The Federal Reserve recently cut interest rates, sparking hope for lower mortgage rates. While experts acknowledge the Fed's influence on borrowing costs, they emphasize that mortgage rates are not directly tied to the federal funds rate and can fluctuate independently. Despite the absence of a Fed meeting in October, some predict continued declines in mortgage rates.
On September 18, 2024, the Federal Reserve announced a 50 basis point cut to the federal funds rate. For homebuyers faced with record-high mortgage rates in the post-pandemic era, this was welcome news. Many had been prepping for a rate cut in hopes mortgage rates would fall after the September Fed meeting. Those readying themselves for cheaper home loans were given reason for optimism about September's mortgage rate forecast when the Fed delivered a larger-than-anticipated rate cut.
'Right now, the economy is running pretty strong but if labor market conditions weaken considerably, that could lead to a more sizable drop in interest rates,' says Lisa Sturtevant, PhD and chief economist at Bright MLS.Explore the top mortgage loan options available to you here.
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