HEY BUYERS
THIS ONE IS FOR YOU
RATES! RATES! RATES!
Have you heard the news? The Federal Reserve meets next week, and everyone is predicting they will drop rates! Did it just get less costly to buy a house?! Exactly what does a "rate drop" mean for real estate?
Here’s the skinny:
WHAT IS THE FEDERAL RESERVE: The Federal Reserve (aka “The Fed”) is the USA’s central bank. Its governors set interest rates to keep inflation low and the overall economy humming. Their decisions don’t determine your interest rate but they can influence it.
HOW DOES THE FED WORK? At some of their regular meetings, the governors specifically set the federal funds rate (not mortgage rates) which can impact borrowing costs across the entire economy—think car loans, student loans, credit cards, and home loans. When the Fed raises rates to fight inflation, mortgage rates often climb. When they cut rates to stimulate the economy, mortgage rates can ease.
HOW DOES THE FEDERAL FUNDS RATE AFFECT MY MORTGAGE? Mortgage rates are actually more affected by a different rate called the 10-Year Treasury Yield. What is that? It’s the interest rate the government pays when it borrows money for 10 years. When the yield goes up, mortgage rates usually rise too (and vice versa). Sometimes the mortgage rate changes in anticipation of a rate adjustment.
WHY DOES THIS MATTER? Even a small change makes a big difference! For example, on a $400,000 loan, a mortgage rate drop from 6.5% to 6.25% saves about $65 per month—nearly $800 a year.
YOUR MOVE: The Fed’s decisions ripple into mortgage rates. Even small shifts can save you BIG. Want to BUY NOW? Let’s connect now so you’re ready to lock in the best possible rate and monthly payment when the timing is right.
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About Us: The Dream Digs Team, lead by Aryne Blumklotz and Dulcinea Myers-Newcomb includes: Jen Barefield, Operations Manager, and Iris Ireland, Transaction Coordinator. We pride ourselves on our industry expertise, negotiating skills and sucessful sales. We consistently outperform market averages with closed sales regularly exceeding list prices and selling in under seven days. Whether you’re looking to buy or sell, The Dream Digs Team provides a seamless experience from beginning to end - we are your partners!