'Abnormal' gap, as mortgage rates rise on inflation fears, despite Fed rate cutsby almost as much during that period and have lately averaged around 6.8%, higher than they were when the Fed began cutting, according totion-backed average interest for new real estate and capital improvement loans rose more than half a percent since September, according to data collected bydon’t directly set long-term mortgage and business loan rates.
Rhame said her research on past Fed performance suggests long-term mortgage rates could stay at or above 5% into next year. When mortgage and business-loan rates rise despite Fed cuts, it suggests lenders are concerned inflation, economic growth, and property, stock and other asset pricesMortgage inquiries slowed during the recent presidential campaign, as if buyers were waiting to see who won, but calls from would-be buyers have surged since“I received more calls since Thursday than in the last three weeks,” he said in an interview last week.
Kent, the mortgage banker, noted that Fed rate cuts have more impact on credit cards, car loans, and other short-term borrowing than on business and mortgage loans. If mortgage rates stay high, he expects more buyers will ask for adjustable-rate loans,Analysts say high mortgage rates reflect, in part, expectations that inflation would increase next year — for example, if the Trump administration makes good on promises to cut taxes without corresponding cuts to the major categories of U.S.