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Here’s what the Fed rate cut means for your mortgage and the housing market

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As expected, the central bank delivered a quarter-point cut Wednesday and projected it would lower its benchmark rate twice more this year, reflecting growing concern over the U.S. job market.

Here’s a look at factors that determine mortgage rates and what the Fed’s latest move means for the housing market:

How rate cuts affect mortgage rates

Mortgage rates have been mostly falling since late July on expectations of a Fed rate cut. The average rate on a 30-year mortgage was at 6.35% last week, its lowest level in nearly a year, according to mortgage buyer Freddie Mac.

A similar pullback in mortgage rates happened around this time last year in the weeks leading up to the Fed’s first rate cut in more than four years. Back then, the average rate on a 30-year mortgage got down to a 2-year low of 6.08% one week after the central bank cut rates.

But it hasn’t come close to that since.

Mortgage rates didn’t keep falling last year, even as the Fed cut its main rate two more times. Instead, mortgage rates rose and kept climbing until the average rate on a 30-year home loan reached just over 7% by mid-January.

Like last year, the Fed’s rate cut doesn’t necessarily mean mortgage rates will keep declining, even as the central bank signals more cuts ahead.

“Rates could come down further, as the Fed has signaled the potential for two more rate cuts this year,” said Lisa Sturtevant, chief economist at Bright MLS. “However, there are still risks of a reversal in mortgage rates. Inflation heated up in August and if the September inflation report shows another bump in consumer prices, it’s possible we could see rates rise.”

How mortgage rates are set

The Fed doesn’t directly set mortgage rates. Instead, they’re influenced by several factors, from the Fed’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation.

Mortgage rates generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

That’s because mortgages are typically bundled into mortgage-backed securities that are sold to investors. To keep mortgage-backed securities attractive to investors, their yield — or annual return — is adjusted to be competitive with the yield offered by the U.S. on its 10-year government bonds. When those bond yields rise, they tend to push up mortgage rates, and vice-versa.

The 10-year Treasury yield has been mostly easing since mid-July as growing signs that the job market has been weakening fueled expectations of a Fed rate cut this month.

Until now, the Fed had kept its main interest rate on hold this year because it was more worried about inflation potentially worsening due to the Trump administration’s tariffs than about the job market.

At the same time, inflation has so far refused to go back below the Fed’s 2% target.

When the Fed cuts rates that can give the job market and overall economy a boost, but it can also fuel inflation. That, in turn, could push up mortgage rates.

“It’s not just about what the Fed is doing today, it’s about what they’re expected to do in the future, and that’s determined by things like economic growth, what’s going to happen in the labor market and what do we think inflation is going to be like over the next year or so,” said Danielle Hale, chief economist at Realtor.com.

What to expect for mortgage rates

“If the Fed keeps lowering rates, it doesn’t necessarily mean mortgages will go down,” said Stephen Kates, financial analyst at Bankrate. “It means that they probably could go down more, and they may trend in that direction, even if they don’t move in lockstep.”

Ahead of the Fed’s rate cut, the futures market had priced in expectations that the central bank would cut its key interest rate at upcoming policy meetings this year and into 2026. But the Fed’s latest projections show a less aggressive path of rate cuts than the market has been expecting.

“This ongoing gap between market and Fed expectations means that some risk of upward pressure on mortgage rates remains,” said Hale, adding that the decline in mortgage rates “is likely to continue at least through this week.”

Hale recently forecast that the average rate on a 30-year mortgage will be between 6.3% and 6.4% by the end of this year. That’s in line with recent projections by other economists who also don’t expect the average rate to drop below 6% this year.

Overall impact on the housing market

The late-summer pullback in mortgage rates has been a welcome trend for the housing market, which has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years and have remained sluggish so far this year.

While lower rates give home shoppers more purchasing power, mortgage rates remain too high for many Americans to afford to buy a home. That’s mostly because home prices, while rising more slowly than in years past, are still up by roughly 50% nationally since the start of this decade.

“While lower rates will bring some buyers and sellers into the market, today’s cut will not be enough to break up the housing market logjam,” said Sturtevant. “We will need to see further drops in mortgage rates and much slower home price growth, or even home price declines, to make a dent in affordability.”

If mortgage rates continue to ease, home shoppers will benefit from more affordable financing. But lower mortgage rates could also bring in more buyers, making the market more competitive at a time when sellers across the country are having a tougher time driving a hard bargain.

The options for home shoppers and buyers

Predicting when mortgage rates will decline and by how much is daunting because so many variables can influence their trajectory from one week to the next.

Home shoppers who can afford to buy at current rates may be better off buying now if they find a property that fits their needs, rather than attempt to time the market, said Kates.

Many homeowners looking to refinance have already seized on the decline in rates, sending applications for refinance loans sharply higher in recent weeks.

One rule of thumb to consider when refinancing is whether you can reduce your current rate by at least one percentage point, which helps blunt the impact of refinancing fees.



