The Fed finally did it and cut the key interest rate a full half a point on September 18th, the first since we have come out of Covid. But, don't call your lender about a refi just yet. This rate cut was much anticipated so was already baked into rates. Mortgage rates are tied primarily to the bond market which is impacted by rate cuts but it can take some time for all of this to settle in. Lenders also take into account general market conditions such as inflation and job reports so it could take up to 6 weeks to start seeing a change at the retail level. And, the market has been somewhat slow with buyers out looking but ever so cautious and waiting, waiting, waiting for the right situation unless you have the perfect, squeaky clean, in the flats, walk to everything stunner home that captivates everyone and draws in multiple offers!
Same Loan Less Groan. Over the past two months, the average thirty year mortgage rate fell .51% which has improved affordability. Each .10% increase or decrease to rates roughly equals a 1% increase or decrease in your mortgage payment so that half point drop already means that your monthly payment on homes are 5-6% cheaper than they were over the summer.
One counter intuitive train of thought is that median prices may head upward with more inventory as Sellers now decide to sell when they can get lower rates for their own purchases and more homes for sale combined with lower rates can draw out more buyers and activate the market.