Will a New Fed Chair Bring Lower Mortgage Rates? Here's What an Expert Told Me
Updated: 14 hours ago
With Kevin Warsh in line to lead the Federal Reserve, one question keeps landing in my inbox: "Does this mean mortgage rates are about to drop?"
I wanted a straight answer, so I asked Logan Mohtashami, lead analyst at HousingWire, who follows housing and rate data every single day. Here's what he told me, in plain English.
The short answer: there's no guarantee
A new Fed chair does not guarantee lower mortgage rates. And when you look back at history, it doesn't show that kind of trend either.
Why it isn't that simple
The Fed's policy isn't "neutral" right now. Neutral means the Fed isn't trying to speed up or slow down the economy. Today it's still pressing on the brakes, and where it goes next depends on the economy, not on one person in charge.
Big rate drops usually come with a recession. Historically, rates have fallen sharply when the economy weakens and people lose jobs. That's not something most families want to wait for.
It would take more than the United States. Logan pointed out that we would likely need central banks around the world to move together, not just our Federal Reserve.
The Fed doesn't set mortgage rates
The Federal Reserve sets a short-term rate that banks use to lend to each other. Mortgage rates follow the bond market, which reacts to inflation, the economy, and what investors expect next. That's why mortgage rates can move in the opposite direction of a Fed decision.
When people say "rates will go lower"
You'll hear it from headlines, friends, and even some people in the industry. But as Logan put it, that's not how it works, and it's not how it has ever worked. Nobody can promise where rates are headed.
What to do instead of waiting
Plan around a payment you're comfortable with today. If it works now, anything better later is a bonus.
Ask the seller to help. Sellers can often pay part of your closing costs or pay to lower your interest rate. I help structure your offer so you ask for the right things.
Keep an eye on refinancing. If rates do come down later, refinancing may lower your payment. I keep a refinance watch list for my clients so you don't have to track rates yourself.
Get a plan, not a prediction. The right strategy depends on your budget, your timeline, and your goals.
Want to see what buying could look like for you right now in Utah or Idaho? Schedule a free strategy call and we'll walk through your numbers together.
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