The Fed Just Cut Interest Rates Again. Should You Sign a Mortgage ASAP?

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

[[{“value”:”Image source: Getty Images
There’s a reason the Federal Reserve lowered its benchmark interest rate first in mid-September, and then again in early November. The rate of inflation has been slowing, so the Fed doesn’t need to keep its federal funds rate as elevated.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Raising the federal funds rate makes borrowing money more expensive across the board. During periods of high inflation, the Fed wants to tamp down spending to let the supply of goods and services catch up with demand and bring prices down.But now that inflation has cooled, the Fed can lower its benchmark interest rate. That should lead to more affordable borrowing options across a range of products, from auto loans to personal loans.Given the Fed’s recent rate cut, you may be inclined to rush out and sign a mortgage — especially if you’re tired of spending money on rent month after month. But you should know that waiting might be a much better bet.We’re not seeing much lower mortgage rates yetThe Fed isn’t done cutting interest rates. And in time, we could see a notable drop in mortgage rates as the Fed continues on that path.But we definitely aren’t there yet.As of this writing, the average 30-year mortgage rate is 6.79%. That’s hardly a bargain. On a $200,000 mortgage with a 30-year payoff, a rate of 6.79% means paying $1,303 per month for principal and interest.Waiting for rates to reach the point where you’re paying 5.79% would leave you paying $1,173 per month for the exact same loan. That’s a huge difference. And while there’s no guarantee that mortgage rates will drop by a full percentage point soon, there’s a good chance they’ll get there by this time next year, if not sooner.Take advantage of your waiting periodYou may be eager to become a homeowner if you’ve been wanting to buy a place of your own for quite some time now. But unfortunately, now’s not the time to rush into a mortgage given that rates aren’t so great.The good news, though, is that waiting to sign a mortgage has its benefits. For one thing, you can work on boosting your credit score to qualify for an even better offer once rates start to decline. You can also take the opportunity to save more toward your down payment, or toward home renovations (which may be necessary even if you buy a home in good condition).Plus, you can spend a little time reading up on different mortgage lenders to narrow down your choices for when the time comes to apply. You can start by checking out this list of the best mortgage lenders.Remember, the Fed only made its most recent interest rate cut a couple of weeks ago. There’s still time for mortgage rates to react to that. So don’t be discouraged by the fact that rates haven’t plunged this month. Instead, sit tight, save more, and put yourself in the best position possible to pounce on lower mortgage rates once they become available.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

There’s a reason the Federal Reserve lowered its benchmark interest rate first in mid-September, and then again in early November. The rate of inflation has been slowing, so the Fed doesn’t need to keep its federal funds rate as elevated.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Raising the federal funds rate makes borrowing money more expensive across the board. During periods of high inflation, the Fed wants to tamp down spending to let the supply of goods and services catch up with demand and bring prices down.

But now that inflation has cooled, the Fed can lower its benchmark interest rate. That should lead to more affordable borrowing options across a range of products, from auto loans to personal loans.

Given the Fed’s recent rate cut, you may be inclined to rush out and sign a mortgage — especially if you’re tired of spending money on rent month after month. But you should know that waiting might be a much better bet.

We’re not seeing much lower mortgage rates yet

The Fed isn’t done cutting interest rates. And in time, we could see a notable drop in mortgage rates as the Fed continues on that path.

But we definitely aren’t there yet.

As of this writing, the average 30-year mortgage rate is 6.79%. That’s hardly a bargain. On a $200,000 mortgage with a 30-year payoff, a rate of 6.79% means paying $1,303 per month for principal and interest.

Waiting for rates to reach the point where you’re paying 5.79% would leave you paying $1,173 per month for the exact same loan. That’s a huge difference. And while there’s no guarantee that mortgage rates will drop by a full percentage point soon, there’s a good chance they’ll get there by this time next year, if not sooner.

Take advantage of your waiting period

You may be eager to become a homeowner if you’ve been wanting to buy a place of your own for quite some time now. But unfortunately, now’s not the time to rush into a mortgage given that rates aren’t so great.

The good news, though, is that waiting to sign a mortgage has its benefits. For one thing, you can work on boosting your credit score to qualify for an even better offer once rates start to decline. You can also take the opportunity to save more toward your down payment, or toward home renovations (which may be necessary even if you buy a home in good condition).

Plus, you can spend a little time reading up on different mortgage lenders to narrow down your choices for when the time comes to apply. You can start by checking out this list of the best mortgage lenders.

Remember, the Fed only made its most recent interest rate cut a couple of weeks ago. There’s still time for mortgage rates to react to that. So don’t be discouraged by the fact that rates haven’t plunged this month. Instead, sit tight, save more, and put yourself in the best position possible to pounce on lower mortgage rates once they become available.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More