Fed Rates DOWN - Mortgage Rates UP??

Fed Rates DOWN - Mortgage Rates UP??

The day after the Fed trimmed short-term rates by 25 basis points, mortgage rates did the opposite of what many expected. The 30-year fixed rate, which had been on a steady decline since hitting 7.08% in May and dropping to 6.13% on Tuesday, suddenly reversed course climbing back up to 6.37% yesterday, reported by Mortgage News Daily. Even with the bump, rates are still hovering near their lowest levels of the year. According to the Mortgage Bankers Association:

• Mortgage rates have held steady or fallen for 10 weeks.

• Mortgage applications increased 6 of the last 7 weeks.

• Mortgage applications jumped 29.7% last week compared to the week prior.

• …

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What the Mortgage Rate Drop Means for Homebuyers in Westchester County

What the Mortgage Rate Drop Means for Homebuyers in Westchester County

If the Fed cuts rates in September, it doesn’t guarantee mortgage rates will move lower. This is a conversation I’ve had with many of my clients. With a strong economy and low unemployment, mortgage rates may stay put. Yes, a Fed rate cut usually puts some downward pressure on borrowing costs, but it’s not guaranteed. Mortgage rates move more closely with bond yields, which are heavily influenced by inflation expectations and overall economic strength. If investors still see inflation risk or the labor market looks too strong, those yields (and mortgage rates) won’t budge much, even if the Fed is cutting.

We saw this last fall, and it could happen again.…

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Tariffs, Rates, and What It Means for Spring Buyers

Tariffs, Rates, and What It Means for Spring Buyers

President Donald Trump's recent "Liberation Day" tariffs are expected to impact the U.S. housing market by increasing construction costs and influencing mortgage rates. Following the announcement, mortgage rates fell sharply, with the average 30-year fixed rate dropping 12 basis points to 6.63%—the lowest since October. This decline reflects a market shift as investors moved from equities into U.S. Treasury bonds, which typically guide mortgage rates. At the same time, the tariffs are projected to raise new housing costs, with the National Association of Home Builders (NAHB) estimating a $9,200 increase per new single-family home due to higher prices on imported materials like lumber,…

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Could This “Magic Rate” Unlock the Market?

Could This “Magic Rate” Unlock the Market?

According to a recent analysis by John Burns Research and Consulting (JBREC), there may be a "magic" mortgage rate that could spark renewed activity in the housing market. For 12 consecutive years, mortgage rates remained below 5%, enabling many homeowners to lock in favorable terms. Currently, 86% of mortgage holders have rates under 6%. JBREC's survey suggests that the 5.5% mortgage rate represents the tipping point that could release the “ lock in effect ”. Additional findings:

• 72% of buyers would not accept a rate above 5.5%

• 22% of buyers would accept a rate higher than 6%

• 66% of consumers believe a “normal” rate is below 5.5%

• 88% of consumers believe…

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86% of Mortgages Have a Rate Below 6%

86% of Mortgages Have a Rate Below 6%

According to a report by the FHFA National Mortgage Database Aggregate Statistics, 85.6% of mortgaged homes have a rate below 6%, down from the peak of 92.8% in the 2nd quarter or 2022.

Key Points:

• Strong Borrowers: The average credit score among borrowers with an active loan is an impressive 743.

• Low Foreclosure Risk: Only 0.3% of borrowers have negative equity.

• Improved Loan-to-Value Ratios: National LTV ratio improved to 48.3% from 70% a decade ago.

• Outstanding Mortgages: At the end of Q1 2024, there were 50.8 million outstanding mortgages with unpaid balances totaling $11.7 trillion.

Ralph’s Take

Despite concerns that…

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