What’s the Latest with Mortgage Rates?
Recent headlines may leave you wondering what’s next for mortgage rates. You may have heard that cuts this year could lower rates. This refers to the Federal Reserve (the Fed) and their Fed Funds Rate. While changes in the Fed Funds Rate don’t directly set mortgage rates, they often influence them. Last week, no rate cut occurred, but that doesn’t mean rates won’t fall.
Mortgage Rates Are Still Expected To Drop This Year
Even though it hasn’t happened yet, Jerome Powell, Chairman of the Fed, indicated that cuts are still planned for this year if inflation continues to cool:
“We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”
History shows mortgage rates generally follow Fed rate cuts. As Business Insider notes:
“As inflation comes down and the Fed is able to start lowering rates, mortgage rates should go down, too…”
What This Means for You
Waiting for rates to drop may not be the best strategy. Mortgage rates are difficult to predict and subject to many economic factors. Experts recommend focusing on your personal readiness rather than trying to time the market. Mark Fleming, Chief Economist at First American, advises:
“Well, mortgage rate projections are just that, projections, not promises and don't forget how hard it is to forecast them. So my advice is to never try to time the market. If one is financially prepared and buying a home aligns with your lifestyle goals, then it could be the right time to purchase. And there's always the refinance option if mortgage rates are lower in the future.”
If you’ve found the home you want, it may be worth moving forward now rather than waiting for potential rate drops.
Bottom Line
If you’re looking to buy a home, let’s connect so you have someone keeping you updated on mortgage rates and helping you make the best decision possible.
