Rates on 30yr fixed mortgages have dropped due to the FED cut.
This occured last time the fed rates were cut but then the mortgage rates had a dramatic increase in the following days.
Mortgage rates are determined by the 10yr bond notes...
If the stock market is doing well then nobody will invest into bonds.
If the stock market is doing bad then everyone will start investing into bonds. The bond rates start to drop, and help the mortgage rates to go down as well.
When the stock market is doing well then the mortgage rates are going to continue to go higher.
Example:
09/11 Market crashed....Mortgage rates dropped to 4.25% for 30yr fixed....and Greenspan lowered Fed funds rate....so that the 2nd mortgage rates will drop as well (student loans, auto loans, credit cards also dropped).
What's the point of lowering the FED Rates? To 'stimulate' the market with 'consumer spending'.
If the FED lowers the rate it is BAD for borrowers looking to lock in a rate within the next days/weeks.
Remember...it is to stimulate market growth..and if the market is doing well then the mortgage rates are going to go up!
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