The Federal Reserve cut short-term interest rates last week by
0.25%, to approximately 2.00%. As regular readers of our newsletter have
learned, short-term rates (in this case the federal funds rate) do not
necessarily affect longer term rates such as mortgages. This holds true of the
past week; mortgage rates, which have risen slightly in the past couple of
weeks, looked at the Fed’s move and just shrugged. Not much movement at all.
Factors having a greater effect on mortgage rates include trade
tensions, slowing global growth and, currently, some recent positive housing
data. This week’s recommendation is simple; it’s not wise to extrapolate from
the Fed to the mortgage market. The better strategy is to check with Margie to see where rates stand. She will be happy to
run the numbers for you.
Steven H Hofberg, Operations Manager