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Originally Posted by WeStayClean
Curious about your take on the recent fed cut.
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Feds don't control mortgage rates. When they "cut" it is to the Federal Funds rate.
When they cut the Federal Funds rate do mortgage rates sometimes go down? Yes, but sometimes they go up as well depending on the language from the meetings and how markets interpret their statements and minutes from the meetings.
Mortgages ended essentially flat after the cut this week, no increase, no decrease as the .25 cut has been "baked in" to the market and widely expected for some time now. Jerome Powell chose his words carefully to give the markets just enough so that they wouldn't react much and that is what happened.
All eyes now are on the China trade deal which, in my opinion, is the biggest driver of mortgage rates at the moment.
Trade deals came back on the table at the beginning of the month and rates spiked up dramatically.
Today, China cancels a visit to some farms (which was never approved in the first place and only "tentative") markets freak out and mortgage rates improve a bit.
The key word these days is "volatility" with lots of knee jerk reactions causing mortgage rates to go up or down.
What I am helping people do now is, figuring out the target rate for a refi to pencil out, then getting all their ducks in a row for loan approval. That way, when the next dip happens we're ready to take advantage of it while it lasts and get the refi done quickly and easily
For people buying a home, I don't recommend gambling to see if rates will come down further. Right now rates are great and still under 4% There's too much risk in my opinion to play the market when you are in escrow on a home to see if rates will come down during the home buying process. Lock in a great rate right now and then keep your eyes on the prize which is buying your new home. After closing then we can start monitoring the market for a refi opportunity down the road.