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Fed rate cuts: Are they good or bad for home buyers?
Mortgage rates depend on long-term bond yields, inflation outlook, and global demand, so they may not drop despite the Federal Reserve's three 0.25% rate cuts in late 2025.
- In late 2025, the Federal Reserve cut the Federal Funds Rate by 0.25% three times, prompting questions about whether mortgage rates will fall in the U.S. home loan market.
- Because 30-year rates are long-term, mortgage-backed securities prices and investors' inflation and growth expectations set the level rather than Fed committee actions.
- Temporary rate spikes after cuts illustrate how mortgage-backed securities and investor risk premiums can offset Fed action, as financial markets often price in expected Fed cuts before meetings.
- Everyday borrowers face rate outcomes shaped by both markets and personal finances, as homebuyers and refinancing borrowers with larger down payments and higher credit scores often qualify for lower-than-average mortgage rates.
- Absent a severe recession, structural factors make ultra-low mortgage rates unlikely, as tariffs, government borrowing and bond supply, and economic instability keep rates elevated despite gradual declines forecast by economists.
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27 Articles
27 Articles
Coverage Details
Total News Sources27
Leaning Left1Leaning Right0Center25Last UpdatedBias Distribution96% Center
Bias Distribution
- 96% of the sources are Center
96% Center
C 96%
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