The Fed Cut Rates Again… So Why Aren’t Mortgage Rates Falling? - and our take on it! / Josh M. Boggs

If you’re feeling confused right now, you’re not alone.

The Fed has now cut rates three times… yet mortgage rates are still hanging around like that one guest who won’t take the hint and leave the party.

So what gives?

Quick Reality Check (This Is the Part Most Headlines Skip)

Mortgage rates do not follow the Fed.

They follow the bond market, specifically the 10-year Treasury.

Here’s what actually happened:

• After the first Fed cut (Sept 17): 10-year Treasury ≈ 4.05%

• After the third cut (Dec 10): 10-year Treasury ≈ 4.15%

Translation:
The bond market shrugged.

And if investors want roughly 4% to lend money for 10 years, you better believe they want more to lend it for 30 years. That’s why mortgage rates are still living in the 6%+ range.

So Why Are Bonds Staying High?

One word: risk.

Actually… a few more words:

• Global government debt is massive

• Deficits are growing (the U.S. alone is running around $2 trillion per year)

• Investors are increasingly worried about repayment

When risk goes up, returns have to go up to justify lending money.

Higher perceived risk = higher borrowing costs
It’s that simple.

The Part We’ve All Forgotten

We were spoiled.

For over a decade after the Great Financial Crisis, rates were held artificially low:

• Money was cheap

• Asset prices exploded

• Homeowners saw massive appreciation

That era wasn’t “normal.”
It was an exception.

Today’s rates?
They’re actually much closer to historical norms — even though home values are still near historic highs.

Where This Likely Heads (2025–2026)

Here’s the honest outlook:

Mortgage rates likely stay in the 5.75%–7% range through most of 2025 and into 2026.

If rates don’t fall meaningfully, prices have only one way to relieve pressure:
👉 They adjust.

And yes… we’re already seeing early signs of that in certain pockets.

A Little Perspective (This One’s Wild)

Let’s talk about home values in terms of gold:

• 1970: Median home = ~114 ounces of gold (~$23,000)

• 2025: Median home = ~117 ounces of gold (~$415,000)

What does that tell us?

It’s not just housing prices going up — it’s currency value going down.

Real estate (like gold) has remained one of the strongest long-term hedges against inflation and money creation.

My View Going Into 2025–2026

Scenario A – The Hopeful One

• Rates dip into the high 5s

• Values flatten or rise slightly due to pent-up demand

Scenario B – The More Likely One

• Rates stay stubborn

• Values soften modestly

• Buyers gain leverage

• Seller concessions continue saving buyers thousands

What About the Fed Going Forward?

The Fed will probably cut 2–3 more times next year.

But don’t expect mortgage rates to celebrate.

Why?
Because the bond market has already priced those cuts in.

The “Bad News” (AKA: Reality)

• Nothing goes up forever

• Rates will likely stay sticky

• Buyers think it’s 2008

• Sellers think it’s 2021

• Cost of living remains high

• Uncertainty causes hesitation

The “Good News” (This Is Where Smart Moves Happen)

• Owning assets long-term still wins

• Homeownership brings stability, pride, and control

• You make your money on the buy, not the sell

• Fear-based markets create the biggest opportunities

And let’s not forget the Five D’s that always drive real estate:
Death, Debt, Diamonds, Diapers, Divorce

Life doesn’t pause just because rates are higher.

Seller credits are helping buyers more than most people realize — and if the economy truly cracks?
Rates will drop fast and liquidity will flood back into the system.

Bottom Line

This market isn’t broken.
It’s just different.

And different markets don’t reward hesitation — they reward clarity, strategy, and smart timing.

If you want help navigating it the right way, that’s exactly what we do every single day.