Over the past few years, elevated mortgage rates and sky-high housing prices have contributed to a lack of home affordability.

Historically, stock investors have been big winners when the Fed slashes rates. Robert Johnson, finance professor at the Heider College of Business at Creighton University in Omaha, Nebraska, found that, from 1966 through 2023, the S&P 500 index returned 16.4% when the Fed lowered interest rates but only 6.2% when the Fed hiked rates.

The Fed’s decision to cut the benchmark interest rate by a half point on Wednesday could spur a new wave of home renovations as more people ready their properties for sale or take advantage of cheaper improvement loans.