Let’s Cut Through the Noise
Scroll your feed right now and you’ll see it — people giving predictions on where rates are going like they’ve got a crystal ball. Charts, buzzwords, exact numbers. And the comments? A circus.
Here’s the reality: it doesn’t matter who’s sitting in the Oval Office. Presidents don’t set mortgage rates. There isn’t a lever in Washington labeled “mortgage rates” that anyone can yank up or down.
Those dream rates you miss so much? They weren’t a sign of a healthy market. They were the economy on life support. The Fed only slammed rates that low because we were in crisis mode, trying to keep the whole system from flatlining.
Wishing for that again is like saying, “Remember when I was in the ICU on oxygen? Man, I miss those days.” If we see rates that low again, it means something’s seriously broken. So, if you’re waiting for “the good old days,” you’re really hoping for the next emergency.
The Fed Isn’t Behind the Wheel — They’re Just Flashing the Lights
So, if it’s not the president, who’s steering this? The Federal Reserve — “the Fed” — the central bank of the United States.
Except, they’re not actually driving the car. They’re more like highway patrol. They can slow things down, speed things up, wave people over, and try to prevent a pile-up, — but they can’t control every turn of the wheel.
Their goal is balance. Too fast, and prices run away from you — your paycheck buys less, and inflation eats everything alive. Too slow, and the economy seizes up — businesses pull back, jobs disappear, and opportunity dries up.
Picture it: 90 mph with no rules is exhilarating… right up until one wrong move wipes out the whole lane. Gridlock is safer, sure, but you’re burning fuel and going nowhere. The Fed’s job is to keep things moving without blowing the engine or turning the road into a parking lot.
And now ask yourself: how formulaic is that job when you’ve got millions of unpredictable drivers, accidents happening out of nowhere, weather changes, detours, and people cutting across three lanes without a blinker?
Low Rates Don’t Lift All Boats — They Sink Retirees
Most people think lower rates are a win for everyone. They’re not.
When rates are low:
- Borrowers win — cheaper homes, cars, and business loans
- Savers and retirees lose — “safe” parking spots like CDs, savings accounts, and bonds pay next to nothing
If you’re close to retirement and have shifted into safer investments, rock-bottom rates can mean those “safe” returns don’t even keep up with groceries or gas.
Right now, savers are enjoying 4–5% yields in money markets — like cruising with the wind at your back. But if the Fed cuts too far, that tailwind disappears, and suddenly you’re coasting uphill.
It’s one of the least-talked-about truths in this whole debate, and one people can’t afford to ignore.
If You Think Anyone Can “Call” Rates, You’re Wrong
Here’s another thing people get wrong: the Fed doesn’t just walk into a control room, flip a switch, and — boom — mortgage rates change.
What they actually set is called the federal funds rate — the interest rate banks charge each other for really short-term loans. Think of it like borrowing a cup of sugar from your neighbor, except the “sugar” is money, and instead of returning it next week, you’re paying it back tomorrow.
That rate is more like a starting point for borrowing costs, but it’s not the same as your mortgage rate, car loan rate, or credit card rate. Mortgage rates are much more connected to the 10-year Treasury yield, which is the return investors receive for lending money to the US government for 10 years.
“Yield” is just a fancy way of describing the annual payoff you get compared to what you put in. If you invest $100 and get $4 a year, that’s a 4% yield. Investors constantly compare the safety and return of those government bonds — which are about as close to guaranteed as you can get — with riskier, but potentially higher-paying options, like mortgage-backed securities.
When many investors flock to Treasuries, yields tend to drop — and mortgage rates often follow suit. When they move into riskier investments like stocks, Treasury yields rise, and mortgage rates usually follow.
So yes, the Fed influences rates, but they’re not behind the wheel. They’re one traffic cop at one busy intersection, and the rest of the flow is shaped by far more than just their whistle.
The ‘Good Old Days’ Were Actually the Worst Days
People talk about 2.5% or 3% mortgage rates like they were in some golden age. But those rates didn’t show up because the road was clear and sunny — they showed up because the economy had just slammed into a wall.
In 2008, the housing market imploded. Banks failed, businesses folded, and the whole financial system was swerving out of control. The Fed dropped rates to near zero just to keep the engine running.
Then in 2020, COVID hit. Businesses shut down overnight, millions lost jobs, and the Fed had to slam rates again to keep the wheels from flying off completely.
Here’s the truth: those “emergency speed limits” aren’t meant to last. Cheap money brings more buyers into the market, but if supply doesn’t match, housing prices rise quickly. That’s exactly what happened.
Low rates sparked a buying frenzy, inventory vanished, and prices climbed higher.
Jersey Housing: Lower Rates Would Torch Affordability
Here’s a prediction I can make without crossing my fingers: lower mortgage rates would make housing in New Jersey less affordable, not more. And if you think the competition is fierce now… just wait.
Inventory is already painfully low and prices sky-high. If rates dropped even 1% tomorrow, thousands of buyers would flood back into the market — like opening every lane on the Turnpike and waving through 10,000 cars at once. That’s not smooth traffic… that’s gridlock.
Bidding wars are already happening. A rate drop would make them more common — and more cutthroat — plus buyers would have to give up even more concessions to win.
It’s the same supply-and-demand problem everywhere: make borrowing cheaper without adding supply, and prices climb, whether it’s homes, cars, or business loans.
Mid-5% Predictions? That’s Clickbait, Not Forecasting
It’s not impossible for rates to hit the mid-5s in the next year. But anyone suggesting it’s a guarantee isn’t working off credible data.
It’s not supported by bond trends, inflation numbers, or the Fed’s stated policy. It’s not analysis. It’s an empty headline.
Why do people say it anyway? Two reasons:
- They don’t understand what they’re talking about.
- They’re saying it for clicks and attention.
Either way, it’s noise — and if you’re making big financial decisions based on noise, you’re not planning, you’re gambling.
Rates Aren’t Magic — Someone Always Pays the Bill
The Fed is supposed to be independent. Period. It keeps rate decisions out of the hands of anyone whose main goal is winning votes.
Politicians think in months. The Fed thinks in decades. Sometimes that means keeping rates higher when everyone’s screaming for cuts, because long-term stability matters more than short-term applause.
And here’s the scary part: once politics comes to the party, it almost never leaves. No matter the political party, history shows they’ll all juice the economy if it makes them look good.
The Ugly Truth: Rates Don’t Fix Everything
Rates aren’t magic wands. They’re one piece in a giant, messy web that reacts to wars, jobs, spending, disasters, and even tweets. Change one element, and a dozen others move in ways you didn’t expect.
And there’s never a rate change where everyone wins. Lower rates can make your mortgage cheaper, while making the house itself more expensive. They can stimulate growth, while fueling inflation that eats your paycheck.
Some of the lowest rates in history came during some of the ugliest times in the economy. If you don’t understand why rates are low, you might be cheering for the wrong thing.
Bottom line: rates will rise and fall, and each shift creates winners and losers. The healthiest economy isn’t the one with the cheapest money — it’s the one where growth, inflation, and opportunity are in balance.
Or put bluntly, in this game, there are no free wins. Every time someone pops champagne, someone else is holding the bill. The smart move is knowing if you’re going to be the one paying it.
It’s time to cut through the noise and build a strategy that works in this reality, not an imagined one. Ready to turn uncertainty into opportunity? Let’s build your strategy together.