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Fed makes rate cut decision that could impact mortgage rates

Fed makes rate cut decision that could impact mortgage rates

Fed makes rate cut decision that could impact mortgage rates
The Federal Reserve made another emergency rate cut over the weekend, slashing its benchmark rate to nearly zero percent amid concerns of economic fallout over the ongoing pandemic. This is the second rate cut by the fed in as many weeks.

The rate cut will result in lower borrowing costs for homeowners with adjustable-rate home equity loans and could also impact long-term mortgage rates. The central banks rate cut will put increased pressure on bond yields which will likely drive down 30-year mortgage rates.

The average 30-year fixed mortgage rates briefly fell to a record low last week before quickly reversing course and sharply rising due to market turmoil and a wave of refinancing applications.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.5 percent and 15-year rates are near 2.875 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.