In late September, the long-anticipated federal funds rate cut arrived, and we saw rates hit the year’s lows. Fast forward a few weeks and we are now sitting about where we were before the rate cut — what gives? Why are mortgage rates moving up and not down? Will this slow down demand? We believe it won’t, and rates settling into this mid-6% range could stimulate demand in the short-term. So let’s talk about each of these items and then get some talking points you can implement when working with your buyers and sellers.

First, let’s tackle why rates are being stubborn. While the fed funds rate cut (remember that overnight lending rate) signaled that market conditions were softening and therefore it’s okay to stimulate growth, the reality is that many of the components of the market are still strong. Retail sales were up, the job market is incredibly resilient and showed strong increases in September — all things that would lead to the Federal Reserve taking a more cautious approach toward lowering borrowing costs. The positive data point is that inflation continues to stay flat to slightly lower which is conducive to further rate cuts.

Next, let’s get into why won’t this temper buyer demand. As you know, buyer demand has been incredibly strong for well over two years now, even in a rising rate environment. Rates are down from their highs in the 8% range, so comparatively, home affordability has increased. And while real estate is hyper-local, the steady drip of new inventory month over month has helped keep prices from escalating at the pace they were, further making it good for potential buyers.

Now that we’ve covered the “why,” let’s see how you can take this information and be of value to your (potential) buyers and sellers:

• Explain why there’s no such thing as “timing the market.” Trying to wait for rates to go lower in this type of rate environment can leave you frustrated. Markets are moved by so many variables, with rates off their year-long highs and buyer demand not waning, it makes sense to get into that home now and as we see data points soften, your Key Mortgage loan officer will put together a plan to refinance when the conditions are right.

• Address sellers “trading out” their low rate. You know there are so many factors in making that decision to sell. If they are waiting for rates to continue to fall to justify losing the historically low rate they have now, that waiting game may come at a cost, both financial and personal.

We all know the decision to buy or sell a home is more than just a numbers game — there is an enormous emotional and personal aspect to this decision. Having information on the financial side of the process arms you with information and value that can help your client make that very personal decision and do what is right for them.

Your Key Mortgage loan officer can be the resource and partner you need to provide your clients that 360-degree view of their options — both now and into the future. If this sounds like how you are viewed (or want to be) by your clients, leverage me today and make this your most productive 4th quarter yet.