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Jim Carrey nearly quit ‘Grinch’ — Then the founder of SEAL Team Six came to the rescue

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For his role in the movie How the Grinch Stole Christmas, which came out in 2000, Jim Carrey’s tortuous costume and makeup had him on the verge of walking away from a $20 million paycheck.

In an interview with Vulture, the actor said the first day of makeup took eight hours. He nearly quit and suffered from panic attacks after having to wear painful green contacts, makeup that made him breathe through his mouth the whole time, and a full body suit made of itchy yak hair. But before he walked away, producer Brian Grazer hired the founder of SEAL Team Six to help Carrey suck it up.

“Richard Marcinko was a gentleman that trained CIA officers and special-ops people how to endure torture. He gave me a litany of things that I could do when I began to spiral. Like punch myself in the leg as hard as I can. Have a friend that I trust and punch him in the arm. Eat everything in sight. Changing patterns in the room,” Carrey told Vulture in the interview, which was published on Friday.

“If there’s a TV on when you start to spiral, turn it off and turn the radio on. Smoke cigarettes as much as possible. There are pictures of me as the Grinch sitting in a director’s chair with a long cigarette holder. I had to have the holder, because the yak hair would catch on fire if it got too close,” he added.

Carrey said he later learned that Marcinko was the founding officer of SEAL Team Six, the famed special-operations unit. Marcinko passed away at age 81 in December 2021.

Director Ron Howard and Grazer, who were also part of the Vulture interview, recalled Carrey struggling onset because of his Grinch costume.

Howard said the pain he endured was less physical than mental as the makeup was “destroying” Carrey’s skin. It was determined by medical professionals that Carrey couldn’t work in the makeup five days in a row, so he would have a day off or only be off-camera feeding dialogue on Wednesdays, he added.

“Jim started having panic attacks. I would see him lying down on the floor in between setups with a brown paper bag. Literally on the floor. He was miserable,” Howard said.

Carrey even offered to return his entire $20 million paycheck, with interest, Grazer said. But, instead Grazer found Marcinko. 

“I said, ‘Listen, you can quit on Monday, but just spend time with this guy on the weekend,’” Grazer said.



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A NIMBY revolt is turning voters in Republican strongholds against the AI data-center boom

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Silicon Valley and Washington sees data centers as the backbone of America’s AI future. Residents who live next to them see giant, humming boxes that throw diesel exhaust into the air, drive up energy costs, and steamroll the look and feel of their neighborhoods—“a plague,” as Virginian anti-data center activist Elena Schlossberg put it.

“If you live near a data center that’s being powered by these gas turbines, you simply cannot imagine living there,” she said. You can “hear the noise” in your home, added Schlossberg—who got into the fight a decade ago while trying, unsuccessfully, to stop Facebook from putting a data center next to her property. 

Virginia has long been the biggest data center hub of not just the country but the world, with northern Virginia alone hosting 13% of the globe’s data centers in 2023, according to a government report. And for just as long, residents have been locked into battles over what that footprint means for their communities.

Now, Schlossberg is leading a Virginia nonprofit group, Save Prince William County, to fight against the encroachment of even more data centers to power the AI boom. Data center power demand is expected to rise five-fold over the next decade, Deloitteprojects; reaching 176 gigawatts, the same amount as Australia and the United Kingdom’s entire power grids combined.

AI infrastructure builders, and the tech giants that plan to rely on the future data centers, argue that they’re essential to unlocking AI’s economic benefits. But in some of the states slated to house these projects, many of them politically purple-ish or even red—Virginia, Indiana, Ohio, Pennsylvania—voters are revolting, often successfully keeping them out of their neighborhoods. Indeed, in elections held last month, opposition to data centers helped tip elections in Democrats’ favor in Virginia and Republican-leaning Georgia.

“Folks realize they’re getting duped,” said Kerwin Olson, executive director of the Citizens Action Coalition, an environmental advocacy coalition based in Indiana. “It’s not just something they hear on Fox News or MSNBC anymore. It’s happening in their own backyard.”

Big Tech companies, Olson added, are showing up at local planning commissions and drainage boards asking for “huge giveaways”— tax abatements, zoning variances, special exceptions —”all to build a $3 billion box that creates maybe 30 jobs.”

“So they’re like, what’s in it for us?” Olson asked. 

Upcoming political battles

The first signs of what could be a broader political reckoning are appearing at the county level. In Prince William County—home to the fight over a proposed 2,000-acre “Digital Gateway” development near the Manassas battlefield—data centers have already forced recalls, resignations, and primary defeats of elected officials, Schlossberg said. The issue has become so radioactive that candidates in both parties now treat opposition to data-center expansion as a prerequisite for running, she added.

“It’s never been red versus blue,” Schlossberg said. “It’s people who live here versus people who want to industrialize where we live.”

That county could be a canary in the coalmine for what comes next, as Democrats and Republicans approach critical midterm congressional elections in 2026. Across key swing states, activists say the next wave of AI-driven projects will collide with a public that is far more organized and hostile than it was even two years ago. 

That tension is beginning to creep into politics. In Indiana, legislators publicly tout the state’s new data-center incentives while privately warning counties that the projects are not without tradeoffs. In Virginia, candidates now get asked—at libraries, at farmer’s markets, even at high school football games—whether they would support a temporary moratorium.

