Yes, The Fed Will Cut Rates, But Not Mortgage Rates

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Posted To: Mortgage Rate Watch

You may have heard that the Federal Reserve is highly likely to cut rates this week. That is true. It’s happening tomorrow . It would be a big surprise for financial markets if the Fed did NOT cut rates at this point. You may be wondering if this means anything for mortgage rates or worse, you may actually be convinced that a Fed rate cut means lower mortgage rates. The only mortgage rates that have anything to do with the Fed Funds Rate (the thing the Fed cuts or hikes) are those associated with some home equity lines of credit (HELOCs). But when it comes to 1st mortgages, and most 2nd mortgages, any impact from the Fed’s rate cut has long since been felt. That’s because the bond market that dictates mortgage rates can move in real-time whereas the Fed only meets once every 6 weeks. So if…(read more)

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