This could hinder the drop in mortgage rates, even if the Fed reduces interest rates soon.

Interest Rate Expectations: Long-term mortgage rates may not decrease as quickly as expected, even if the Federal Reserve cuts its benchmark rate in September.

Impact on Short-term Rates: A potential Fed rate cut could lead to lower short-term rates for adjustable-rate mortgages and home-equity lines of credit.

Connection to Treasury Yields: Long-term mortgage rates are more closely linked to the U.S. 10-year Treasury yield, which is anticipated to rise.

Wells Fargo Insights: The insights were provided by Wells Fargo Investment Institute, highlighting the differing impacts on various types of loans.