Markus Andrews

The word “Netflix” shines brightly at the presentation of the new season (3) of the Netflix series “Bridgerton” in the Flora. 
Rolf Vennenbernd | Picture Alliance | Getty Images

As the earnings reporting season draws to a close, many companies were able to deliver solid results despite pressures on consumer spending.
Investors seeking stocks that can withstand short-term pressures and deliver over the long term should track the recommendations of top Wall Street analysts.

Bearing that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Take-Two Interactive Software
This week’s first pick is game developer Take-Two Interactive Software (TTWO). In August, the company reported better-than-expected adjusted earnings for the first quarter of fiscal 2025.  
Recently, Baird analyst Colin Sebastian reiterated a buy rating on Take-Two Interactive stock with a price target of $172. The analyst is upbeat about the company’s upcoming releases and expects its bookings to increase by at least 40% in the next fiscal year following mid-single-digit growth this year.
Sebastian’s robust bookings growth estimate is backed by the expected release of key titles – Civilization VII, Borderlands 4 and the much-anticipated Grand Theft Auto VI (GTA VI). Moreover, he expects the company’s new console/PC releases to deliver about $2.25 billion in incremental bookings. He anticipates the mobile business will contribute around $3.1 billion, and catalog/live services will generate $2.5 billion in the full year.
While management has expressed high confidence in its ability to release GTA VI next year, the analyst thinks that any potential delay between two fiscal years would have a limited impact on TTWO’s two-year earnings path. He expects this vital release to generate about $3 billion of bookings in the first year, while enhancing the company’s financial flexibility with over $2 billion in free cash flow.

“Beyond the next 12-24 months, Take Two should benefit from the long-tail of live services/catalog sales and further depth in the pipeline with sequels to Red Dead, BioShock and Max Payne, and perhaps new 2K sports franchises,” said Sebastian.
Sebastian ranks No. 286 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 56% of the time, delivering an average return of 12.8%. (See TTWO Ownership Structure on TipRanks) 
Costco Wholesale
Baird analyst Peter Benedict is bullish on the prospects of membership-only warehouse chain Costco Wholesale (COST). Earlier this month, Costco reported a 7.1% rise in its net sales for the retail month of August (the four weeks ended Sept. 1).
Excluding the impact of changes on gasoline prices and foreign exchange, Costco’s August comparable sales also grew 7.1%. Benedict noted that the August comparable sales growth was sequentially steady compared to the 7.2% increase in July, as stronger traffic was offset by some moderation in average traffic growth.
Benedict increased his Q4 fiscal 2024 EPS estimate to $5.10 compared to the Street’s consensus estimate of $5.07 per share to reflect better-than-expected sales in the fiscal quarter. “COST’s traction with consumers continues to stand out against an increasingly challenged spending backdrop,” said the analyst.
Benedict highlighted that the company delivered solid core comparable sales growth yet again and displayed persistent strength in the non-foods area, even as there is continued softness in discretionary categories across most of the retail sector.
The analyst thinks that Costco’s “growth staple” appeal remains intact, thanks to its consistent performance, store network expansion, encouraging membership key performance indicators and the recently announced fee hike. He reiterated a buy rating on COST stock with a price target of $975.
Benedict ranks No. 30 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 71% of the time, delivering an average return of 16.1%. (See COST Options Trading on TipRanks) 
Netflix
Streaming giant Netflix (NFLX) is the third pick for this week. Despite macro pressures and intense competition in the streaming space, the company has been able to impress investors with its crackdown on password sharing and the rollout of an ad-supported tier.
JPMorgan analyst Doug Anmuth contends that while “advertising is not in NFLX’s DNA” and the company is creating the ad tier from scratch, it has the ability to emerge as a major ad player as scale and monetization grow in 2025 and beyond. He estimates that ad revenue, excluding the subscriptions component, will account for more than 10% of the company’s revenue in 2027.
The analyst acknowledges that the scale of Netflix’s ad tier currently lags behind that of peers like Amazon, which gained from automatically including its Prime members in its ad-supported tier. That said, he is confident that Netflix can boost its scale by making changes in plans and pricing, bundling offers and providing live content that has extensive appeal.
Anmuth further explained that while Netflix’s ad tier is dilutive to its overall average revenue per member, the impressive 150% growth in the company’s upfront ad sales commitments, greater scale and improved focus on ad formats and ad tech should drive higher monetization.
Overall, Anmuth is optimistic about Netflix’s ability to grow its top line in the mid-teens this year and in 2025, further improve its margins, and deliver multi-year free cash flow growth. He reaffirmed a buy rating on NFLX stock with a price target of $750.
Anmuth ranks No. 99 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 17.7%. (See NFLX Financials on TipRanks)  More

