This week the Fed cut the interest rate which caused mortgage rates to go up. The 30 year mortgage rate jumped 20 points to 6.3% after Jerome Powell spoke. The bond market had already expected the rate to cut, but didn’t like Powell’s comments, which caused rates to rise. The same thing happened after the last cut in September when mortgage rates also jumped.
Experts say the market was too confident that the Fed would make more rate cuts in 2025 and Powell’s comments made investors less sure. Even though lower rates had led to a surge in refinance applications, they haven’t encouraged more people to buy homes. The housing market is still slow as high prices and borrowing costs make it difficult for home buyers.
It’s surprising how rate cuts aren’t lowering mortgage rates. Market reactions and uncertainty seem to be keeping borrowing costs high, making it tough for buyers.
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