FRESNO, Calif. (KFSN) — The Federal Reserve recently cut interest rates for the third time within a year, but home buyers won’t see a trickle-down effect on mortgage interest rates.<\/p>\n
“Well, it’s possible that the Fed’s latest move is going to have no impact on mortgage rates, says Bankrate Housing Analyst Jeff Ostrowski. “We’re in sort of this middle ground in terms of the Fed policy and how the federal funds rate affects mortgage rates.”<\/p>\n
Ostrowski explained why the Fed’s move doesn’t translate into a direct quarter-point drop in mortgage interest rates.<\/p>\n
“So the mortgage market really does its own thing,” he said. “I mean, certainly, it’s influenced by the Federal Reserve, but it’s not directed by the Federal Reserve. The fixed-rate mortgages in the US are benchmarked not off the federal funds rate, but off 10-year treasury yields.”<\/p>\n
Ostrowski is hopeful the new year will bring enough changes in the market to get more people into houses.<\/p>\n
“Well, for buyers, there are some glimmers of hope,” he said. “Prices are finally starting to soften and maybe even to come down in some markets. There’s the possibility of prices coming down, or at least not continuing to go up at that double-digit rate that they were for several years.”<\/p>\n
Ostrowski says 2026 will be a little tougher on sellers, with home prices staying steady and housing inventory expected to increase.<\/p>\n
That would create a little more competition in the market and put buyers in a better position to negotiate their bids.<\/p>\n
For news updates, follow Dale Yurong on Facebook<\/a> and Twitter<\/a>.<\/p>\n Copyright \u00a9 2025 KFSN-TV. All Rights Reserved.<\/p>\n