Mortgage rates are rising despite rate cuts last month

WASHINGTON (TNND) – If interest rates fall, so should mortgage rates. That's what many people expected after the Federal Reserve cut rates by 50 basis points last month, but it didn't happen.

The opposite is happening with price hikes.

The average 30-year fixed mortgage rate has jumped nearly 47 basis points to 6.62% since the Fed cut rates in September, according to data from Mortgage Daily News.

Experts say some of the reasons for this increase are that both 10-year yields and long-term rates have risen.

What's been going on recently, I think has more to do with the jobs report last week. Usually when the economy is strong, and it was a pretty strong jobs report, interest rates go up,” said Robert Van Order, professor of finance and economics at George Washington University.

Another factor is the recent jobs report, which shows a strong economy.

“When the economy is strong, there's a lot of borrowing and investment, and rates go up,” Van Order said.

Looking ahead, markets expect two more rate cuts this year; 25 basis points each. Whether that will lower mortgage rates remains to be seen.