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

Fed cuts rates, mortgage rates climb. If you’re wondering how that math works, you’re not alone. In this week’s episode, Mike Mills untangles the real connection between the Fed, mortgage-backed securities, and why housing affordability in Texas still isn’t catching a break.

Episode Overview

The Fed rate cut reaction caught everyone off guard—rates went down at the central bank but up for homebuyers. In this episode, Mike Mills explains why mortgage rates often move opposite of Fed cuts, breaking down how mortgage-backed securities (MBS), tariffs, and investor sentiment actually drive the market. Realtors will learn how to communicate these changes clearly to clients, structure deals with buydowns and concessions, and anticipate what the next Fed meeting might bring. Mike also dives into Texas housing turnover trends, new Fannie Mae credit score updates, and how to automate your real estate database with AI tools to stay ahead in 2025’s unpredictable market.

🔑 Key Takeaways

1. Fed Cuts Don’t Equal Lower Mortgage Rates

The Fed rate cut reaction shows that mortgage rates follow the bond market, not the Fed’s overnight rate. When mortgage-backed securities fall in price, mortgage rates rise—even after a cut. Realtors should help clients understand this distinction to set realistic expectations and avoid confusion when rates move in the opposite direction of the headlines.

2. Tariffs and Inflation Are Keeping Rates Volatile

Trade tensions and tariff headlines are pushing Treasury yields higher, making mortgage-backed securities less attractive to investors. This inflation pressure keeps mortgage rate volatility high. Agents should prepare clients for short-term fluctuations and focus on long-term strategy over daily rate swings.

3. Texas Housing Market Is Frozen but Stable

Turnover is slowing, but home prices in Texas remain remarkably steady. This means less movement but not a crash. For Realtors, it’s all about pricing accurately from the start, using AI-powered market research to set expectations with sellers and target serious buyers who are ready to act.

4. New Fannie Mae Credit Score Rules Expand Access

As of November 16, 2025, Fannie Mae is removing the 620 minimum credit score for DU-approved loans. This expands opportunities for borrowers with lower scores—if their overall profile is strong. Realtors can leverage this update when helping clients who may have been previously sidelined by traditional credit score limits.

5. Your Database Is the Real Game-Changer

Social platforms can change the rules overnight, but your email list and CRM are assets you control. Mike shares a practical AI workflow for Realtors to organize, tag, and automate their contact database—turning passive leads into real conversations and long-term clients.

🔗 Resources Mentioned

Podcast Website → https://www.thetexasrealestateandfinancepodcast.com

Linktree (All Links + Resources) → https://linktr.ee/mikemillsmortgage

Referenced Data & Tools:

• Mortgage News Daily – Daily mortgage rate index and MBS updates →