The Federal Reserve recently lowered the target range for the federal funds rate 25 basis points to 4.5 percent. It was only the second time the Fed cut the benchmark interest rate since March 2020. But while that sounds like it might mean mortgage rates will also fall 25 basis points, that isn’t necessarily the case. In fact, it may not lower rates at all in the short term. Why? For one, the cut was widely expected and, therefore, much of its impact was already absorbed – much the same way declining mortgage rates in August were mostly due to anticipation that the Fed would cut rates in September. After that cut, however, rates starting drifting back upward. In other words, when the Fed cuts rates, it’s good news for home buyers and borrowers in the long run but doesn’t mean you’ll see a dramatic drop in mortgage rates or any immediate impact at all. (source)
