Does that mean mortgage rates are almost zero as well? Should you lock in a rate today?
HousingWire reported on Sunday that the Federal Reserve made its second emergency cut in two weeks, slashing 1% off its benchmark rate. The Fed also renewed a program to buy Treasuries and mortgage bonds in an effort to bolster the economy as the coronavirus that causes COVID-19 spreads in the U.S.
Many consumers assume mortgage rates mirror the Fed rate. In an extensive article posted soon after Sunday’s cut, Mortgage News Daily’s Chief Operating Officer Matthew Graham explained why this is NOT the case. We encourage you to read the entire article for the complete details, but here are the primary takeaways:
- The Fed did not just cut mortgage rates.
- Mortgage rates often move in the opposite direction as a Fed rate cut/hike and did exactly that at the end of last week.
- You may be able to get a lower rate at some point in the coming weeks, thanks to the Fed’s reinvigorated mortgage bond buying efforts.
- Make sure your originator has what they need from you in order to lock when and if your desired rate becomes available.
Speaking to that last point, the best approach for now is to make a game plan. Get in touch with your CrossCountry Mortgage loan officer today so you’re ready to seize the moment and get the lowest rate possible on a new home purchase or refinance. Just know that rate is NOT near zero right now, even though the Fed’s rate is.