Mari Pepin, a previous contestant from ABC’s “The Bachelor” franchise, opens up about the financial side of reality TV stardom.
With or without finding a happily ever after, dating show contestants often find opportunities as influencers once they have built a fan base.
Influencers can make between $2,500 and $5,000 per month, according to a 2023 NeoReach survey.

Mari Pepin and Kenny Braasch got engaged on season 7 of “Bachelor in Paradise” and married in 2023.
Photo: Dolce Amor Co.

Theoretically, contestants on ABC’s “The Bachelor” are looking for love. What they often find are business opportunities.
Mari Pepin, 28, got both.

Pepin was a participant on “The Bachelor” season 25, which aired in 2021, and then returned for “Bachelor in Paradise” season 7 later that year. She went home with Kenny Braasch’s final rose — they’ve now been married for more than a year — and an Instagram base of more than 300,000 followers, up from 50,000 before her reality TV appearances.
That’s when the money started to come in.
After “Bachelor in Paradise” aired and her following jumped, influencer opportunities followed. “Instantly, we were getting huge deals,” she said.
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In most cases, companies send Pepin products, which she then tries at her home in Chicago. If she likes an item, she’ll post about it, hitting the company’s suggested talking points and then earning a fee, she said.

Pepin has worked with Loreal, Factor meal delivery, Ruffino wine and Mermaid hair products, among others. On some account promotions, Pepin and Braasch team up. Braasch also has partnerships, including Apothic wine and gambling site BetUS, which connected Pepin with CNBC.

Mariela Pepin, who goes by Mari, was a contestant on “The Bachelor” season 25 and then “Bachelor in Paradise” season 7.
Photo: Dolce Amor Co.

Brands giving products to celebrities and influencers in return for promotions on their social media feeds is a common marketing strategy, according to a new report from Influencer Marketing Hub.
Alternatively, the businesses will sign deals with influencers to promote the product in their posts for a fee or a share of affiliate revenue, similar to a commission for each sale. The posts alone help drive sales, the survey of more than 3,000 marketing agencies, brands and professionals found.
For the companies, it’s an approach that has proved effective when it comes to building a brand, according to the report.

Influencers ‘can make bank’

For many reality television stars, influencing has become a popular side hustle with a low barrier to entry.
Depending on the platform and follower count, along with other factors, content creators can make between $2,500 and $5,000 per month, a 2023 NeoReach survey of more than 2,000 full- and part-time creators found.
Although Pepin earned more than $50,000 last year through influencing and has made as much as $12,500 for a single post, according to records reviewed by CNBC, the number of prospects, and payout, can vary greatly.
“That inconsistency is really scary for me,” she said.

“The larger the following, the more they can make bank,” said Casey Lewis, a social media trend expert and founder of trend newsletter After School. “If they really juice the affiliate, they can make a ton of money.”
In some cases, that can be enough for a supplemental income stream, but few earn a living wage. Most full- and part-time creators earn an annual income of $15,000 or less, according to NeoReach’s survey.
Still, 57% of Gen Zers said they would like to become an influencer if given the chance, according to a 2023 report from Morning Consult. The report was based on a poll of more than 2,200 adults and a separate survey of 1,000 Gen Zers ages 13-26 who use various social media platforms.
“A lot of people aspire to be influencers because they want to be self-employed and to be recognized for their taste and to be someone,” Lewis said.
However, “there’s awareness that it’s not that easy,” she added. “Monetizing your life in that way is exhausting.”

