"The Fed’s decision was pretty aligned with market pricing," Zhao notes, so a major drop in mortgage rates is highly unlikely. But if the Federal Reserve were to make further cuts more slowly than markets are currently predicting, she says "rates have a little bit of room to potentially come up."

U.S. stocks ended mixed on Monday, as traders’ expectations for the Federal Reserve to deliver a 50-basis-point rate cut on Wednesday continued to grow. The Dow Jones Industrial Average went up 228.30 points or 0.

The Fed went big this week and delivered a 50-basis point rate cut, with more easing on the horizon. Small caps tend to outperform the most during easing cycles, especially when the economy manages to avoid falling into a recession.