Olson said his group has been “buried” in calls from Hoosiers in every corner of the state—red, blue, rural, suburban—asking for help deciphering tax abatements and utility filings. “I’ve worked on energy issues for decades,” he said. “I have never seen anything like the scale of anger over this.”

When voters see those consequences firsthand, Olson said, they stop caring about geopolitical talking points. “You can tell people this is about beating China,” he said. But when their bill goes up, and their kids are sleeping in basements with headphones on because of the noise, they’re not thinking about China. 

At the heart of the backlash is a basic economic question that data-center backers haven’t convincingly answered: Why should the public subsidize infrastructure that serves some of the world’s richest companies?

Indiana’s first filing under its new “80/20” law—touted as a safeguard to make data centers pay most of the costs—still leaves ratepayers actually footing nearly 40% of the bill, Olson said. The organization he runs, Citizens Action Coalition, did an analysis that revealed that Hoosier households paid 17.5% more in utility bills in 2025 than the previous year. In Virginia, residents fear they will ultimately finance the transmission lines and new generation needed to serve hyperscale facilities.

“The public utility model was always a social contract,” Schlossberg said. “The data-center industry blew that up.”

In many ways, the backlash boils down to a trust problem. Residents don’t trust Big Tech, seeing the hyperscalers as being like “robber barons at the turn of the century” but with unprecedented demands for land, water, and power. Olson pointed to NDAs, closed-door negotiations, and local officials dining with tech consultants as signs that decisions are being made over communities’ heads and without local voters’ input. Layered onto that is a broader skepticism of AI itself: Many voters aren’t convinced they should remake their towns for what still feels like an unproven or overhyped technology.

“It’s like the Gilded Age, part two,” Olson said. “Only bigger.”



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The job market is so bad, people in their 40s are resorting to going back to school instead of looking for work

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This year’s job market has been bleak, to say the least. Layoffs hit the highest level in 14 years, job openings are barely budging, and quits figures are plummeting. It’s no wonder people feel stuck and discouraged—especially as many candidates have been on the job hunt for a year.

But some mid-career professionals are working with the cards they’ve been dealt by going back to school. Many are turning to data analytics, cybersecurity, AI-focused courses, health care, MBA programs, or trade certifications for an “immediate impact on their careers,” Metaintro CEO Lacey Kaelani told Fortune.

Metaintro is a job-search engine with 2 million active users that runs on open-source data processing more than 600 million jobs in real time.

“We absolutely see this trend [of adults going back to school] accelerating,” Kaelani said. “In combination with layoffs over the recent years plus the rise of required AI skills, experience is no longer enough.”

Kelsey Szamet, an employment attorney with Kingsley Szamet Employment Lawyers, said she’s noticed people over the age of 40 to go back to grad school or earn certifications.

While it’s not necessarily a completely new phenomenon, it’s becoming more frequently now that the job market is the pits. 

Still, Szamet he sees “very consistent” reasons for people considering higher education at a later stage in life. Some believe they’ve “plateaued” in their career and education is the only option. Others have been affected by layoffs, and there are some “who have simply become burned out with work and want a meaningful profession,” she told Fortune

“Then, too, come life circumstances. Some people have fewer responsibilities, better financial security, or a sense they will never make a change if they put it off now,” she said, adding she’s seeing more people pivot out of “dying industries,” those whose salaries have stagnated, or those who have job-security fears.  

According to Hanover Research, the top master’s degrees on the rise include artificial intelligence, mechatronics, robotics, automation engineering, research methodology, quantitative methods, as well as construction engineering technology. 

The cost of going back to school

Sometimes going back to school can also just feel like delaying the inevitable: student loans and other living costs. 

While grad school can certainly offer the opportunity to level-up your career once you’ve completed a program, it comes with financial and personal sacrifices, like time. According to the National Center for Education Statistics, one year of grad school, on average, costs about $43,000 in tuition. That’s nearly 70% the average salary in the U.S.

“Going to school can be very beneficial, but it can be very costly too,” Szamet said. And, when people are older and going back to school, they should consider “the cost of education and how stressful it can be to juggle work and family responsibilities with education.” Overall, “one ought to assess if it will be a good investment,” she added. 

That’s why it’s important to do your homework. Some degree programs have a better return-on-investment than others. According to an ROI analysis by the Foundation for Research on Equal Opportunity, the median master’s degree increases lifetime earnings by $83,000, but some master’s degrees are worth more than $1 million. Computer science, engineering, and nursing are some of the highest-ROI master’s programs, with average ROIs of about $500,000, according to the Foundation for Research on Equal Opportunity analysis. 

Still, 40% of master’s degrees actually “have no net financial value at all,” according to the report.  

“In today’s job market, going back to school only works when it’s strategic and targeted [like a] specific technical certification in a high-demand field), but fails when it’s vague,” Kaelani emphasized. “It’s no longer ‘more education equals a better job.’”

This story was originally featured on Fortune.com



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