While Treasure Coast homebuyers shouldn't expect mortgage interest rates to drop to zero anytime in the near future, there is still opportunity on the horizon.

Many homebuyers aiming to get pre-approved for a mortgage were undoubtedly excited to hear of the Fed cutting rates to 0% in its recent move towards quantitative easing. The rate cut in and of itself, however, isn't going to lead to a drop in mortgage interest rates. As most homebuyers saw, interest rates actually increased on Monday. Rates are still at historic lows, however, and there are many people on the Treasure Coast wondering how they can take advantage of these rates and what may happen in the coming days, months, and years.

Treasure Coast HomeIt's important for anyone interested in Treasure Coast real estate to remember that the Fed has cut rates to 0% in the past. It did so starting in 2008 and the median interest rate for mortgages was 4.2%. Remember that the Fed rate is the rate banks pay to borrow money, but that number isn't directly indicative of what rate any individual homebuyer will get. While rates are expected to drop by many experts, monetary policy from the Fed historically takes time to make splashes. 

The Federal Reserve's purchase of at least $200 billion in mortgage-backed securities is another side of the coin which most experts believe will help strengthen the mortgage market to keep rates low. If it weren't for this move, private investors on the secondary mortgage market may see the investments as too risky to take on at such a low rate. Since mortgages are long-term debts, the rates can be higher than short-term rates, like the federal funds rate, since they're seen as having more risk.

For those searching Treasure Coast homes, there is certainly potential for mortgage interest rates to drop. If you're looking to refinance or buy a home on the Treasure Coast, rates are still at historic lows and there are great terms to be taken advantage of. If you're looking to get pre-approved, buy a home, or just have questions about how these recent events will effect you, reach out to us. We're always at your disposal for any thoughts, questions, or needs regarding Treasure Coast real estate.