Fed Rate Cut Reaction: Why Mortgage Rates Are Rising Instead of Falling

Mike Mills00:00:00

All right, so here's what's coming up on this week's Real Estate market update. For the week of November 10th, the Fed finally cuts rates and mortgage rates immediately go up.I'll explain why that happens, what Jerome Powell actually said this week, and why your payment might not be celebrating just yet. And then it's time for Mike's mind. Where robots are taking jobs, UFOs might be real, and somehow Coca Cola ran out of cash.And we'll wrap it up with an AI workflow that matters. How to actually build and automate your database so it works while you sleep. It's real estate finance and just enough chaos to keep it fun.So hit play and let's make sense of this madness together. Fed cuts rates, mortgage rates go up, and robots are taking over Amazon warehouses.Somewhere between Jerome Powell and Skynet, the economy officially entered its awkward phase.This is the Texas Real Estate and finance podcast, where we track the housing market, the money printer, and every plot twist that Wall street throws our way. It's part news, part therapy, and occasionally a masterclass in and economic confusion.I'm your host, Mike Mills, a North Texas mortgage banker with Service First Mortgage, AI powered and market obsessed, and here to help you make sense of it all before the next Fed headline drops. All right, so here's what's coming up on this week's Real Estate market update.For the week of November 10th, the Fed finally cuts rates and mortgage rates immediately go up. I'll explain why that happens, what Jerome Powell actually said this week, and why your payment might not be celebrating just yet.Then we're diving into buyer tips. What what credit scores really mean and how lenders actually read them.And why that 580 minimum credit score that you saw on Google might land you in manual underwriting purgatory. We'll dig into Texas housing data and talk about the great slowdown.Turnovers down, prices are holding, and what that means for buyers who are ready versus sellers who are just testing the market for agents. I'll show you how to own the relocation niche before everyone else figures it out. And for sellers, why concessions beat price cuts every single time.And then it's time for Mike's mind, where robots are taking jobs, UFOs might be real, and somehow Coca Cola ran out of cash and will wrapping up with an AI workflow that matters. How to actually build and automate your database so it works while you sleep. It's real estate finance and just enough chaos to keep it fun.So hit play and let's make sense of this madness together. However, before we dive in, I got a quick little reality check for you. This is not some big studio production or corporate marketing play.It's just me, a mic, and a mission to help make sense of this market one week at a time. And while I do love doing it, this podcast doesn't run on ad revenue. It runs on relationships. Mortgages are my day job.This podcast is how I connect with people who end up becoming clients and friends. So if this show gives you some value, help me keep it going. Subscribe, share it with a friend, Drop a quick review.It really does help more than you think. If you or someone you know are thinking about buying, selling, or refinancing, reach out. That's what funds this mission and keeps this mic turned on.Now, if anything in today's episodes get you thinking about how AI or mortgage strategy can help work for your business, drop me a message, my info's in the show notes, or just Google me. I'm really not that hard to find. All right, let's get rolling because this week's market feels like the sequel that nobody asked for.And we've got some serious plot twists to cover. All right, we're going to start off with my favorite question, and apparently everyone else's hey Mike, what are the rates?And honestly, I should start charging per inquiry because the answer swings more than my golf game does. Sometimes it's inflation, sometimes it's jobs, and right now it's a mix of Fed meetings and tariff tantrums.So according to the Mortgage News Daily index, as of November 10, 2025, the 30 year conventional rate sits at 6.34% on average, the 15 year conventional rate sits at about 5.84% on average, the 30 year FHA rate sits at about 6.06% on average, the 30 year VA rate sits at about 6.08% on average, and the 30 year jumbo sits at about 6.41% across the board. Just a disclaimer. These are market averages, not a quote. Your rate depends on your credit score, loan type and down payment.So talk to a licensed mortgage professional like me to find out your quote. And yes, that is fully CFPB approved. I think it does still exist, but these days, who knows?All right, so back on October 29, the Fed cut its fed funds rate by 0.25%. Mortgage rates, however, went up. But that's not that weird. It's annoying, yes. Unusual? Not really. You see, there are two things to remember here.Mortgage rates follow the price of Mortgage backed securities, not the fed funds rate. So when mortgage backed securities prices fall, mortgage rates rise. Simple as that. Secondly, markets trade the outlook, not the headline.So if traders think cuts will be fewer or slower, they'll demand higher yields today. And that pushes mortgage backed security prices down and mortgage rates up. So what did the Fed actually say?Well, at