The surprise decision by the Federal Open Market Committee to cut the federal funds yesterday may reflect growing fears that the U.S. economy is weakening. Ironically, the concern may be good news for people hoping for lower mortgage rates.
 
While rates on fixed and adjustable-rate mortgage loans are not tied to the Fed rate, mortgage rates often dip when investors fearing an economic slowdown grow more conservative and buy up Treasuries and bonds. This causes long-term rates -- and by extension, mortgage rates -- to fall, creating an opportunity for lower mortgage rates.
With rates are at a 5-year low now is a good time to start shopping for a home. It's also a good time to refinance from an adjustable-rate mortgage to a fixed-rate.
Watch closely because the Real Estate market may just surprise us all in the next few months.