Why Mortgage Rates Went Up After the Fed Cut Rates — What It Means for Homebuyers in Vancouver, WA
By Bill Black | Sr. Mortgage Broker, NW Funding Group | NMLS #49242
If you heard the Federal Reserve cut interest rates—and then noticed mortgage rates went up—you’re not imagining things. This is one of the most common points of confusion I walk my Vancouver-area clients through. The Fed’s most recent meeting gave us the perfect real-world example of why this happens and what it means for your mortgage strategy.
The Fed Cut Rates… But Mortgage Rates Didn’t Follow
During its latest meeting, the Federal Reserve lowered its benchmark rate by 0.25% and announced it’s ending quantitative tightening(QT)—the process of reducing its bond holdings.
Both of these moves were expected by the market, so mortgage rates barely reacted.
But then, during his press conference, Fed Chair Jerome Powell made one key comment:
- “Another rate cut in December isn’t guaranteed.”
That single statement changed everything. Within hours, Treasury yields jumped, and mortgage rates across the country—including here in Vancouver, WA—moved higher.
Why Mortgage Rates Don’t Move with the Fed
Here’s the biggest myth out there: mortgage rates don’t move in lockstep with the Fed’s rate changes.
- The Fed controls short-term interest rates—think credit cards, auto loans, and home equity lines.
- Mortgage rates, however, are tied to the bond market, specifically the 10-year Treasury yield.
When Powell suggested the Fed might not cut again soon, investors adjusted their expectations—pricing in fewer cuts ahead.
That caused bond prices to drop, yields to rise, and mortgage rates to follow suit.
In short:
- The Fed’s rate cut was already priced in.
- Powell’s cautious tone was the real driver of higher mortgage rates.
- The 30-year fixed rate jumped back to mid-October levels—still lower than most of 2024, but higher than last week.
What’s Next for Mortgage Rates in Vancouver, WA
Now that the Fed is signaling a slower pace of cuts, the focus shifts back to economic data—especially inflation and jobs reports that were delayed by the government shutdown.
- If inflation cools or job growth slows, we could see rates move lower again.
- If economic data stays strong, expect mortgage rates to stay elevated a bit longer.
Either way, volatility isn’t going anywhere soon. Buyers and homeowners in Vancouver should expect rate fluctuations as investors react to every new economic headline.
What This Means for Homebuyers and Homeowners in Clark County
Even though rates ticked up after the Fed meeting, we’re still near some of the lowest mortgage rates since 2022.
That’s creating real opportunities in the local market:
- Homebuyers in Vancouver, WA: Increased purchasing power and more negotiating leverage with sellers.
- Homeowners: A chance to explore refinance opportunities that haven’t existed for years.
Here’s my advice:
- If you’re under contract or applying—lock your rate. The market moves fast, and small changes can cost you thousands.
- If you’re still shopping—stay informed. The next inflation report could bring another short-term dip in rates.
- If you’re planning ahead—create a strategy. Whether you’re buying or refinancing, timing and loan structure matter more than ever.
The Key Takeaway
Mortgage rates aren’t set by the Federal Reserve—they’re shaped by market expectations and investor psychology.
Understanding that difference helps you make smarter financial moves when buying, refinancing, or investing in Vancouver real estate.
If you’re wondering when to lock your rate, how to qualify for the best mortgage program, or what local refinance options make the most sense, I’d be happy to walk you through it.
Let’s Talk Strategy
Bill Black – Sr. Mortgage Broker, NW Funding Group
Serving Vancouver, WA, Clark County, Portland Metro, and the greater Southwest Washington area
bill@billcblack.com | NMLS #49242
Helping Vancouver homebuyers and homeowners make smart mortgage moves since 2001.