Nearly half of young adults have a side gig

These days, having any sort of side hustle can provide a much-needed income boost to help keep up with a higher cost of living.
As of 2024, 36% of U.S. adults have a second job and make an average of $891 per month in extra cash from that role, up from $810 in 2023, according to a June report by Bankrate that polled more than 2,300 U.S. adults. Among Gen Zers and millennials, the share of adults with a side gig jumps to nearly 50%.

Pepin has a full-time day job as a social media marketing manager. “The influencer stuff is just kind of extra. It’s not really reliable,” she said.
For now, though, Pepin is making the most of her reality TV fame as one half of a successful “Bachelor” couple.
“I think you have to strike while the iron is hot,” Pepin said.
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House lawmakers have reached the number of signatures they need to prompt a vote on a bill that would eliminate certain rules that reduce Social Security benefits for pensioners.
The Social Security Fairness Act would repeal rules known as the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO.
The bipartisan bill has wide support in both the House and the Senate.

Cavan Images | Cavan | Getty Images

House lawmakers in Washington have the signatures they need to force a vote on a bill to eliminate rules that reduce Social Security benefits for certain retirees who also receive pension income.
On Thursday morning, Reps. Abigail Spanberger, D-Va., and Garret Graves, R-La., marked the 206 signatures a discharge petition had thus far collected with a press conference outside the Capitol building alongside organizations representing police, firefighters, postal workers, teachers and other government employees often affected by those rules.

By Thursday afternoon, the number of signatures had climbed to 218, enough to force a vote on the bill.
The bipartisan bill — the Social Security Fairness Act — would repeal rules known as the Windfall Elimination Provision, or WEP, and the Government Pension Offset, or GPO, that currently reduce Social Security benefits for almost 3 million Americans.
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“We have taken on, on a bipartisan basis, something that’s just completely unjust, that has been going on for over four decades,” Graves said.
“This is a situation where you have some of the most important occupations, some of the most important contributors to our community, that are being discriminated against,” he said.

How WEP, GPO rules affect retirement decisions

The Windfall Elimination Provision reduces Social Security benefits for individuals who receive pension income from public roles that did not contribute Social Security payroll taxes — but who also paid into the program and qualified for benefits through other work. The WEP affects about 2 million Social Security beneficiaries.
The Government Pension Offset, meanwhile, reduces spousal benefits for federal, state or local government employees who did not contribute to Social Security payroll taxes. The GPO affects almost 800,000 retirees.
The rules can force affected workers to make tough retirement decisions.
That includes Lois Carson, president of the Ohio Association of Public School Employees, who said during Thursday’s press conference that the rules affected the decisions she made to support her family after her husband passed away. While Carson was able to receive income from his pension, she was not able to access Social Security survivor benefits, as she and her husband both worked as public employees.
“I continue to work after 37 years, because if I retire, I’m going to lose half of my funding because of this law,” Carson said.
Carson said a friend lost the $1,200 monthly Social Security benefit checks she received on her husband’s record after she retired from her job as a public school employee.

Bill faces uncertainties despite bipartisan momentum

The bill to repeal the WEP and GPO rules is the “most bipartisan and co-sponsored bill in the United States Congress,” Rep. Greg Landsman, D-Ohio, said Thursday.
The House version of the bill currently has 327 co-sponsors.
If the bill is put up for a vote in the House, it may pass, experts say.
Then it would go to the Senate, where the bill has 62 co-sponsors.
Time constraints may limit the effort’s progress, Emerson Sprick, associate director for the Bipartisan Policy Center’s economic policy program, recently told CNBC.com.
“Both the Senate and the House have a lot of work to do before the end of the year,” Sprick said.

While experts agree the WEP and GPO rules could be adjusted to be fairer, some say eliminating them altogether may not be the answer.
The Congressional Budget Office has estimated the move would cost around $196 billion over 10 years. Social Security already faces a trust fund shortfall, with the program’s combined funds projected to run out in 2035, when 83% of benefits will be payable.
Others have voiced concerns that repealing the rules would result more a more generous income replacement formula for workers with combined public and private work compared with others who contribute to Social Security for their entire careers.
“To the extent that people have worked both in covered and non-covered employment, in general they should be receiving some Social Security benefit,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities.
“The question is how much,” he said. More

The Federal Reserve just slashed interest rates by a half percentage point.
That may open up some refinancing opportunities for borrowers, depending on the type loan.
From mortgage refis to credit cards, auto loans and student debt, financial pros break down what you need to know.