the October 29 meeting Powell did cut but warned that the next cut is not a foregone conclusion and stressed that the committee will go meeting by meeting based on data, which is something that they say pretty much every time.He also said that risks are now more balanced between inflation and jobs and that the policy moving forward is going to be neutral, which markets read as cautious and not a cut every meeting path. In Pal's words, a further reduction in the policy rate at the December meeting is not a foregone conclusion.We haven't made a decision about December. And that line alone cooled hopes for a fast cutting cycle.The Fed also said that it will keep letting agency mortgage backed securities run off and reinvest those pay downs into treasury bills.Translation one less big buyer of mortgage backed securities though less demand equals lower mortgage backed security prices which also equals higher mortgage rates at the margin. And after the announcement? Well lenders repriced for the worse.The daily indexes showed that the 30 year fixed popped back towards recent highs and moved higher again the following day. In fact Mortgage News Daily called it a surge right after the cut and noted that it was the fastest two day jump since the last cut day whipsaw.And now we've got a new character in our rate story. Tariffs. See treasury yields push higher on tariff headlines and a key Supreme Court hearing about presidential tariff powers.See tariffs are inflationary at the margin.So if markets price stickier inflation or slower disinflation, bond yields are going to rise and mortgage backed securities have to cheapen even more. And your net effect is mortgage rates go up while the Fed is trimming. So here's all this in plain English.The Fed cut the overnight rate mortgages price off mortgage backed securities which trade like longer term bonds. And if investors see fewer cuts ahead or more inflation risk then they're going to demand higher yields.So mortgage backed securities go down and mortgage rates then go up. So what about the next Fed meeting in December? Well according to Powell, no promises.Data dependent the risk to inflation and employment are in tension right now and some of the committee want to pause after 150 basis points of recent easing to see if labor softness is real. And that's his not A foregone conclusion and toward neutral language that you heard in the meeting.So in the short term my personal take on this is that rates are going to be a little volatile. The tariff noise plus fewer and farther parts cut, that can keep mortgage rates pretty choppy.Now if core inflation cools and growth decelerates, then spreads can tighten and rates can slip a little bit. If not, then we're just going to grind sideways.So today's ballpark rates are sitting in those low to mid sixes with good files and worse if your file's not quite so clean. And that lines completely up with all the daily trackers. So agents, when a buyer asks didn't the Fed cut and why is my quote higher?Now all you have to do is explain the mortgage backed security information. Then you can talk concessions and buy downs to win the payment war while we wait for spreads to calm down buyers.If the house is right, structure the deal, negotiate a buy down or credit and refi later. If the spreads improve and sellers rate spiking after a cut really confuses buyers. So price your home cleanly and advertise your concessions upfront.That could help lower the buyer's payment without slashing your list price.So just to wrap all this up in a tight little bow, the Fed moves the overnight rate, your mortgage moves with mortgage bonds, and lately those two don't like each other very much.That is your weekly dose of rate reality brought to you by lots of caffeine, even more confusion and and the fine folks at Mortgage Backed Securities Anonymous. So let's see what next week brings us.All right, let's move on to a quick buyer tip that you can share with your clients because this one really trips people up every week. So everybody's heard the you need a 580 credit score to buy a house line. Technically that is true in many cases for fha.But here's what's actually happening behind the scenes. Anything under 600 to 620 is not likely to get an automated approval.And then you become in manual underwriting territory, which means more paperwork, tighter rules and a slower process. What about conventional loans?Well, as of November 16, 2025, Fannie Mae is officially removing the 620 credit score minimum for loans run through desktop underwriter. And that means approvals now will depend entirely on du's overall risk assessment rather than a set score floor.So in practice most approvals will still cluster in the mid to upper 600s. But borrowers with lower scores could now qualify if the rest of the profile is strong Solid income, assets and payment history.Now, USDA is a hard 620, no exception. BA however, is the most flexible. Some lenders go down to 560 or even 550.But just like low FHA scores, that usually comes with extra hoops and overlays.And even if the credit score checks out, high debt ratios, low to no reserves, or relying on gift funds or down payment assistance programs can kill the deal. So the score gets you through the door, but it doesn't guarantee you're staying for dinner. And one last thing.What you or your buyer sees on Experian