9/19/2024

Folks, before you get too excited about the recent Federal Reserve announcement to lower the Federal Funds Rate, and are hoping for a sudden drop in mortgage rates, just understand a few things:

The Federal Reserve does not directly impact mortgage rates.  That is a function of the Bond Prices.  Bond prices are based (in part) on public supply and demand, risk, market expectations, etc..  And collectively, Bond Market analysts are far more astute than the Federal Reserve Board. 

Need proof?

Bond Traders understood market factors impacting inflation and the economy as early as last October, and already reacted.  And as a result, mortgage rates have quietly improved about 1.25% since last October. 

And how much did the Federal Reserve lower rates since last October?  That’s right – they didn’t. 

So for those who were waiting for the Federal Reserve to lower the Federal Funds rate before buying or refinancing, you’re late to the party.

Sure mortgage rates may have already made a move, but a lower Federal Reserve rate means lower consumer credit costs, and that’s VERY good for the economy (which is not as healthy as we’ve all been led to believe) and the economy sure could use a little help.  A reduction in the Federal Funds rate will help that greatly. 

So if you need a home, don’t be late to the party – call your Favorite Trusted Real Estate Agent and just go buy a home.

Cheers!

Jay Atterstrom
Regional Branch Manager 
Primary Residential Mortgage, Inc.
jay.atterstrom@primeres.com
(214) 377-0033
(214) 417-1000

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Thank you for the information.

kommonsentsjane