The Fed Trims Rates Slightly And US Mortgages Fall A Smidge
Chart of the Week - Weekly US Mortgage Interest Rates, from 2024 to Now
In mid-September, the Fed trimmed its benchmark rate from 4.375% to 4.125%, the first cut in nine months.
When the Fed cuts the fund rate, their goal is to make borrowing money a little cheaper. This gives some people a little more money in their pocket to spend because Fed rate cuts tend to lower mortgage interest rates and lower mortgage payments. Rate cuts also make it cheaper for business to borrow money so they can grow and (hopefully) create more jobs.
The move was small - just a quarter of a percent - but it was enough to nudge mortgage rates lower in September. The average 30-year fixed is now 6.3%, down from around 6.6% in late August.
A 0.3% drop might not sound like much, but on a $500,000 mortgage, it can mean roughly $150 less a month. For buyers and refinancers, that’s a little breathing room.
And there are rumors of 1 or 2 more rate cuts coming in 2025. Let’s keep our fingers crossed.