or free credit report.com is not their actual mortgage score. Different scales, different models. And mortgage scores are typically less forgiving.So before your clients start falling in love with homes that they find online or worse, rely on a Google search for minimum credit score to buy a house. Have them talk to a real lender who can pull their actual numbers and walk them through what's possible if they don't already have one.Well, I know a guy. All right, let's move to Texas housing because there is a quiet story playing out that doesn't get enough attention right now.You see, turnover has basically ground to a halt, but prices haven't really dropped. And that combination is shaping how you guide your buyers and sellers and your own business.So let's break down what's going on, what the numbers say, and what you should do about it. So, first off, what does turnover mean?Well, turnover refers to how many homes actually sell or go under contract relative, relative to how many are on the market. It's a measure of activity and flow in the market.And in August of 2025, which because of the government shutdown, was the most data, most recent data we have, the Texas Real Estate Research center reported an inventory turnover rate of 18.6%, meaning that just one in five homes on the market sold, and that is down from 22.2% just a year earlier. Historically, a more balanced market might see a turnover of around 30%.Now, nationally, studies are showing that only around 28 out of every 1,000 homes are changing hands this year, and that is a very low rate of turnover. So what this implies is that many sellers are staying put instead of listing.Buyers are waiting longer, and there's less musical chairs in the market. That means, in some cases, fewer choices for buyers in certain areas, but also fewer sellers than we would think in a market like this.So despite all of this slow turnover, prices are not collapsing. According to Zillow data, the average Texas home value is about $298,900 and that's only down 2.6% from last year. September of 2025.And according to track, the statewide median home price in June of 2025 reached $345,000 and that is up slightly from 340 in June of 2024. But the repeat sales home price index showed no year over year change in many cases.According to Redfin, In September of 2025, the median sale price was 339100 and that's down one and a half percent from last year. And only 10.7% of homes sold above list price compared to recent years. So in short, prices are holding rather than plunging. Why is this?Well, many sellers are lost mortgage rates and don't want to move. But demand remains because Texas still has population growth and job inflow. There's less inventory to churn, so fewer for sales or steep discounts.And many sellers that do are really more likely to price consciously rather than throwing up an inflated ask and cutting it later because they know the market is quieter right now. And one other signal, homes are staying on the market for longer.For example, the median days on market in July was 65 days statewide, corresponding to a turnover rate of 19.4%. So what does this data mean for buyers and sellers? Well, for buyers, there's opportunity.With fewer homes moving, you might have less competition, especially if you're ready to go now. But be careful because prices are being kind of sticky. Waiting for that big bargain may not yield as much as you hope.So the strategy in this case is be pre approved. Know your target market and be ready to act.Look for sellers who need to move and offer value rate buy downs, closing costs help and faster closing sellers. Your power lies in pricing smart from the start. With turnover low, you don't want to list your house too high and let it sit. Sitting erodes leverage.A price reduction later is far more damaging than listing correctly up front. Buyers may read a price drop as a big red flag, so focus on marketing and presentation. Because you're competing in a slower market.The question isn't will the market absorb this home as much as how quickly and at what price can we move without losing ground and agents? Well, your role is extremely critical. Bring the data to your clients, buyers and sellers. Show them the angle.Turnover's low, prices are holding, the market is quieter, so decisions must be sharper.And use tools like AI chat, GPT for instance, alongside your MLS and local data to dive deep into neighborhood turnover days on market comparable price trends and active inventory for sellers. Run comps, show the days on market by the zip code, show historical turnover. Tell the story. If we price too high, we risk sitting in losing leverage.And for your buyers, show what true listing activity looks like, which homes are moving, what concessions are appearing, and how to position and offer in this environment. So here's your takeaway for this week.The market is not just booming like the pandemic here's it's not crashing either though, it's just kind of holding steady. In historical terms, turnovers down and prices are holding.And that means fewer moves and more careful decisions and a premium on timing, pricing strategy. So whether you're buying, selling or representing clients bring clarity, bring facts and bring readiness.The market can shift and often when it does, it is sudden. So do your research, communicate with your database