Everyone is waiting for mortgage rates to fall; some might have even marked their calendars for the anxiously awaited, possible interest rate cut in September. For borrowers, it would be much-needed relief after the Federal Reserve’s two-year battle with scorching inflation. But an interest rate cut might not translate into immediately lower mortgage rates, according to one industry watcher.
“The bond market is already pricing in rate cuts, so the simple act of the Fed cutting is not necessarily going to have a direct impact on mortgage rates,” Alan Ratner, managing director for housing research firm Zelman & Associates, said in an interview with CNBC yesterday. “Right now, the bond market is already pricing in that outlook, so we’ll see how far rates actually move lower, but our view is it’s going to be a fairly gradual decline over the next several years, as opposed to a step function lower.”
