The Fed is NOT Cutting Mortgage Rates

⭐️ NEWS FLASH ⭐️

Freddie Mac reports that the US weekly average INTEREST RATE was 6.08%, down 0.01% from the previous week & 1.23% lower than the same time last year!

What everyone needs to understand now that the FED is reducing their FED FUND RATE—

Remember, the Fed is NOT cutting MORTGAGE RATES.

What is the FED FUND RATE?

It’s the overnight rate that banks lend to one another.

The FED FUND RATE directly impacts short-term rates—like credit cards, car loans, personal/business loans, etc. It has an INDIRECT AFFECT on MORTGAGES.

As the Fed cuts their rate, mortgage rates can go either way.

What the “heck” does that mean?

Here’s an easy way to think about it:

✅ People will be spending less on short-term loans and have more money to spend on other things, which can cause prices to rise.

✅ Businesses can borrow cheaper now, and that sometimes leads to creating more economic activity!

However, there’s a perception issue—The Fed has had higher rates for so long that I think they can reduce a bunch more and it could still CONTROL INFLATION.

The Fed is signaling that they’ll reduce another 50 bps this year and possibly up to 100 bps next year!!

The INITIAL CUTS could be the “deepest” so the cuts next year might be .25% each time vs. the .50% we just saw.

Where we are vulnerable: jobs.

If unemployment starts to climb, we may see deeper cuts.

Thank you SO much for this info @rmspiegel I really appreciate your words of wisdom and clear explanations of all of this!

💬 Do you have any questions? Curious how all of this affects you?! Contact Robert today and he’d be happy to help!

📩 Thinking about BUYING or SELLING? Message me today, I can’t wait to hear from YOU!