regularly and stay ready because things move fast. All right, onto our agent Tip of the week.So here is a play that every Realtor should be thinking about right now. Especially with all the noise coming out of places like New York after the recent election.Now, whether that migration wave is real or just Twitter drama, it's a perfect excuse to position yourself as a relocation specialist. Don't waste time arguing politics online. Instead, create content that answers the questions that people are actually googling.Like what's it like to live in Texas? Where should I move? Near Dallas or Austin? Or which suburbs have the best schools and restaurants? Make short videos showing off your community.Walk downtown. Visit local businesses, talk to restaurant owners, highlight school districts. You're doing two things at once.You're building trust with potential out of state buyers and deepening relationships with people in your own backyard. That is what niche mastery looks like. Look, your sphere is still going to buy from you, but when the market slows, you got to cast a wider net.And owning a niche like relocation gives you reach relevance and repeat visibility because people always search before they move. And oh by the way, networking with other agents in other states is not a bad move either.So stay hyper local, go on camera and make your market famous. That is how you build authority and outlast the slowdown. Next up, welcome back. Inside Mike's Mind.You know, the place where economic data, conspiracy headlines and other substances collide at unsafe speeds. So let's start with the good news.Texas just officially took New York's lunch money because right now finance and insurance jobs are bailing on Wall street faster than interns at 5pm Texas has added close to a hundred thousand of them since 2020. New York barely A fraction. Turns out they can't keep charging 22 bucks for salad and expect the finance bros to stay loyal.They also want low taxes, cheaper housing and barbecue. That doesn't come with a side attitude.Speaking of Texas politics, voters just passed a constitutional amendment saying parents are the primary decision makers for their kids. Which honestly kind of feels like something that should have been true already, but apparently we needed to make it official somewhere.A lawyer's draft in the first My Kid, My rules bumper sticker as we speak. Meanwhile, Amazon swapping out humans for robots again.Analysts say automation could save them $4 billion a year, which is great for shareholders and terrible for the guy scanning boxes in Dallas.Amazon's already laid off thousands of workers this year and apparently the robots don't need bathroom breaks, lunch breaks or health insurance, though they will unionize eventually. Once ChatGPT explains collective bargaining to everyone while robots are taking jobs, humans cannot afford homes.The median age of the first time homebuyer just hit 40. Yes, 4, 0. That's up from 29 in 1981, back when interest rates were 17%. But at least you could still buy a house with one income and a mullet.Right now only 21% of sales are first time home buyers. That is the lowest ever.Repeat buyers are at 62% in many cases putting at least 23% down on their upgraded homes and probably paying cash from the equity in the home that they bought when their phones still had courts. So the whole housing market is basically frozen. Only 28 out of every thousand homes has sold this year. That's a 2.8% turnover.That is the lowest we've had in 30 years. 70% of homeowners are sitting on mortgages below 5% and they refusing to sell in these 6% rates.So the few people who are moving, they either got divorced, relocated, or found out that their HOA doesn't allow political signs in their yard. While we're talking frozen, the US government borrowed $600 billion so far during the government shutdown, which thankfully just ended today.That's $19 billion a day. Meanwhile, more than 3 million airline passengers have faced delays because, you know, half the air traffic control staff was working without pay.Thank goodness.Right now it looks like this isn't going to drag into Thanksgiving because 10 million travelers could have been stuck on the tarmac eating pretzels and wondering if this was what Rome felt like at point this at the end. And it's not just government debt that's upside down. Coca Cola. Yes, that Coca Cola posted negative free cash flow for the first time this century.Apparently even sugar water can't outrun inflation. If you think insurance is going to save you, well, think again.Auto Premiums are up 66%, blood insurance is up 41%, home insurance is up 81%, and property tax are up 24. Yet insurance companies are posting record profits. So basically, you're paying more for the privilege of being less protected.Now, while your wallet's bleeding, Wall Street's arguing over how to lower mortgage rates. Some folks, in fact, want Fannie Mae and Freddie Mac to start buying more of their mortgage bonds again. Basically will save yourselves plan.Others call it a conflict of interest because it's the financial equivalent of grading your own homework.But either way, young buyers could use any break they can get because affordability's now a myth, right up there with affordable daycare and calm Twitter threads. Back home here in Texas, politics got spicy again when casino money flooded a