You don’t need to be a real estate expert to know that the Federal Reserve made waves on September 18th by lowering interest rates for the first time in over two decades. In a widely anticipated move, the Fed cut rates by 50 basis points, surprising many who expected only a 25-point reduction.
But here’s the puzzle: Why have mortgage rates continued to rise since then?
To fully understand why, we’d need to dive into the intricacies of how banks determine mortgage rates, which is a topic best suited for a finance professional. However, one key factor is that the federal funds rate is not the sole driver. The broader economic landscape plays a crucial role. For instance, a stronger-than-expected job report—like the one we recently saw—signals economic resilience, which can, paradoxically, keep rates higher. In short, lenders adjust based on more than just the Fed's moves.
The silver lining? This is still a step in the right direction, and we’re likely to see mortgage rates trend downward over time.
For prospective homebuyers, this rate adjustment opens up another window of opportunity before home prices potentially rise again.
The longstanding belief in real estate is that the best time to buy is before rates drop further. As the saying goes, “Marry the house, date the rate.” In other words, lock in your home now, and you can always refinance your mortgage when rates eventually decline. The price you pay for your home, however, is forever.
If you’re considering entering the market, now might be the perfect time to explore some innovative financing options. Here are a few standout offers from trusted lenders:
Citizens Bank: Through the end of the month, Citizens is offering a $10,000 closing credit to select first-time homebuyers. This credit can be used to reduce your mortgage rate—or fund a fabulous housewarming party. The choice is yours!
US Bank: For borrowers with lower income but substantial liquidity, US Bank offers a program that offsets lower income with your assets, providing greater flexibility for those with significant savings or investments. It’s one of the more aggressive asset monetization programs available.
Wells Fargo: Many banks will lower your mortgage rate if you keep your assets with them. Wells Fargo, for instance, offers relationship banking discounts starting at $250K, which reduces your rate by 0.125%. For those with $25M or more, that discount can go as high as 1.125%.
Navigating the housing market during turbulent times can be tricky, but you don’t have to go it alone. If you have questions about buying, selling, or just want to chat about the current state of the market, we’re here to help. Feel free to reach out via phone or email—or follow @caseysoloff and @shirleyhackel on Instagram for timely updates and insights.