For those who’d been monitoring Chicago mortgage rates ahead of last week’s Federal Reserve interest rate cut, the news that followed was less than definitive. The Fed’s decision to lower their overnight lending rate for the first time since the Great Recession commanded first page headlines—but the details that followed provided little clarity.
For those whose interest in Chicago mortgage rates is more than academic (homeowners pondering selling; mortgagees thinking of refinancing or applying for a line of credit, etc.), the question was whether now was the optimal time to take advantage of the bargain-basement interest rate environment…or…?
The equivocation came on two fronts. First were reports on the fallout from Wednesday’s ¼ point drop in the Fed’s benchmark overnight borrowing rate. Wall Streeters didn’t seem to like it—not because it wasn’t good for borrowers of all stripes, but because they’d hoped for an even greater cut. Not just that—there was equivocation on the actual fallout Chicago mortgage seekers might now encounter.
By week’s end, The Washington Post reported, “Mortgage rates pause as markets digest impact of Federal Reserve meeting.” In other words, prospective home buyers expecting a drop in rates would have to wait.
Bankrate.com had a different take—an even more sour one: “Mortgage rates move upward for Friday.” By their lights, Friday’s prospective buyers might expect a slight bump in rates (though they’d still be in the historically low range).
But wait! The New York Times had excellent Friday tidings: “Mortgage Rates Are Already Lower,” they printed. Their take was joined by industry insiders like the Mortgage News Daily’s, who closed out the week with “Mortgage Rates Are Actually Much Lower Today.”
Why was the reporting so scattered? MNW’s Matthew Graham offered the best explanation. The bonds which underlie mortgages had been slow to budge until late Friday—when mortgage rates dropped “to new multi-year lows.” Graham noted that Friday’s improvements “were driven almost entirely by lenders simply catching up with yesterday’s moves.”
With lenders notching rates down, the implications for Chicago home sellers and buyers once again present a spectacularly appealing picture. For specifics on how, what, and where—give me a call!