11/05/2025
When the Fed lowers the Federal Funds Rate, they’re just adjusting the short term interest rate banks charge each other for overnight loans. That’s like changing the cost of a super short term “IOU” between banks.
30-year mortgage rates, on the other hand, are long term loans that are mostly influenced by what’s happening in the bond market. Especially the yield on the 10-year Treasury note. Investors set those yields based on what they think will happen with inflation, the economy, and risk over many years, not just overnight.
So while Fed rate cuts can indirectly influence mortgage rates (because they can affect economic outlook and inflation expectations), they don’t push a magic button that instantly drops 30-year rates. Sometimes mortgage rates even go up right after a Fed cut if investors think inflation will rise.
We are seeing that right now where they have gone up slightly today. They are still lower than they have been for the last 11 months though and I do think they will continue to decrease over the next few months though!
The other thing to remeber is that not everyone realizes there is a difference between the fed fund rate and mortgage rates (unfortunatly)
What this means is when the media starts talking about the lowering of “rates” alot of buyers will start thinking now is a good time to buy.
I've already had 3 people text me today about starting up the buy/sell process.
