Fed Cut, Mortgage Rates Up: What Homebuyers, Sellers and Investors Should Do Next
The Federal Reserve delivered a quarter-point cut to its policy rate, but the long end of the bond market pushed back. Ten- and thirty-year Treasury yields, which do the heavy lifting in mortgage pricing, climbed after the decision as traders sold the news, reassessed inflation risks and questioned how quickly the Fed will ease from here. Bottom line: affordability didn’t suddenly improve and deal math remains tight even as the overnight rate moved lower. This divergence matters. Mortgage costs are set in the market for long-term money, not by the Fed’s overnight rate. When investors demand more compensation for inflation and term risk, long yields rise and mortgage rates can drift higher, blunting any relief from a Fed cut. Below is a concise read on why this happened, what it signals for the next leg of the housing cycle, and practical playbooks for buyers, sellers, investors and existing owners.