Mortgage rates to shine like the sun through the month of September?

September 2019
By Andy Cruz

It is September 2019 and the state of the mortgage market has definitely had its twists and turns so far this year. In the first half of the year, we saw the Fed announced that they would be increasing the Fed funds rate During the calendar year, And Then they came out and said they will hold the rates. And now they are indicating that they might even do a rate cut. Now, even though mortgage money does not come from the Federal Reserve, the Federal Reserve’s opinion on the overall health of the economy heavily weighs in on whether or not investors put money into mortgage backed securities. This is important because when the Federal Reserve indicates the economy is doing really well, then they can allow moderate inflation to continue on, which also means the mortgage rates might increase as well. But if the market does not have an appetite for an increasing Fed funds rate, then they have no other option but to hold their position or reduce the rate over time. When this happens, typically, there is more mortgage backed securities investment money that comes into the marketplace. And because there’s now more supply of money to lend rates go down as well.

While this is a pseudo-technical explanation of how the Federal Reserve’s opinion influences mortgage rates, there are many other factors investors consider. At this point in the year though, it should be noted that we were are expecting a Fed rate cut coming up, but it will remain to be seen if that will result in reduced mortgage rates.

If the Fed does cut rates, maybe we shouldn’t be surprised. Here’s some of what I’ve been monitoring over the past month. Keep your eyes peeled and stay on your toes as this is a short list of influencing factors. Remember to consult your mortgage professional if you are in need of a strategic refinance to help your overall financial outlook.


  • Although the White House should not have any influence on what the Federal Reserve does. It seems that maybe they are having some sort of influence behind the scenes. Although, they will not admit it publicly or in the news media. It seems that upcoming economic health is going to play heavily into the 2020 election, which may mean that is why we are seeing these types of Fed rate moves now.
  • China tariffs are having a variety of impacts on United States companies and consumers. Hindsight being 20/20 the tariffs may cause more of a economic slowdown rather than become a revenue generator for our economy by taxing imports…call it a hunch, but as consumers ourselves, increased costs historically get “baked” into the cost of products we buy. I personally don’t expect it to be any different this time around.
  • Oil and Saudi Arabia. An unexpected attack created supply concerns and even greater geo-political concerns. It’s unclear on what this will mean to us militarily until facts become known and a response is determined. Although military response is not directly correlated to the mortgage industry, when you connect the dots, events like this trickle their way into our ecosystems to cause ripple effects in psyche, sentiment, and most importantly our active duty military personnel we serve.