Following Latest Federal Reserve Rate Cut, Mortgage Rates Increase by 20 Basis Points
LAS VEGAS, NV – As a result of the Federal Reserve’s latest benchmark interest rate cut made late last week, rates on home mortgages – instead of lowering as one would expect – actually increased, which is news that many prospective home buyers certainly did not want to hear.
Last Tuesday, the average rate on the 30-year fixed-rate mortgage was 6.13 percent, one of the lowest levels it has been in a year. However, when Fed Chairman Jerome Powell announced at a news conference last Wednesday the agency’s latest interest cut, that mortgage rate actually began to climb instead of fall.
The reason? Negative reaction on the part of the bond market – which had already priced in a cut – to Powell noting at the press conference that another rate cut in December is not guaranteed to happen, according to a client note sent by Mortgage News Daily Chief Operating Officer Matthew Graham.
The market’s enthusiasm for 3 Fed rate cuts in 2025 had grown a bit too large for the Fed’s liking,” he said in the note. “The market was nearly 100 percent certain of another cut in December. The Fed was not as certain, and Powell made it a point to say so yesterday. The result is a mild re-set in yields back to levels that are more consistent with a December cut being a solid possibility, but not a full lock.”
As a result of Powell’s noncommittal attitude to a December cut, directly after the press conference the then-current 6.13 percent rate jumped up 14 basis points, and by Thursday it has risen an additional six, leveling off at 6.33 percent; all in all, it swelled up a total of 20 basis points.
The last time the Fed announced a rate cut – which occurred in September – 30-year fixed mortgage rates jumped even higher, that time to 6.37 percent.
Shelter Realty Property Management specializes in the areas of Henderson, Las Vegas and North Las Vegas, NV. Feel free to give us a call at 702.376.7379 so we can answer any questions you may have.
Christopher Boyle is an expert investigative journalist for SEARCHEN NETWORKS® and reports for independent news and media organizations in the United States. Christopher keeps a keen-eye on what’s happening in the Vegas real estate market on behalf of Shelter Realty Property Management