Mortgage rates rise nationwide after federal funds rate drop

TUCSON, Ariz. (KGUN) — Adrian Ramirez is searching for his first home.

Bạn đang xem: Mortgage rates rise nationwide after federal funds rate drop

“I want to grow my own roots,” he said. “I also do see the value long-term in home ownership.”

Despite a quarter-point drop in the federal funds rate, mortgage rates are now on the rise. And while mortgage rates aren’t directly tied to the federal interest rates, they have a heavy influence.

Dean Greenberg, President of Greenberg Financial Groupexplained that interest rates on mortgages actually went up after the Federal Reserve’s decision to drop federal interest rates.

Xem thêm : Lawmakers preview housing bills as many Oregonians face unaffordable rent or mortgage payments • Oregon Capital Chronicle

“Interest rates on mortgages went up because the treasury market, which is what mortgages are based on,” he said. “The ten year [yield] went up because they’re anticipating that they’re not going to be able to cut interest rates anymore, and that the markets said ‘no that’s not right, eventually you might have to raise some rates.'”

The Federal Reserve also said they only plan on dropping the federal funds rate twice in 2025.

However, Tucson Real Estate Agent Bridgett Baldwin of The Tucson Agents explains that mortgage rates aren’t the only thing affecting our local housing market. She’s worked in Tucson for 15 years.

“There’s so many factors that go into why someone buys or sells their house,” she said. “There’s a section of the market of people that are holding on because they don’t see anything else they want to buy, and they are sitting on a 2.5 interest rate from 2017. They’d have to give up that rate and enter the market at the current rate, which is between 6.5 and 7.”

Ramirez is looking in Midtown Tucson, an area Baldwin says currently favors the sellers: “If something good comes on the market at a good price, there’s a ton of buyers that have just been waiting to snatch it up.”

Xem thêm : New York proposes new regulation to boost fair lending by nonbank mortgage lenders

To some buyers, like Ramirez, location is more important than the loan he already knows he will be taking out, so he says he’s willing to adapt for his dream home.

“I’m sticking to the plan and working towards buying a house,” Ramirez said. “Instead of spending more on that fancy dinner, I could save that for my down payment.”

Greenberg advises that if you need a new home for yourself or your family to live in, follow your needs: you can never be completely sure if it’s the best time to buy or not. He doesn’t, however, advise buying investment properties until there’s a larger supply available.