When the Federal Reserve recently announced its first major interest rate cut in years, many buyers breathed a sigh of relief. After all, lower rates often mean lower borrowing costs… right?

Not so fast. As experts caution, this rate cut may do very little to ease today’s housing affordability issues. Here’s why, and what you can actually do to move forward.

Why Mortgage Rates Aren’t Dropping as Much as You’d Expect

1. Mortgage rates follow the bond market, not just the fed rate.
   Even though the Fed cut its benchmark rate, mortgage lenders don’t always follow immediately. Their decisions hinge more on broader market factors and risk assessments.

2. High home prices still dominate the scale.
   With property prices already elevated, a small rate cut may not change much in terms of actual affordability.

3. Limited supply and cautious lenders.
   Because there are still relatively few homes available, and lenders are managing risk in uncertain times, many are holding off on major rate reductions.

So while the Fed’s cut is newsworthy, it doesn’t necessarily translate into dramatically lower mortgage rates, at least not overnight.

What It Means For Homebuyers Right Now

• First-time buyers may still feel the pinch. Even if rates ease slightly, total home costs are still steep.

• Current homeowners may hold tight. Many with strong low-rate mortgages have little incentive to trade up right now.

• Don’t expect immediate relief. The housing market may take some time to adjust, and it might adjust slowly.

That said, the rate cut could set the stage for gradual improvement. If inflation continues to ease and future cuts follow, mortgage rates might inch downward over time. Analysts predict a comfortable range will likely land between 5–6% rather than returning to pandemic-era lows. 

What You Can Do Instead of Waiting

Even if big rate drops aren’t coming soon, you can still position yourself smartly in the market:

• Shop lenders aggressively. Multiple quotes could reveal a better rate than what’s immediately offered.

• Work on your credit score. A strong credit profile gives you leverage.

• Be flexible in your search. Considering different neighborhoods or styles can broaden your options.

• Explore seller credits or buydowns. These tactics can reduce your immediate costs or monthly payments, even in a higher-rate environment.

Monarch’s Take: Strategy Over Hope

At The Monarch Group, we guide clients through real-world, grounded strategies, never just hope. Yes, interest rates matter. But timing, negotiation, pricing, and smart financial decisions matter more in today’s climate.

If you’re looking to buy, sell, or refinance in the coming months, even in a market where rate cuts seem tempting but slow to translate, let’s talk about your goals. With the right plan, you don’t have to wait for perfect conditions to make a move.

Ready to build your playbook? Visit monarchgroup.homes to schedule a no-pressure strategy call.