Insights of a Realtor, Ralph Perkins

  What the Fed’s Rate Cut Really Means for Buyers and Sellers Yesterday, the Federal Reserve announced a quarter-point rate cut (25 basis points). Headlines like this tend to grab attention, but they also create a lot of misconceptions about what it actually means for the housing market. Let’s clear up the confusion. Fed Rate Cuts vs. Mortgage Rates A common myth is that when the Fed cuts rates, mortgage rates immediately follow. In reality, the Fed’s decisions mainly affect short-term debt, like credit cards, auto loans, and business lending. Mortgage rates, however, move more in response to the bond market and broader economic data. That’s why mortgage rates actually dipped a couple of weeks ago — not because of the Fed, but because economic reports pointed to a slowdown. The market had already priced in the Fed’s move before it happened. What This Means for Buyers Rates may continue to ease as new economic data comes out. But here’s the catch: by the time these shifts make the e...