It is a misconception to assume that the when the fed cuts interest rates mortgage rates automatically drop.  Usually mortgage rates move in the opposite direction.  When the fed cuts the interest rates the loans that are affected by this cut are lines of credit, auto loans and credit card loans.  This cut can also affect adjustable rate mortgages tied to the libor rate and actually move the rate lower.  What affects mortgage rates are mortgage backed securities.   When the fed makes the interest rates tied to some investments (money markets, cd's, savings accounts) drop.  When these interest rates drop portfolios take a hit.  Have you taken a look at your IRA's lately??    The reason the fed is lowering short term interest rates (the interest rate banks charge for loaning money to each other) is to help prevent a recession.   Once this is under control, expect mortgage rates to rise.  They are going to have to raise rates to fight inflation.