (18.9%), Austin (19.5%), Minneapolis (19.8%), and Kansas City (20.2%). And these markets saw a notable *increase* in affordability since last year: Miami, Tampa, San Diego, Nashville, and Charlotte. While affordability issues won’t be solved overnight, these trends have persisted in the right direction for consumers and are expected to continue.
- **A ‘mini boom’ in refinancing applications is here**, [according to the latest numbers from the Mortgage Bankers Association](https://www.cnbc.com/2024/09/25/mortgage-refinance-boom-takes-hold-as-weekly-demand-surges-20percent.html). In the last week of September, refinancing applications increased 20% over the previous week and are up 175% over the same week last year. This is happening in the wake of the average interest rate for the 30-year fixed dropping from 7.41% last year to 6.13% now. [Some are cautioning](https://www.linkedin.com/posts/dianaolick_mortgage-refinance-boom-takes-hold-as-weekly-activity-7244688656324521984-vqoY?utm_source=share&utm_medium=member_desktop) that while these numbers are worth tracking, it is important to remember that these increases are coming off very low numbers. Mortgage applications to purchase a home were up only 2% over the same week last year, largely due to the large majority of existing mortgages locked in at rates under 4% and the well-documented affordability issues in the for-sale market.

### 📊 PlanOlabs Insights

*Proprietary insights into the SFR industry from our research and consulting team*

[🎥](https://www.loom.com/share/11af3956b158436881199b729631098b) [➡️](https://www.loom.com/share/11af3956b158436881199b729631098b) [Check out the video](https://www.loom.com/share/11af3956b158436881199b729631098b) for a look at this month’s insights.

##### Insight #1: Months’ Supply of Existing Homes is as highest level since May 2020

##### Insight #2: 3D Tour usage on SFR listings has increased significantly

##### Insight #3: Index of Economic Conditions and Consumer Expectations are diverging

For other industry insights from PlanOlabs, [visit our blog here](https://www.planomatic.com/blog/).

### 📰 SFR In The News

*Everyone knows this stuff and you should too.*

- [Invitation Homes](https://www.costar.com/article/895552697/invitation-homes-spends-216-million-on-build-to-rent-projects-in-60-days) spends $216m on [Build-to-Rent](https://finance.yahoo.com/news/invitation-homes-acquires-580-homes-170121812.html)
- [Core Spaces](https://www.multihousingnews.com/core-spaces-breaks-ground-on-denver-btr-project/) breaks ground on BTR project

*The Beaker is a bi-weekly briefing from *[*PlanOmatic*](https://www.planomatic.com/)* on the economy, housing, and the forces shaping both. Have something we should cover? Reply to this email.*

*Follow us: *[*LinkedIn*](https://www.linkedin.com/company/planomatic)* | *[*planomatic.com*](http://planomatic.com/)

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