Moyo Studio | E+ | Getty Images

The Federal Reserve announced a half percentage point, or 50 basis points, interest rate cut at the end of its two-day meeting Wednesday. And, naturally, some Americans will want to make the most of the central bank’s first rate cut since the early days of the Covid pandemic.
“How quickly the impact of lower rates is felt depends on whether households have variable or fixed financing rates” said Stephen Foerster, professor of finance at Ivey Business School in London, Ontario, Canada. Some adjust fairly quickly, others don’t reset at all.

That is, unless you can refinance.
According to a recent report from Nerdwallet, 18% of consumers said they planned to refinance a loan once rates go down. The financial services site polled more than 2,000 U.S. adults in July.
While taking advantage of lower rates could make financial sense, there are often other considerations, as well, depending on the type of loan, experts say.  
More from Personal Finance:Here’s what the Fed rate cut means for your walletThe ‘vibecession’ is ending as the economy nails a soft landingMore Americans are struggling even as inflation cools

No ‘universal rule’ for refinancing a mortgage

For starters, while mortgage rates are partly influenced by the Fed’s policy, they are also tied to Treasury yields and the economy. So, home loan rates may continue to fluctuate.

Further, most homeowners still have a lower rate on their loan than what they could likely get if they were to refinance now — with the exception of those who bought a house within the last two or three years, according to Jacob Channel, senior economic analyst at LendingTree. 
Roughly, 82% of homeowners are locked in at rates below 5%, and 62% have rates under 4%, a 2023 Redfin analysis found.

“There isn’t a universal rule for when people should think about refinancing a mortgage,” Channel said. “Some people will tell you that you shouldn’t think about refinancing until you could get a rate that’s at least 50 basis points lower than what you currently have, others will say that you should wait until you could get a rate that’s 100 or more basis points lower.”
Other factors to consider are your creditworthiness, which will ultimately determine what rate you can qualify for, as well as the closing costs, which typically run 2% to 6% of your loan amount to refinance, according to LendingTree.
“There’s no one-size-fits-all answer to the question of whether or not somebody should refinance their mortgage,” Channel said.

Don’t wait to reassess credit card debt

When it comes to credit card debt, the math is a little more cut and dried.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — nearing an all-time high. Those APRs will edge lower now, but not significantly.
No matter what the Fed does, refinancing high-interest credit card debt is a good move, according to Matt Schulz, chief credit analyst at LendingTree.
“A 0% balance transfer card is likely your best choice, assuming you have good enough credit to get one,” he said. “A low-interest personal loan can be a good tool, as well.”

Alternatively, borrowers can call their card issuer and ask for a lower interest rate on their current card. The average reduction is about 6 percentage points, one LendingTree survey found. “That’s like going from 25% to 19% and is way, way more impactful than anything the Fed’s going to do,” Schulz said.

Auto loan refi options depend on equity

Although auto loans are fixed, the rates on new-car loans will come down with the Fed’s moves.
But for those with existing auto loan debt, refinancing is not a given.
“An auto loan’s interest is weighted more towards the beginning of the loan; therefore, if you’ve had the loan for a year or two, you’ve already paid quite a bit in interest,” said Ivan Drury, Edmunds’ director of insights. “Even though lowering your rate makes the monthly payment less, it could result in paying more interest over the life of the loan.”
In addition, “if you were paying mostly interest, you might not have enough equity — or any — to really leverage the lower rates,” he said, unless you put more cash toward refinancing and take out a smaller loan.
Consumers may benefit more from improving their credit scores, which could pave the way to substantially better loan terms, he said.

