If you're thinking of refinancing your mortgage, get ready to jump.
"Now might be a good time to lock in at a lower mortgage rate," says Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.
Rates on 30-year mortgages have dropped nearly 1.5 percent since last May. Thirty-year mortgages are now averaging 7.07 percent and 15-year loans average 6.74 percent.
Those are the best rates since May 1999, according to the giant mortgage-financing company Freddie Mac.
Some think rates might go a bit lower, but this is a very hairy time in the financial markets. Reaser, who hails from the biggest bank in the country, doesn't think waiting is worth the risk.
That uncertainty means it's nail-chewing time for people wondering whether to lock into a mortgage.
Take Debbie and Karl Guyer. They've decided to roll the dice.
The Guyers bought a brand-new house in suburban St. Louis a year ago. They watched helplessly as rates crept higher while the contractor slowly built the house.
"It was a nightmare," said Debbie. They ended up paying 7.88 percent on a $150,000, 30-year mortgage.
Since then, she's been watching rates in the real estate section. Last week, she jumped.
On Jan. 3, they filled out the paperwork for a 15-year loan through the Bank of America. If they had locked in on that date, they would have snagged a 6.75 percent interest rate. But Debbie Guyer is holding out.
"I want to get 6.5 percent," she says.
Fed rate cuts can be a two-edged sword. They can help nudge mortgage rates down. But if the Fed cuts too much, the bond market starts looking ahead to a reviving economy and its inflation paranoia returns. Mortgage rates go up.