After the Fed cut interest rates, adjustable-rate mortgages may be 'an underappreciated opportunity,' top advisor says

Group 1 - The Federal Reserve's recent decision and potential interest rate cuts may lead to lower mortgage rates, providing relief for homebuyers [1] - The average rate for a 30-year fixed-rate mortgage is currently 6.3%, the lowest since October 2024, but still significantly higher than the under-3% levels at the pandemic's onset [2] - High mortgage rates, elevated home prices, and economic uncertainty have kept many potential buyers from entering the market [2] Group 2 - Adjustable-rate mortgages (ARMs) offer lower initial rates compared to fixed-rate loans, with the current ARM rate nearly one percentage point lower than the 30-year fixed rate [3] - The average interest rate for a 5/1 ARM is 5.66%, according to recent data from the Mortgage Bankers Association [3] - ARMs are considered an "underappreciated opportunity" by industry experts, suggesting potential advantages for borrowers [4]