The Federal Reserve cut its benchmark interest rate on Tuesday — but don’t expect lower mortgage rates as a result.
The lowered federal funds rate of 1/2 percent to a range of 1% to 1.25% may not affect mortgage rates. The central bank noted that the move was in response to the “evolving risks” the COVID-19 coronavirus outbreak poses to the economy.
The Fed is catching up, but mortgages respond to market forces and not to the Fed. The Fed is actually following and not leading when it comes to mortgage rates.
It is still a great time to consider purchasing that home you’ve been wanting to buy. Mortgage rates are at an all-time low since 2016. The average rate is 3.45% and with rates that low, people are seizing the opportunity to refinance and or to sell their current home, collect the equity and purchase a new home with more money in their pockets.
So if you’re looking to buy or sell, contact me for some real estate advice and I’d be happy to help.