Did you see the Fed announcement? .25%

Did you see the news?

The Fed cut interest rates by 0.25%.

If you look at the headlines, (as a buyer or homeowner), you may be thinking about going out to celebrate. 

But... I have to be the bearer of bad news.

(Or at least, the "real" news).

While the Fed did cut the federal funds rate, that does not mean mortgage rates dropped 0.25% this morning.

In fact, they might not move much at all.

Here is the thing most people don't realize: The Mortgage market moves ahead of the Fed, not after it.

The markets had already "priced in" this cut weeks ago. That is why we saw the 30-year fixed rate ease down to roughly 6.2% recently. The lowest level we have seen in weeks.

So, what does this actually mean for you?

1. The "Drop" already happened. Since mortgage rates track the 10-year Treasury yield (and investor expectations), the relief we are seeing now is the reaction to the Fed cut. It happened before the announcement was even made.
2. We are on a "Long Glide Path." Forecasters like Fannie Mae don't see rates plummeting overnight. They are projecting rates to hover around 6% through the end of next year.
3. Don't wait for "Unicorn" rates. Analysts have said we need to hit 5% to truly "unfreeze" the market, but that isn't happening in the near term.

Here is the bottom line: If you are sitting on the sidelines waiting for the Fed to magically slash mortgage rates to 3% again... you might be waiting a very long time.

However, 6.2% is a lot better than where we were a year ago (6-7.6%).

If you want to know exactly what a 6.2% rate looks like for your monthly payment on a home in your price range, just reply to this email with "RATES" and I’ll send you a quick breakdown with one of our lender partners.

Talk soon!

PS: Our new website is up. This took way too long to get up and running, but glad it's done - Check it out