Now that the Fed has cut interest rates, what

After months of anticipation, the Federal Reserve today cut its benchmark interest rate—a further 25 basis points, its second rate cut since 2025. This move, following a similar quarter-point cut in September, reflects the Federal Reserve's growing confidence that the economy could gradually experience a return to lower borrowing costs.

For those hoping that these Federal Reserve rate cuts would significantly reduce mortgage rates, the question remains: have the recent rate cuts actually helped homebuyers? Ultimately, the relationship between Federal Reserve rate cuts and mortgage rates is not as straightforward as many believe. While Federal Reserve rate cuts can impact borrowing costs, mortgage rates are primarily driven by broader market forces that don't always align with Federal Reserve policy actions.

In fact, over the past year, the relationship between Federal Reserve moves and the direction of mortgage rates hasn't been predictable at all. And while today's rate cut may provide some relief in the coming months, past moves suggest that borrowers should temper their expectations about how much and how quickly mortgage rates may actually fall.