Federal Reserve cuts interest rates

For the third time since July, the Federal Reserve is cutting interest rates.

That could prompt more people to apply for credit cards and loans, including mortgages, which dropped 5% nationally this month.

Since August, existing home sales are down, more than 2% nationally. In the Midwest, it's more than 3%.

With mortgage applications jumping up marginally, last week saw a nearly 12% kick, according to the Mortgage Bankers Association.

But sales are up, thanks to a favorable market.

"I've been doing this for a long time and these are some of the lowest rates we've ever seen. Today, our 30-year rate is 3.75%. That could potentially drop 3.5% easily," said Leanne Holzer, Capital Credit Union mortgage operations manager.

And they did. Wednesday, the federal reserve brought the rate down a quarter of a percent. Now 3.5%.

"We took this step to help keep the U.S. Economy strong in the face of global developments, and to provide some insurance against on-going risks," said Jerome Powell, Federal Reserve Chairman.

With house prices increasing but buyers decreasing, the lowering interest rate may be the catalyst to entice newer buyers.

"If you've got someone looking at buying a house and financing $100,000 that could potentially drop their rate by $60 a month,” Holzer said.

Saving consumers tens of thousands over the life of the mortgage.

Mortgage experts urge potential home buyers to get pre-qualified for a loan, since market adjustments affect how much you pay.