What the Fed’s Rate Cut Really Means for Mid-Michigan Real Estate
- sue12851
- Sep 18
- 2 min read
Updated: Sep 20
When the Federal Reserve announced a quarter-point rate cut, headlines lit up — and a lot of people assumed mortgage rates would fall right along with it. But here’s the truth: the Fed does not directly set mortgage interest rates.
So what happened? Let’s break it down in plain English. ⬇️
The Fed’s Role: Short-Term Lending, Not Mortgages
The Fed controls the federal funds rate, which affects short-term lending between banks. That can ripple into credit cards, auto loans, and savings accounts. But it does not automatically lower mortgage rates.
Mortgage rates are tied much more closely to economic news, inflation data, and what’s said in the Fed’s meeting minutes. That’s why after last week’s cut, instead of dropping, mortgage rates actually moved higher.
Why Mortgage Rates Went Up Instead
Even though the Fed lowered short-term rates by 0.25%, markets reacted to the bigger picture:
Ongoing inflation concerns
Economic signals that suggest rates could stay higher for longer
Investor reaction to the Fed’s meeting minutes
In short, mortgage rates don’t just follow the Fed. They move based on how the market interprets the Fed’s actions and the overall economic outlook.
What This Means for Mid-Michigan Buyers and Sellers
If you’re buying:
Don’t assume a Fed cut = lower mortgage payment. Always check with your lender for current rates.
Focus on getting pre-approved so you know exactly what you can afford as rates shift.
If you’re selling:
Buyer demand can change quickly with mortgage rate movement.
Pricing and marketing your home strategically is more important than ever.
👉Related:
What Is Next?
The Fed may have cut short-term rates, but mortgage rates went up instead. What matters most is how markets read the Fed’s signals — not just the headline cut.
If you have questions about how this plays into your plans here in Mid-Michigan, let’s connect. I can walk you through what’s happening and connect you with trusted local lenders who keep a close eye on the market.
Reach out to me here to talk about how this rate cut could affect your plans:
📲 517-243-1721
Comments