Mortgage Rates I had a bad month. Actually, three bad years.

On November 7, the Federal Reserve implemented a 0.25% off in the federal funds rate, its second decline in more than four years. Potential buyers are longing for a glimmer of hope in the housing market. But experts don’t expect a dramatic rate cut before the end of the year.

After the Fed’s 0.5% rate cut in September, mortgage rates rose instead of falling. Although the central bank’s policy decisions and economic outlook affect credit markets, the Fed does not directly set mortgage rates. Mortgage rates are very volatile and respond to several factorssuch as market expectations, inflation and employment data. For example, after rates hit a two-year low in early September, a surprisingly strong jobs report pushed them back up to nearly 7%, where they remain today.

The extreme volatility of rates due to electoral uncertainty has made the situation worse. Although the presidential election The outcome is now resolved, mortgage rates have been hit hard and relief won’t come overnight.

The long-term view of mortgage rates

In recent weeks, bond market investors have panicked over how the next administration’s economic policies could increase government spending and put upward pressure on rates. Skepticism about the direction of the economy (with either candidate) is one of the main reasons 10-year bond yields rose last month. 10-year Treasury rates and mortgage rates have a strong correlation and tend to move in tandem.

“Many conservative players on Wall Street have championed the idea that President Trump would drive higher deficits and inflation with tariffs,” said Logan MohtashamiSenior Analyst at HousingWire. These investor outlooks have helped push up short-term mortgage rates. Rising inflation could prompt the Fed to keep interest rates higher for longer, delaying further rate cuts into 2025.

In the long term, however, multiple future cuts and weaker economic data are expected help mortgage rates fall. There is usually a lag between when the central bank starts lowering interest rates and when mortgage rates follow a consistently downward trend, said Jeff WenigerCFA and head of equity strategy at WisdomTree Asset Management. Mortgage rates may take two to five years to reflect the full effects of the Fed’s cuts.

Experts also don’t know the new “low” for mortgage rates – it could be 5% or 4% – but it all depends on how the economic outlook evolves. Anyway, a return to rate of 2 to 3% during a pandemic is unlikely.

Learn more: CNET Weekly Mortgage Forecast

Don’t wait for the lowest mortgage rate

Ultimately there is no way to predict the future of the housing market. Anything from another major crisis to a surprise rise in inflation could shake up the economy. Without a crystal ball, your best recourse is to keep an eye on daily changes in mortgage rates.

As mortgage rates begin to drop, some buyers will jump into the market, while others wait for even lower rates. Waiting too long could also be risky. Last month, mortgage rates appeared to be moving closer to 6%, but they quickly reversed course. Today, they are close to 7% again.

“It’s impossible to guarantee how mortgage rates will change, so you have to take advantage of opportunities when they present themselves,” said Jeb Smitha CNET Money expert and real estate agent with over 20 years of experience.

You you should not rush into buying a house (even if rates fall) if it doesn’t make sense for your budget or your lifestyle. Taking more time to build your credit score and putting money aside for a larger down payment will help you in the long run, while also helping you save money on your future mortgage.

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