Fed Rate Cut Fails to Lower Mortgage Refinance Rates
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BTCCSquare news:
The Federal Reserve's recent quarter-point rate cut has paradoxically driven mortgage refinance rates higher, with the average 30-year refinance rate climbing from 6.61% to 6.82% within days. This counterintuitive movement stems from mortgage rates tracking the 10-year Treasury yield rather than the Fed's short-term benchmark.
Homeowners with rates above 7% may still find refinancing advantageous for substantial monthly savings, though the calculus changes for those with smaller rate gaps, near-term moving plans, or loans approaching maturity. Market dynamics now suggest a decoupling between monetary policy and long-term borrowing costs.
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