Federal Reserve cuts in the federal funds rate have an unpredictable impact on long-term mortgage rates. Rates may fall after this week’s rate cut. Or, they may rise, as they did following the Fed’s two January cuts.

How soon could it affect you?
Nobody knows

Nobody really knows how soon the Fed’s rate cut will impact mortgage rates, or which direction rates will likely go.

For this reason, consumers are urged not to wait for the market to bottom before looking for a mortgage.


I am absolutely a believer that taking action now makes sense.

“I am absolutely a believer that taking action now makes sense,” says Bob Walters, chief economist at Quicken Loans.

Although rates have been trending higher in recent weeks, they remain low by historical standards. So if you’re looking for a mortgage, the time to act is now.

It’s a bit easier to determine when the Fed rate cut will affect borrowing costs on adjustable-rate mortgages: You are likely to see a benefit the next time your mortgage resets.

Conclusion
It’s impossible to know when — or even if — fixed-rate mortgages will fall given the Fed’s most recent trim to the federal funds rate. However, most homeowners with adjustable-rate mortgages can anticipate lower payments the next time their mortgage rate resets.