Economists and financial experts say the benefits of reduced interest rates may be harder to feel in Western Washington.

On Wednesday, Federal Reserve Chair Jerome Powell announced that it would reduce the federal funds rate, the cost it takes to borrow money, half a percent to 4.75%

The result means that credit card and auto loan interest rates will decrease. Many lenders have already cut the borrowing costs for home mortgages starting in the spring in anticipation of this reduction, according to a report from Zillow. The firm estimates the reduction could save an average of $1,200 a month on mortgage payments.

That figure though, is nationally based and the reality in Western Washington is more murky, according to Daryl Fairweather, the chief economist for Redfin.

Redfin posted a report showing sales of existing homes is at the lowest point since 2012, noting potential buyers are waiting out interest rates.

“The Seattle market is a market that is quite supply constrained, so lower rates will likely lead to higher home prices and you might not see lower monthly mortgage payments in the end,” Fairweather said.

While inflation inspired the years of rising interest rates, WAFD Bank CEO Brent Beardall believes rising prices were not the primary driver for rates beginning to decrease.

“It used to be the risks were towards inflation, now I think the risks have changed and it’s more towards the job market,” Beardall said.

Overall, Beardall believes the economy is strong. But, an August jobs report that wasn’t robust as expected, combined with an unemployment rate inching up to 4.2% was starting to show signs the Federal Reserve went too far to address inflation.

“This is good news. This means the FED has done what we were all hoping they would do which is a soft landing for the economy: To be able to get inflation under control without having to kill the jobs market,” Beardall said.

Beardall believes hiring will remain robust in Western Washington due to the region’s share of corporate headquarters.

Prices won’t be returning to the point they were in 2020, Beardall says that kind of deflation would have a significant negative impacts on the stock market.

The rate decrease represents a shift from a savings-favored economy to a borrowing-favored economy. Returns from high-yield savings or CD accounts won’t be as lucrative as they have been in the past few years.

“The last thing you want to do is pull your money from a high-rate CD and rush into the stock market, chasing higher-yeilds but also encountering higher risk so you have to be careful,” said Lisa Weil, a certified financial planner. “Things are always in flux, things are always changing and so if you are reacting constantly to the outside changes, you lose sight of what your goals are.”