We're breaking down the businesses that stand to benefit most when borrowing gets cheaper.

Today, on Motley Fool Money.

I'm Emily Flippen, and today I'm Emily Flippen, and today I'm joined by analyst Jason Hall and David Meyer to discuss

the industries and businesses that are actually impacted by interest rates.

After last week signaling from Federal Reserve Chair Jerome Powell at Jackson Hole,

that will likely be looking at least one rate cut this year. It's fair to ask what the real

impact may be. We'll touch on bond proxy stocks and financials, but to start real estate.

Now, Dave, you've talked a lot in the past about how Home Builder sentiment has reached new lows,

but mortgage rates are directly tied to Federal Reserve policies, and many argue that all it would take is a few basis points and lower rates to really quickly ignite that real estate demand.

Do you think that actually will come to fruition, especially given the other environmental impacts that we're seeing today?

I think it'll take more than a few basis points, but directionally, I think this is correct.

I mean, lower interest rates help

home builders in so many different ways. First, the lower rates make it easier for potential

buyers, and that defects demand. So, yeah, with lower rates, you could see demand rise. Plus,

the other thing is right now, home builders are giving lots of

incentives away in order to get people to make a purchase within a higher interest rate environment.

So lower rates could actually mean less builder incentives and potentially more profitability

for the builder on a per build basis. So clearly buying and building houses are big decisions and they take

time. But I think lower rates being a catalyst for additional building can help other macro

variables over time as well. One thing about home builders is important too is they're also

big consumers of debt and usually for long periods of time because they buy land that they hold for multiple years and they finance that land because they just don't have a bunch of cash laying around. So it helps them on both ends of their balance sheet and operating statement. That's a good point, Jason. But I'll play devil's advocate here, too, which is to say, we still see affordability at all time lows. And I don't know if there's necessarily

going to be. We presume that there's a bunch of people sitting on the sidelines waiting for

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