If you think Fed rate cuts automatically lead to lower mortgage interest rates, you would be wrong. And we don’t have to look any further than last Fall to see why Puget Sound real estate investors need smart financing solutions—like those offered by Juniper Capital.
On September 18th, 2024, the Fed cut interest rates by half a percent (.5%), followed by another quarter percent cut on December 18th, for a total of .75% in the second half of the year. While these cuts were designed to support the economy, mortgage interest rates rose instead of falling—from 6.11% on 9/17/24 to 7.13% on 12/18/24.
Here’s why: the Fed only sets short-term interest rates—things like credit cards, car loans, and lines of credit. Mortgage rates, on the other hand, are tied to long-term bonds like the 10-year Treasury and are heavily influenced by expectations of inflation. If investors believe inflation will stay high, they demand higher returns on long-term loans—so mortgage rates go up, even when the Fed is cutting rates. Simply put, the Fed can push one lever, but mortgage rates respond to a completely different set of forces.
Understanding the difference between Fed cuts and mortgage rate trends is critical. Mortgage rates may fluctuate due to inflation signals, labor market shifts, or tariff impacts, but Juniper Capital helps borrowers lock in opportunities without waiting for conventional rates to align. Their approach allows Puget Sound investors to focus on finding the right opportunity, not chasing the day-to-day swings of mortgage markets.
If you’re seeking quality commercial real estate investments throughout the Pacific Northwest, we’re here to help. Juniper Capital provides private real estate financing, including hard money loans for commercial, construction, multifamily residential opportunities and more. If you would like more information on this topic, call us today.