Refinancing student debt can come with risks

Eventually, student loan borrowers with variable-rate private loans may have reasons to consider refinancing as rates come down.
“Borrowers can choose to refinance their loans to take advantage of lower prevailing interest rates or improvements in their credit scores, which can also lead to lower interest rates, or if they want to switch lenders,” said higher education expert Mark Kantrowitz.
However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options, according to Kantrowitz. 
And like other types of refinancing opportunities, extending the term of the loan means you ultimately will pay more interest on the balance.
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Traders work on the floor of the New York Stock Exchange on September 18, 2024 in New York City. 
Stephanie Keith | Getty Images

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Here’s what CNBC TV’s producers were watching as the Federal Reserve slashed rates by a half point on Wednesday and what’s on the radar for the next session.

Existing home sales due Thursday at 10 a.m. ET

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Beazer Homes’ performance in the past month

Morning restaurant reports

Cracker Barrel and Darden Restaurants will release earnings before the bell.
Cracker Barrel is down more than 3% from three months ago. The stock is up about 6% week to date, but it’s 49% from the late December high.
Darden Restaurants is up roughly 5% in the past three months. Darden runs restaurant brands like Olive Garden, Longhorn Steakhouse, Ruth’s Chris and Bahama Breeze. The stock is 9.5% from the March high. 

Afternoon reports

FedEx reports after the bell. The stock is up 20% in the past three months. It stands 5% from the July 16 high.
Lennar also reports after the bell. The stock is up 26% from three months ago. It hit a new 52-week high Wednesday. It is up more than 5% in a week.

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FedEx shares in the past three months

Rate cuts and banks

CNBC TV’s Leslie Picker will report on the banking sector’s reaction to the Federal Reserve’s half-point interest rate cut.
All the big banks are down in September: JPMorgan is off by more than 7%. The stock is 7.5% from the August 30 high.
Goldman Sachs is down about 5% in September. The stock 6% from the July 31 high.
Wells Fargo is down 7% in September. The stock is down 12.6% since mid-May.
Citigroup and Morgan Stanley are down about 4% in September. Citigroup is 11% from the July 17 high, and Morgan Stanley is 8.5% from the July 16 high.
Bank of America is down 2% in September. The stock is 10% from the July 17 high. 

Rates and the Fed

Yields on the 10-year and two-year Treasury notes rose a bit Wednesday after the Fed’s cut.
Yields on the one-year, six-month, three-month and one-month Treasury bills all fell.
The 10-year is now at 3.7%.
The two-year is 3.62%.
The one-year is 4.02%.
The six-month is 4.58%.
The three-month is 4.78%.
The one-month is 4.79%. 

Gold

On Wednesday, the commodity hit a new high.
Jeffrey Gundlach of DoubleLine Capital, who correctly predicted a 50 basis point cut, told CNBC TV’s Scott Wapner on Wednesday that “gold is symptomatic of a market in accumulation mode.”  He also sees political risk and thinks that is likely to help gold keep moving higher.
The VanEck Gold Miners ETF (GDX) is up roughly 5% in a week. More

The Federal Reserve cut its benchmark rate by a half percentage point, or 50 basis points, at the end of its two-day meeting Wednesday.
For consumers, this means relief from high borrowing costs — particularly for mortgages, credit cards and auto loans — may be on the way.

People shop at a grocery store on August 14, 2024 in New York City. 
Spencer Platt | Getty Images

The Federal Reserve announced Wednesday it will lower its benchmark rate by a half percentage point, or 50 basis points, paving the way for relief from the high borrowing costs that have hit consumers particularly hard. 
The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

