Will the Fed's rate cut bring down mortgage rates?

foxbusiness.com:

Barrons Roundtable panelists discuss Americas housing crisis amid a potential rate-cut.

Many Americans have been priced out of purchasing a home or making a move for years now amid elevated mortgage rates, sky-high home prices, and squeezed budgets due to inflation.

Although mortgage rates have started to decline some in recent months, the housing market has been largely stalled as would-be buyers and sellers remain on the sidelines, waiting for a more significant decline.

So will the Federal Reserve's larger-than-expected 50-basis-point rate cut on Wednesday make any difference for mortgage rates?

A sign is posted in front of a home for sale on August 07, 2024 in San Rafael, California. Mortgage rates have come down some in recent months, but many Americans are still priced out of the housing market. (Justin Sullivan/Getty Images / Getty Images)

Last week, mortgage rates fell to their lowest levels in more than 18 months, with the average 30-year fixed rate note dropping to 6.20%. But currently, about 80% of mortgage holders have a rate below 5%, according to a Zillow survey.

FED INTEREST RATE CUTS WON'T HELP YOUR CREDIT CARD DEBT

While a shortage of home inventory is keeping prices high, the Fed's aggressive rate-hiking campaign on the federal funds rate in its fight to tame inflation has made the affordability crisis even worse. 

While the federal funds rate is not what consumers pay directly, it affects borrowing costs for home equity lines of credit, auto loans and credit cards. Mortgage rates are linked to moves in the 10-year Treasury yield.

The Mike Aubrey Group EVP and principal Mike Aubrey explains why housing prices are still high as mortgage rates come down on 'Cavuto: Coast to Coast.'

Derrick Barker, CEO