What our collective industries were waiting for finally happened — the eagerly anticipated Federal Reserve rate cut! With the Fed Funds rate cut by .5%, buyers are lining up to take advantage of this, right? Well, not exactly — let’s talk about why.

In our series of articles on this subject, we’ve explained that while the Fed Funds rate does not directly impact mortgage rates, it does impact short-term lending rates such as credit cards or home equity lines of credit. Historically, this has always had the same trickle-down effect to the longer-term rates such as mortgages. But what may not have been on everyone’s radar is that the bond market already had its eye on these rate cuts and has been moving yields lower over the past few months in anticipation of both this and future cuts.

So the market moves on data AND commentary, and what raised rates right after the cut was Chairman Powell’s announcement that this was not an emergency cut. He emphasized that they will be measured in their approach and take their cues from the data. Here are just a few data points they (and the market) will be watching for:

• Jobless Claims: A weakening job market lends itself to lower rates. For context, last week’s jobless claims were LESS than expected, hence a reason for rates to stay steady.

• Housing Starts: Builder confidence and buyers willing to enter into a contract show a robust market, which will give pause to the need for lowering rates to stimulate demand.

• Retail Sales and Industrial Production: If the consumer continues to spend and companies continue to manufacture, there is less need to stipulate that through lower rates. A weakening in these areas provides fuel for further rate cuts.

Since our crystal ball is out of service, we will have to rely on the data to tell the story, along with the Federal Reserve’s interpretations and actions. The markets are already out ahead of that trying to predict what those actions may be.

So the key takeaway is that while it would be ideal to try and time a move to the market, greater forces will dictate whether or not someone should buy or sell. Lifestyle, life events, market appreciation — all of those things will play a larger role in determining if someone needs to buy or sell — and our collective job is to help provide the education and framework to accomplish this in any rate environment.

If you find this information helpful in adding value to your clients, why not leverage this in real-time? Include your Key Mortgage loan officer in your buyer AND seller consultations, your home reviews and any client-facing events you may have to further cement your value to your clients.