December Fed Rate Cut Speculation Resurfaces, but Mortgage Rates May Not Follow
Markets now price in an 85% chance of a December Fed rate cut, a dramatic reversal from last week's uncertainty. The shift follows dovish comments from a key policymaker amid conflicting economic signals—stubborn inflation versus emerging labor market softness.
Mortgage rates hover NEAR 13-month lows, but their path post-cut remains unpredictable. Historical patterns show housing finance costs don't always move in lockstep with Fed actions. The 30-year fixed rate could rise or fall depending on bond market reactions to the Fed's inflation-fighting credibility.
Homebuyers face a paradox: waiting for lower rates risks price appreciation, while rushing risks overpaying if financing costs decline later. Refinancing remains the safety valve—a record $2.8 trillion in mortgages originated during 2020-2021's rock-bottom rates demonstrate American homeowners' willingness to chase savings.
