Mortgage Minute: Where Are Rates Headed?

DID YOU KNOW that the most searched question last month relating to mortgage rates was, "Will mortgage rates go down?"

The search was prompted by the highly anticipated September 17th meeting of the Federal Reserve Board. Around September 4th is when the Federal Reserve Chair, Jerome Powell, made comments indicating there could be the possibility of a rate cut at the next meeting on September 17th. Mortgage rates responded favorably to these comments.

However, since the meeting on September 17th where the Fed did cut the Fed Funds rate by 25 bps, mortgage rates have actually increased. What most people did not realize is that the market had already priced in the 25 bps rate cut back around September 4th. What most people also do not realize is that the Fed Funds rate does not control mortgage rates. Mortgage rates are controlled by a variety of factors, namely inflation, jobs reports, and unemployment rates.

The Fed's voting members have made their own statements about whether future cuts this year are likely --some are in favor of large cuts while other members are in favor of no cuts as most see inflation continuing to rise.

Personally, I think there will be at least 1 more rate cut this year but it will be a small 25 bps.

Regardless of whether mortgage rates will decline, property values continue to increase. As the saying goes, it's better to MARRY THE HOUSE and DATE THE RATE!