special Senate race in Tarrant County.The billionaire owner of the Maver throwing millions behind the pro gambling candidate. In fact, his opponent's calling him the wholly owned subsidiary of Sands, which honestly sounds like a tagline for a 90s boy band.Either way, Texans might finally get casinos just in time to lose all the money that they saved moving here from California. And in other mind bending news, scientists say they can now reverse aging using AI. They're literally turning back human cells by 30 years.So if this works, I might finally get my hairline back. Though given my stress levels, the AI would probably just quit halfway through anyway. But seriously, imagine the real estate implications.Your clients could live to 150 years old. I hope your CRM can handle up the follow ups for that long.Speaking of eternal life, crypto investors might need it because the market just recently lost $700 billion of value in one week. Apparently the same algorithms that told them to buy the dip didn't mention that the dip might be bottomless.Heck, even Trump jumped in saying that he ended the, quote, war on crypto and he wants America to be the Bitcoin superpower. It's kind of like promising to rebuild Blockbuster as a streaming company Snowball. But it might be 15 years too late.Meanwhile, yields on treasury bonds jumped again after the Supreme Court's latest tariff ruling, which the president called life or death. It's always comforting when your retirement account depends on nine lawyers interpreting trade policy like it's the Book of Revelation.While we're on the end times, let's talk about my favorite interstellar object again. Mr. 3i Atlas so apparently this quote comet is flying through our solar system with a hyperbolic orbit. Weird chemistry.And maybe, maybe it's artificial.Right now NASA's being really quiet because they got no new images and there are lots of people out there starting to think that this is some sort of alien mothership. Silly but true.Which means if aliens do show up next month, they're gonna have a front row seat to the tariff battle, negative cash flows and crypto meltdowns. Welcome to Earth, guys. Hope you brought popcorn.Oh, and just in case space wasn't weird enough, archaeologists just found the world's oldest mummies in South Africa. They predate the Egyptians by 2000 years. So congratulations humanity.We've been preserving dead people longer than we've been solving housing affordability. Go back to planet Texas.We got finance jobs flooding in, parental rights amendments passing casino cash buying elections, and apparently a secret anti aging serum coming soon. All the while the rest of the country's freezing broke and looking for UFOs. Things are totally fine, totally normal week.And I'll just leave you with this. Texas keeps adding finance jobs, Amazon keeps adding robots, and AI makes us immortal.Who's going to be left to actually buy the homes that we're all still sitting on? Probably the robots and knowing my luck, will have better credit scores than I do. Well, that's Mike's brain dump for the week.If things keep going like this, I'm buying gold, bottled water, and maybe a robot that can help host this show for me. Anyway, we'll see what next week holds. All right, moving on to our seller tip this week.So here's a move that most people aren't talking about enough. Because it's smarter than slashing your price. See, when buyers start getting picky and inventory creeps up, the first instinct is to drop the price.If your house has been sitting too long, that could be a mistake. Unless your home is priced wrong. You see, price cuts are like blood in the water. Buyers smell it and suddenly everyone's coming in low.So instead, try this. Update your listing to advertise seller concessions.That cash can go towards covering closing costs or better yet, buying down the buyer's interest rate. You see, that is real money that helps your buyer today, not a small monthly savings over 30 years. Think of it this way.A ten thousand dollar price cut might only save the buyer about 65 bucks a month on their payment. But ten thousand dollars in concessions could buy down their rate and cover most, if not all of their upfront costs. That's immediate relief.And you get to keep your home's value intact. Just so you know, here the concession caps FHA allows up to 6% of the purchase price and concessions VA up to 4%.Conventional, however, is tiered 3% if they're putting down less than 10% on the home, 6% if they're putting down between 10 and 25% on the home, and 9% anything above that. So before you reach for that price reduction, talk to your agent about flipping the script. Offer value instead of discounts.Cleaner, smarter and helps keep your neighborhood comp strong. All right, let's move on to our main story today.So if you're an agent and you are not treating your contact database as your most powerful marketing tool, you are missing the story. Here's why Social media platforms own your followers. You don't, but you always own your email list and your contact database.So this week we're talking about how to build, automate and use your database with AI tools. So it becomes your leverage in any market. So first off, why does your database matter? Well, your database is more than just names and phone numbers.It's your long term asset. One article that I read recently put it very