mortgage rates are going in the opposite direction

On average, changes in the Fed Funds rate (FFR) (what the Fed controls) and the 10-year bond yield ((ticker TNX) are positively correlated, but they can become negatively correlated (FFR down and TNX up) if Fed rate cuts cause the market to think the Fed is being "too easy", which will result in higher inflation. Gold hit a high today on the news of the 50bp cut.

The Fed's benchmark rate is a very short term rate. It's really not supposed to affect long-term lending rates in a predictable way. Long term being anything over about five years, I'd say, based on the historic yield curve. A couple of citations in layperson's language to back this up:

For what it's worth, I just saw this article on CNN.com. They say "a drop in mortgage rates expected to follow [the Fed rate cut]":

--Bill

I think the issue (as pointed out in another post) was that people jumped to lock in low rates. Give it time- the 1.25% drop in rates will probably make it to consumers in about 2-6 months.

I am hoping to refinance as well, but am waiting to see 30 year fixed rates at less than 4.5%. Current mortgage is 5.75%.

I heard NPR remark on this yesterday. It changed over a half percent yesterday - low in the morning and high in the afternoon. Usually lenders only update once a day.

Plus it's a balancing act. That is, the Fed simultaneously is under pressure to undo the recent increases and raise rates to counter inflation. The recent reductions had this huge caveat in mind, from my reading. IIRC at least one of the Fed governors voted against at least one of the reductions because of concerns about inflation.

According to the Freddie PMMS, it hit 5.21% in mid Jun '03 with about 50bps in fees and/or points.

At that time, the ten-year treasury yield bottomed out at 3.10% on Jun 13. The 5-yr treas was at 2.02 that day.

By comparison, today, the 10yr is at 3.61 and the 5yr is at 2.78.

I wouldn't be holding my breath on the 30yr mortgage even hitting the low of Jun'03, no less plowing through it substantially to reach 4.5%.

OTOH, the PMMS of Jan 24 showed the 30yr fixed at 5.48 last week. The update to it for this week should come out any minute now (it's updated on Thursdays). However the survey itself is conducted around Monday - don't expect any reliable numbers based on todays' treasury rates (or reflecting yesterday's rate cut) until next week's numbers, not today's.