Fed Makes Emergency Rate Cut to Combat Coronavirus Fallout

Mortgage rates have plummeted since the beginning of the year to the lowest average since 2016 as a result of market movements in response to the coronavirus.

Yesterday, the Federal Reserve followed suit and slashed interest rates in an emergency move to cushion the U.S. economy from the coronavirus outbreak, and Wall Street is already betting it will lower them even further.

While the Federal Reserve adjusts short-term interest rates, mortgage rates fluctuate based on long-term bond rates.

Here’s what the Fed’s surprise interest rate cut means for mortgage rates:

Borrowers are the direct beneficiaries. When the Fed cuts rates, it makes loans for autos and credit cards cheaper.

At the same time, the 10-year Treasury yield has been trading at its lowest ever, pushing down mortgage rates to near record lows, even though they’re not typically linked to Fed moves.

Current low rates have already caused a boom in refinancing activity. And demand among home-buyers remains elevated, in spite of the short supply of homes for sale.

Those in the refinance market Need to decide whether to lock now or wait and watch to see if rates drop further.
For those looking to purchase, making the move now to take advantage of low rates could pay dividends for decades to come. Essentially, establishing a comparatively low cost of housing for as long as you keep your loan.

Contact us today, we can provide you with tools you need to take advantage of today's market and the incredible financing opportunities it brings.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.