The refinance share is forecasted to rise as rates fall, but the overall market remains sensitive to Treasury yields and further Fed policy decisions.
Fed policy and bond market drive rate outlook
The late-summer slide in rates followed a drop in long-term US Treasury yields and growing expectations of Federal Reserve rate cuts. The Fed delivered a quarter-point cut last week and left the door slightly open to more reductions by year-end, citing concerns about the US job market. However, industry experts warned that further declines in mortgage rates are not guaranteed.
“I keep telling people the Fed cutting rates doesn’t mean that mortgage rates will go down. Mortgage rates move on economic data, and the bond market is now saying, ‘Ho hum, basically…’ The door is not wide open for many more cuts. Certainly not a bigger cut than a quarter-point cut,” Melissa Cohn, regional vice president of William Raveis Mortgage, told Mortgage Professional America.
Meanwhile, Michele Lawrie, a veteran in real estate, said 6% is a crucial benchmark for mortgage rates, often emphasized by agents and industry leaders.
The National Association of Realtors estimated that lowering rates to 6% could make homeownership possible for 5.5 million more US households.
