While the Federal Reserve cut its interest rate this week, mortgage rates moved higher, leaving many potential homebuyers surprised. According to the Mortgage News Daily, the average rate on a 30 year fixed mortgage increased 20 basis points after Jerome Powell's announcement and press conference. This is not the first time this happened however. Earlier in the week, the average rate dipped before spiking back up after comments made by the Fed. This was also seen the last time the Fed lowered rates in September, which caused a mortgage rate increase.
The recent dip in rates sparked an increase in refinancing activity, with applications up 111%. The jump in rates hasn't done much to entice new homebuyers, who still remain cautious amidst the high prices and limited inventory. While the Fed's actions are aimed at supporting the economy, for now buying homes just got more expensive for individuals.
1 comment:
It’s surprising how mortgage rates can rise even after the Fed cuts interest rates, which seems counterintuitive for potential homebuyers. I wonder if this back and forth will make people hesitant to buy or refinance, or if the market will adjust once rates stabilize.
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