starting to ease<\/a>, as existing home sales inched up 2% month over month. Meanwhile, mortgage rates in the last week have tumbled to their lowest level in 11 months, driving a new wave of financing activity. <\/p>\nBut according to Morgan Stanley, aspiring buyers shouldn’t expect the September rate cuts to lead to vastly improve the landscape for buying a bome. <\/p>\n
In a September 8 note, global director of research Katy Huberty discussed why the bank believes the highly anticipated cuts will be insufficient for driving down mortgage rates and accelerate buyer activity.<\/p>\n
She said that while Morgan Stanley’s analysts predict that rates will be lowered 150 basis points by the end of 2026, its US housing market strategists still see it as unlikely to lower mortgage rates.<\/p>\n
“They do not expect the belly of the Treasury yield curve \u2014 which is correlated with mortgages \u2014 to move in response to that path of Fed cuts,” Huberty said.<\/p>\n
In addition, the analyst noted that the “lock-in effect” will still be an issue, even if rate cuts were to push borrowing costs down for home buyers. More than 60% of outstanding mortgages carry a rate of less than 4.5%. <\/p>\n
“Even a 200bps decrease in mortgage rates would still leave over half of the outstanding mortgage market at rates lower than those on new mortgages.”<\/p>\n","protected":false},"excerpt":{"rendered":"Mario Tama\/Getty Images 2025-09-11T09:15:02Z Share Facebook Email X LinkedIn Reddit Bluesky WhatsApp Copy link lighning bolt icon An…\n","protected":false},"author":3,"featured_media":218433,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[4833,64,72525,79,119247,316,8166,9105,13201,76608,119250,34416,25239,119249,13328,119248,67,132,68],"class_list":{"0":"post-218432","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-analyst","9":"tag-business","10":"tag-buyer","11":"tag-economy","12":"tag-elevated-rate","13":"tag-home","14":"tag-housing-market","15":"tag-month","16":"tag-morgan-stanley","17":"tag-mortgage-rate","18":"tag-national-association","19":"tag-next-week","20":"tag-note","21":"tag-outstanding-mortgage","22":"tag-rate-cut","23":"tag-top-bank","24":"tag-united-states","25":"tag-unitedstates","26":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115186277411138164","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/218432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=218432"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/218432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/218433"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=218432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=218432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=218432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}