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Will Fed Rate Cut Lower Mortgages?

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Will Fed Rate Cut Lower Mortgages?
A house 'For Sale' sign in Arlington, Va., on July 13, 2023. Saul Loeb/AFP via Getty Images
Anne Johnson
Updated:
The Federal Reserve announced a rate cut at its policy meeting on Sept. 18. The federal funds rate was cut by 50 basis points, to a range of 4.75–5.0 percent. This was seen as a positive step for those hoping to buy a house.
However, the lower federal rate may not influence the current home mortgage rate that much. Several factors go into a mortgage rate, with only one being the federal rate.

Federal Reserve Sets Federal Funds Rate

The Federal Reserve is the central bank in the United States. It manages the supply of money and the cost of credit. Its stated goal is a prosperous economy via its dual mandate of price stability and maximum employment.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for 10 years.