Wednesday’s cut sets the federal funds rate at a range of 4.75%-5%.
A series of interest rate hikes starting in March 2022 took the central bank’s benchmark to its highest in more than 22 years, which caused most consumer borrowing costs to skyrocket — and put many households under pressure.
Now, with inflation backing down, “there are reasons to be optimistic,” said Greg McBride, chief financial analyst at Bankrate.com.
However, “one rate cut isn’t a panacea for borrowers grappling with high financing costs and has a minimal impact on the overall household budget,” he said. “What will be more significant is the cumulative effect of a series of interest rate cuts over time.”
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“There are always winners and losers when there is a change in interest rates,” said Stephen Foerster, professor of finance at Ivey Business School in London, Ontario. “In general, lower rates favor borrowers and hurt lenders and savers.”
“It really depends on whether you are a borrower or saver or whether you currently have locked-in borrowing or savings rates,” he said.
From credit cards and mortgage rates to auto loans and savings accounts, here’s a look at how a Fed rate cut could affect your finances in the months ahead.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. Because of the central bank’s rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — near an all-time high.
Going forward, annual percentage rates will start to come down, but even then, they will only ease off extremely high levels. With only a few cuts on deck for 2024, APRs would still be around 19% in the months ahead, according to McBride.
“Interest rates took the elevator going up, but they’ll be taking the stairs coming down,” he said.
That makes paying down high-cost credit card debt a top priority since “interest rates won’t fall fast enough to bail you out of a tight situation,” McBride said. “Zero percent balance transfer offers remain a great way to turbocharge your credit card debt repayment efforts.”

Mortgage rates

Although 15- and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power in the last two years, partly because of inflation and the Fed’s policy moves.
But rates are already significantly lower than where they were just a few months ago. Now, the average rate for a 30-year, fixed-rate mortgage is around 6.3%, according to Bankrate.

Jacob Channel, senior economist at LendingTree, expects mortgage rates will stay somewhere in the 6% to 6.5% range over the coming weeks, with a chance that they’ll even dip below 6%. But it’s unlikely they will return to their pandemic-era lows, he said.
“Though they are falling, mortgage rates nonetheless remain relatively high compared to where they stood through most of the last decade,” he said. “What’s more, home prices remain at or near record highs in many areas.” Despite the Fed’s move, “there are a lot of people who won’t be able to buy until the market becomes cheaper,” Channel said.

Auto loans

Even though auto loans are fixed, higher vehicle prices and high borrowing costs have stretched car buyers “to their financial limits,” according to Jessica Caldwell, Edmunds’ head of insights.
The average rate on a five-year new car loan is now more than 7%, up from 4% when the Fed started raising rates, according to Edmunds. However, rate cuts from the Fed will take some of the edge off the rising cost of financing a car — likely bringing rates below 7% — helped in part by competition between lenders and more incentives in the market.
“Many Americans have been holding off on making vehicle purchases in the hopes that prices and interest rates would come down, or that incentives would make a return,” Caldwell said. “A Fed rate cut wouldn’t necessarily drive all those consumers back into showrooms right away, but it would certainly help nudge holdout car buyers back into more of a spending mood.”

Student loans

Federal student loan rates are also fixed, so most borrowers won’t be immediately affected by a rate cut. However, if you have a private loan, those loans may be fixed or have a variable rate tied to the Treasury bill or other rates, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down over a one- or three-month period, depending on the benchmark, according to higher education expert Mark Kantrowitz. 
Eventually, borrowers with existing variable-rate private student loans may be able to refinance into a less expensive fixed-rate loan, he said. But refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.
Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
As a result of Fed rate hikes, top-yielding online savings account rates have made significant moves and are now paying more than 5% — the most savers have been able to earn in nearly two decades — up from around 1% in 2022, according to Bankrate.
If you haven’t opened a high-yield savings account or locked in a certificate of deposit yet, you’ve likely already missed the rate peak, according to Matt Schulz, LendingTree’s credit analyst. However, “yields aren’t going to fall off a cliff immediately after the Fed cuts rates,” he said.
Although those rates have likely maxed out, it is still worth your time to make either of those moves now before rates fall even further, he advised.
One-year CDs are now averaging 1.78% but top-yielding CD rates pay more than 5%, according to Bankrate, as good as or better than a high-yield savings account.
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Homeowners shouldn’t expect much of a difference in mortgage rates after the Federal Reserve’s first interest rate cut in years.
That’s because “a lot of these rate cuts are already priced in,” Chen Zhao, the economic research lead at Redfin, an online real estate brokerage firm, recently told CNBC. 
Here’s how to know it when it’s time to refinance your mortgage, according to experts.

