When do you think we will see the .5% rate drop hit loans?

Question

I know the market had priced in a .25% drop into loans for the last few weeks maybe a month. So when do we start to see the extra .25% hit on the loan side?

Why i ask is i am looking for a DSCR loan and hoping to see better loan rates soon.

Thanks

Chris Seveney · Answer

@Ryan Dunn

You are comparing apples and oranges. Fed rate has very little correlation to mortgage rates and there are many other factors more closely correlated to it.  It’s like asking someone how much weight are they losing by getting better sleep. Yes it helps but there are other factors that play a lot more into it

V.G Jason · Answer

The 10 year Treasury already priced in the rate cuts since top of August. You need to look at the 10 year not fed funds to understand mortgages.

Patrick Roberts · Answer

Over a month ago

Clayton Silva · Answer

Hey Ryan, great question, all the banks were anticipating the drop between 25 and 50 bps.  It was baked into the pricing as of about 2 weeks ago.  We are seeing the lowest rates we have seen in 2 years.

DSCR rates are really competitive right now

Erik Estrada · Answer

Why do so many people try to time the market? No one truly knows.

Ross Francis · Answer

Ryan,

Jay Hurst, posted an excellent explanation it this very sub forum. As most have been saying, it's been priced in over the past month or so.

Happy hunting!

Jeff Chisum · Answer

We have seen about a 1% drop in DSCR rates over the past week!

Daniel Baccarini II · Answer

Have to agree with Clayton here, Ryan. The current rates already included the anticipated rate cut. If you want to see which way DSCR rates are heading, track the 3-year, 5-year, and 10-year treasury yields. The Fed tends to lag treasury yields.

When do you think we will see the .5% rate drop hit loans?

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