If the FED cut rates, why are mortgage rates still rising?
If you’re wondering why mortgage rates are climbing even after the recent Federal Reserve rate cut, you’re not alone. It can feel counterintuitive, but here’s a straightforward look at what’s happening and what it means for your buying or refinancing plans.
Quick Breakdown:
FED Cuts ≠ Mortgage Rate Drops
Mortgage rates actually respond to long-term economic outlooks rather than short-term Fed rate changes. This often means that when the Fed cuts rates, mortgage rates might still rise if the economic forecast feels uncertain.Recession Concerns Drive Rates Up
Recently, a larger-than-expected Fed cut actually spooked the markets, raising fears of a recession. The result? Higher mortgage rates to offset potential economic risk.Election Years Create Market Volatility
Historically, mortgage rates experience more fluctuation during election years. The uncertainty can keep rates moving up and down until after the results are in.Strong Job Market Keeps Rates High
With job numbers holding strong, the Fed has less pressure to keep rates low. But remember, economic data is constantly evolving, and adjustments happen frequently.Uncertain Future of Rate Drops
While rates might drop in the future, there's no guarantee they’ll dip soon. For now, locking in today’s rate could be a smart move, with a plan to refinance when rates eventually fall.
Your Next Steps
If you’re ready to act, now might be the time to lock in a mortgage rate before they rise further. When rates go down, that’s the perfect time to refinance. If you have any questions, reach out to us at Own Marin – we’re always here to guide you through the market and help you make smart investments.