bluntly.A well maintained real estate database is the most important asset that you're ever going to build. Why? Because you control it. Social media platforms can deprioritize your content or even shut you down altogether. An email list is yours.You see, your email list is your database of past, present and potential clients. You own your email list, not your social media followers.So recently an agent article noted that email marketing yields much better results than social media. For example, click throughs of three and a half percent for email versus 0.07% on Facebook. And tracking email metrics is key.Open rates of 35 to 40% are considered strong in real estate email market. So bottom line is if you don't build the database, you are building your business on sand.Now how do you create a good workflow to build your data database? Well, step one is gather up your contacts.So these are going to include things like your phone contacts, school directories, open house visitors, and any lead magnets that you use to drive online leads. Step 2 Organize these contacts in a proper CRM database, not just an Excel spreadsheet.Tag each contact buyer, seller, relocation out of state, other referral sources and this will let you segment your database later on for targeted emails. Step number three Automate and use AI.Use tools that are going to automatically import new leads from your website or your social ads into your database.Use AI to verify and enrich contact information, email phone number and addresses and then trigger drip campaigns, welcome emails, market updates, quarterly check ins to each of those contacts once they're entered.Step number four Create content for your database and use AI because right now it can generate monthly newsletters, market updates, neighborhood features, relocation tips, it can pull relevant posts and videos and convert that into email copy in your voice. And it can schedule emails automatically like the second Tuesday of every month. And the fifth and final step is maintenance.Update your contacts, remove duplicates and ensure compliance. Monitor your metrics, open rate, click through and other key numbers to refine and clean up your database.So here's just a few examples of how you can market to your database.You can send a monthly Inside Texas market so in your email it's going to have a short video plus a 300 word summary that links to a blog or YouTube and a call of action like if you're thinking of relocating, let's chat. You can also do a quarterly email so top five relocation moves from outside Texas.And in the email you'll use AI to pull data on which states are sending the most new people to Texas. So you can tailor this for out of state buyers in your database.Another one that's obvious is anniversary and birthday emails, but you can put a local business feature twist on it so you can say Happy Anniversary in your new home. You here's a local coffee shop that you'll love in your neighborhood. Not only does this build goodwill, but it also promotes local businesses.You can also do exclusive pre market listings to your email database because you're going to give your clients a first look at upcoming listings before they launch publicly. So you're giving value back in creating a secret little community. And lastly you can also do a survey email.Just send it out to everybody and say hey, what's your next big move? Are you relocating? Are you upgrading? Are you downsizing what's happening in your world right now?And use those responses to segment and target clients for future emails. So here's a simple workflow to follow every single week. On Monday, import new leads from last week, tag and segment them.On Tuesday, use AI tool like ChatGPT or other real estate specific tool to generate your newsletter content. On Wednesday, review your CRM automation sequences, update your triggers and send check ins out to everybody.Then on Thursday send your scheduled newsletter and email, track your metrics like your open rate and your call to actions and make note of what performed. Then on Friday dive in there, clean up your database a little bit remove your invalid emails, update your phone numbers and plan next week's topic.And then once a quarter, run a database audit so you can identify high value contacts, invite them to like a VIP event or call just to check in. See, your database isn't waiting. It's probably already there. Your phone, your email, contacts, past clients.The question is, are you treating it like your business's lifeline or ignoring it? Build it up, automate it with AI thin value driven content and you'll own the relationship, not the algorithms. Well guys, that is a wrap for today.We hit just about everything this week from the Fed.Cutting rates while mortgage rates climbed, credit scores frozen, yet expensive Texas market relocation niches, seller concessions, smarter databases and even a few robots and UFO for flavor. So if you made it this far, congrats. You officially know more about the Fed robots and housing turnover than most cable pundits.Remember, none of us have a crystal ball. We're just trying to make smart moves while the market throws curveballs. So keep learning, keep adapting, and try to laugh a little while you do it.Till next time, be good humans and just keep grinding. Because life is what you make it, so make it great. See you later.