Why the Fed's rate-cut decision won't reduce mortgage rates

Later today, we'll get a sense of where mortgage interest rates are right now from the Mortgage Bankers' Association. And, of course, we'll learn whether Fed policymakers cut interest rates and by how much.

So what could a rate cut mean for mortgages and homebuying affordability?

There are a lot of factors that go into mortgage interest rates, according to Jessica Lautz, vice president of research at the National Association of Realtors.

Yes, Federal Reserve policy is one part. But also, "it's really looking at the market. It's looking at supply and demand for mortgages," she said.

Also, the 10-year Treasury yield. Also, inflation. You get the idea.

So if the Fed cuts interest rates by, say, a quarter of a percentage point, Lautz said mortgage interest rates probably won't immediately decrease by the exact same amount, because they've already come down.

"We actually already know, because there's been so much fodder about a potential rate cut over the course of the last week or so, that the mortgage market is actually already starting to respond, and so we are seeing that the 30-year fixed-mortgage interest rate has actually declined to the lowest rate in nearly a year," said Lautz.

"At this point, where mortgage rates will go from here really depends on what Chair Powell will say at the press conference," said Kenny Lee, senior economist at Zillow and StreetEasy.

As the market tries to divine how far the Fed will go in cutting rates, "that will likely filter into the mortgage rate and the trajectory of the mortgage rate throughout this year as well, which have been quite tough to predict," he said.

Given that uncertainty, Holden Lewis with the personal finance website NerdWallet has some advice for prospective homebuyers trying to decide if they can afford to get into the market.

Let's say you need a $400,000 mortgage. "The difference between 6.5% and 6% is $130 a month. And for a lot of people, just that $130 a month difference really is the dividing line between not being able to afford a home and being able to afford a home," he said.

But remember: The cost of the house itself is a big part of that calculation. And home prices vary greatly depending on where in the country you're buying. They're up in Boise, Idaho, New York, and Chicago, for example.

Meanwhile, "home prices in some markets — especially in Texas and Florida — have actually been falling in the last year," NerdWallet's Holden Lewis pointed out.

Lewis also reminds homebuyers to factor in other monthly costs when assessing affordability, like home insurance premiums, which have been rising significantly.