Andresr | E+ | Getty Images

The Federal Reserve cut interest rates by a half percentage point, or 50 basis points, on Wednesday, its first interest rate cut since March 2020. But homeowners shouldn’t bet on the move as an opportunity to immediately refinance their mortgage.
That’s because “a lot of these rate cuts are already priced in,” Chen Zhao, the economic research lead at Redfin, an online real estate brokerage firm, recently told CNBC. 

While mortgage rates are partly influenced by the Fed’s policy, they are also tied to Treasury yields and the economy. Home loan rates have already started to come down in recent weeks, slightly induced in part by favorable economic data and indications the Fed could cut rates.
As of Thursday, the average 30-year fixed rate mortgage in the U.S. was 6.20%, according to Freddie Mac data via the Fed. That’s down from this year’s peak of 7.22% on May 2.
More from Personal Finance:What homeowners and buyers need to know as first rate cut is on the horizonDon’t expect ‘immediate relief’ from the Federal Reserve’s first rate cutMortgage rates are falling, improving home buying conditions
It can be very difficult to perfectly time a mortgage refinance by looking at mortgage rate activity alone, said Jeff Ostrowski, a housing expert at Bankrate.com.
“It’s almost impossible to figure out what mortgage rates are going to do from week to week or month to month,” Ostrowski said.

Yet there are ways homeowners can determine when a refinance makes the most sense to them, experts say, especially if more rate cuts are slated before the end of the year.
Here’s how to know when it’s time to refinance your mortgage, according to experts.

‘This is going to be a much smaller wave’

Refinance activity increased to 46.7% of total applications during the week ending Sept. 6, up from 46.4% the week before, according to the Mortgage Bankers Association.
While there has been an increase in refinances as mortgage rates come down, “compared to the massive refinance boom” in 2020 and 2021, “this is going to be a much smaller wave of refinances,” said Ostrowski.
Most homeowners have a mortgage rate below 5%, said Jacob Channel, senior economic analyst at LendingTree.

A refinance will mostly benefit a “small number of people” who bought homes “when rates were at 8%,” said Ostrowski.
Whether it’s smart for homeowners to refinance their mortgage will depend on factors such as their existing borrowing and repayment timeline, experts say.

How to know when it’s time to refinance

If you are thinking about refinancing, look carefully at what’s going on with rates in the market, reach out to lenders and see if doing so now or in the near future makes the most sense for you, Channel said.
“The only person who can decide whether or not refinancing is going to be worth it is you, based on what’s going on in your life,” he said.
Here are three criteria that can help you determine if a refinance makes the most sense to you:
1. You can cut your rate by 50 basis points or more
To know when it makes sense to refinance, homeowners need to see a notable drop in mortgage rates in order to benefit, experts say. The prevailing rate should be at least 50 basis points below your current rate, Zhao said.
But that’s not a “hard and fast rule,” Channel said.
Some experts set a higher bar: It “makes sense” to consider a refinance if rates have fallen one to two points since you took out the mortgage, Ostrowski said.
Even if your existing mortgage has a high rate, you might want to consider waiting until the central bank is further along in its cuts. The expectation is that rates are to steadily decline throughout the rest of 2024 and into 2025, according to Zhao.
2. You can afford refinance costs
There are two ways to pay for a refinance: with cash up front, or by rolling the expense into your new loan, boosting your monthly mortgage payment.
There’s no such thing as a free lunch when it comes to refinancing a loan, Melissa Cohn, regional vice president of William Raveis Mortgage in New York, told CNBC in August.

Generally, a refinance is going to cost between 2% and 6% of the loan amount that you are refinancing, said Channel.
For example: If your current loan amount is $250,000 and you’re refinancing the total amount, expect to pay anywhere between 2% and 6% of $250,000, or roughly $5,000 to $15,000.
If you plan to refinance, make sure you can afford the associated costs, such as closing costs, an appraisal and title insurance. The total cost will depend on your area.
3. Your savings will outweigh the costs
You can also look into your “break-even point,” or the moment your savings eclipse the cost of the refinance, said Channel.
Here’s an example on doing that math: If you decide to refinance your mortgage and it costs $6,000 and you’re saving $200 a month, divide $6,000 by $200. The result is the number of months that you have before your refinance has “paid for itself.” More