Federal Reserve Cuts Interest Rates by 0.25%: Impact on Mortgage Rates?

Watch the Federal Reserve Press Conference today where they cut the treasury rate by 0.25 %.

Since the pandemic when the economy took a major turn, I've been following this closely, and I've seen their concerned tone over the years turn to a positive one. 

Of course the federal fund rate cut does not mean that mortgage rates will be reduced. So let's watch and see!

In case you are wondering, here's a brief synopsis of the difference between the two rates. A Federal Reserve rate cut refers to a decision by the Federal Reserve to lower the federal funds rate, which is the interest rate at which banks borrow from each other overnight. This affects the broader economy by making borrowing cheaper, which can encourage spending and investment.

Mortgage interest rates, on the other hand, are the rates at which individuals can borrow money to buy homes. While the Federal Reserve rate indirectly influences mortgage rates (because it affects the cost of borrowing for banks), they are not directly tied to each other. Mortgage rates are also influenced by factors like inflation, market conditions, and investor demand for mortgage-backed securities.

Projections indicate that 2025 could be a great year for real estate moves!

Is this your year to make a change? Give me a call, and we’ll discuss your specific situation. Whether you’re buying or selling, I can provide a personalized property analysis or a “best time to buy” assessment to help you align your home and financial goals.

 Debby Eubank, Realtor, SRES
Nest & Invest Host / Real Estate Maven
Jason Mitchell Group
DRE# 01332306
619-820-9999