At this point we all have passed the "Federal Reserve cut short-term rates" must expected relief but what it really meant to the market. Further more what was the effect to the actual homeowner or the individual trying to reach for his dream.
To look at the matter we have to go back to what history has pointed to us previously, when the Federal Reserve reduced its target 13 times, for the federal fund rates. The average 30-year mortgage rate in the month that was cut, experienced a roller coaster effect. It proved that a Fed rate cut wasn't a signal to a drop in fixed mortgage rates.
Now we are seeing the real effect as customers are calling expecting to take advantage of the "new" low rates. To find them selves disappointed and incredulous of the reality and perhaps the more strict guides we are facing.
Understand perhaps, that the actual indicator who affects how the mortgage rates are affected is likely to be investor's expectations. So, if the shadow of inflation shows any signs of acceleration, mortgage rates will go up. This is a understandable outcome.
As we experienced, the mortgage rates do not react to Fed rates moves but anticipates to them. Experts expect the long term mortgage rates to remain stable, unless the economy stumble or take us in a different direction.
Lets be responsible for our acts and the information we choose to convey to the public so we have a more educated and informed customers.
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