3 questions homebuyers need the answers to now, post-Fed rate cut

Interest rate cuts have led to a series of important questions for homebuyers now. Nora Carol Photography/Getty Images

Interest rates are being cut again and mortgage interest rates are hovering near their lowest level in three years. So it would be understandable if homebuyers are ready to get off the sidelines and renew their home search.

But they shouldn't rush to do so, either.

Today's economic landscape is still an unpredictable one, with inflation and unemployment both rising in recent reports. And the Federal Reserve can and likely will adjust monetary policy and rates depending on what happens with both, perhaps as soon as their next meeting in October. Additionally, home values are high but dependent upon location, and high-rate debt balances are a growing concern. 

In this climate, then, homebuyers will need to be more prepared than usual. And that starts with contemplating specific questions (and answers) now, post-Fed rate cut. Below, we'll analyze three worth considering.

Start by seeing what mortgage rate you'd currently be eligible for here.

3 questions homebuyers need the answers to now, post-Fed rate cut

While the following three questions aren't the only ones homebuyers should consider now, they can better inform your next steps and help determine if now really is the right time to start house hunting:

What interest rate are you currently eligible for?

The average mortgage interest rate on a 30-year term fell last week to 6.13%, giving homebuyers reason for optimism. But is that the actual rate you're currently eligible for? You may actually qualify for one slightly closer to 6% if your credit score is high. On the other hand, if you have mediocre credit or a poor credit history, you may qualify for a rate significantly higher. 

Additionally, rates vary from lender to lender. Some rates that appear to be lower than average are lower for a reason (usually thanks to exorbitant fees tacked on elsewhere). So start by seeing what interest rate you're realistically, currently eligible for. That will go a long way toward determining your next steps (or lack thereof).

Compare current mortgage rates and lenders online to learn more.

How much lower would that be with alternatives?

Even if you do qualify for that 6.13% rate, it doesn't mean that you need to pursue it, as there are alternative ways to get an even lower rate. Mortgage points, in which a buyer pays a lender a fee to lock in a below-average rate, are one option worth exploring, especially if the math works in your favor. 

An adjustable-rate mortgage (ARM), meanwhile, could result in securing a lower rate, potentially in the 5% range, for a limited period of time. These rates will adjust over time (hence the name), but that timeframe will be multiple years long, allowing buyers to save money now while preparing a plan for a different rate climate in the future. Just take the time to carefully consider both to better understand where it may (or may not) fit into your current homebuying plans.

Is waiting for rates to fall further risky?

It wasn't that long ago when rates were also at a multiple-year low, giving homebuyers reason for cautious optimism. Last September, right before the Fed issued a larger-than-anticipated 50-basis-point rate cut, mortgage rates plunged to a two-year low. That left homebuyers in the same position they find themselves in now, wondering whether waiting for rates to fall further was a risky move. 

Recent history, however, implies that it could be. Mortgage rates actually rose after that decline, and they started 2025 over 7%, largely thanks to inactivity from the Fed and a stubborn inflation rate. And it's possible that that scenario could be replayed again now. Waiting for rates to fall further, then, will need to be measured against recent history and your current needs. For many, it may be worth taking action now, especially if their dream home is for sale, and then refinancing when rates stabilize in the future.

The bottom line

The mortgage rate climate is adapting again, this time in a favorable way for homebuyers. To take advantage of this window of opportunity, buyers should consider their financial goals, budget and real estate preferences closely and examine the answers to the above questions now, before getting started. It took a long time for mortgage rates to fall this low, after all, so it's important for buyers to take a strategic approach now that an opportunity is here again.