Mortgage rates rising despite rate cut last month

WASHINGTON (TNND) — If interest rates go down, so should mortgage rates. That's what many people expected after the Federal Reserve lowered rates by 50 basis points last month, but that hasn't been the case.

The opposite has been happening with rates going up.

According to data from Mortgage News Daily, the average 30-year fixed mortgage rate has jumped about 47 basis points since the Fed rate cut in September to right around 6.62%.

Experts say a few reasons for this increase are because the 10-year yield, along with longer-term rates have both gone up.

What's happening recently, I think has more to do with the jobs report last week. Generally when the economy's strong, and it was a pretty strong job report, interest rates go up," said Robert Van Order, a professor of finance & economics at George Washington University.

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

"When the economy is strong there is a lot of borrowing and investing and that tends to get rates up," said Van Order.

Looking ahead, market expectations are for two more rate cuts this year; each 25 basis points. Whether that will lower mortgage rates is yet to be seen.