While all eyes are on the Federal Reserve's interest rate cut, mortgage rates may not fall in tandem. Rate SVP of mortgage lending Jennifer Beeston joins Wealth! to discuss the outlook for mortgage rates as interest rate cuts and the election loom ahead.

Beeston explains that most traders are expecting a 25-basis-point cut from the Fed at its September meeting. If that scenario comes true, she does not expect mortgage rates to change from their current levels. However, if a 50-basis-point-cut were to be initiated, it would come as more of a surprise, likely encouraging mortgage rates to start falling. "What's interesting is that rates don't just follow the Fed," she adds.

She notes that mortgage rates have fallen over the last year, noting that the current rate on a 30-year fixed mortgage sits at 6.2% compared to about 7.8% in October 2023. With the average price of a home in the US hovering around $500,000, this drop in rates equates to about $520 a month in savings.

While some homeowners may be looking to refinance, Beeston explains that the decision ultimately depends on individual situations. She encourages speaking with loan officers to determine potential areas for saving and whether it makes more sense to hold off on the decision given the tight election ahead.

She explains, "You have some people that are waiting until the presidential election to go shopping. You have other people that are waiting to see what pans out because there's such different housing policies. So I think right now we're in a really good moment where rates are great. And I think as we get closer to the election, we're going to see more and more volatility."

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This post was written by Melanie Riehl