Recent news might have you wondering about the future of mortgage rates. You might have heard earlier predictions about rate cuts this year that were expected to lower rates. This relates to the Federal Reserve (the Fed) and its actions regarding the Fed Funds Rate. While cutting or lowering the Fed Funds Rate doesn’t directly set mortgage rates, it does often influence them. However, during the Fed’s recent meeting last week, no cut occurred — at least, not yet.
The Fed considered various complex factors in their recent decision, but you don’t need to get lost in those details. What you really want to know is whether mortgage rates will fall. Here’s what you need to understand.
Mortgage Rates are Anticipated to Decrease This Year
Although this adjustment has not occurred yet. This delay does not imply that it will not happen in the future. Even Jerome Powell, the Chairman of the Fed, has stated that they still intend to implement cuts this year, provided that inflation moderates:
“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.”
Historical trends suggest that when this adjustment occurs, mortgage rates are likely to follow suit. This indicates that there is still optimism for rate decreases.
What This Means for You
However, waiting for this anticipated drop may not be the best approach. Predicting mortgage rates is notoriously difficult due to the multitude of factors at play, any of which can alter projections as the economy changes. This is why experts offer the following advice. According to Mark Fleming, Chief Economist at First American:
“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.”
In essence, if you’re contemplating a move and attempting to predict the market, it’s advisable not to. If you’re prepared both financially and personally to make a move, it might still be worthwhile to do so now, particularly if you’ve found the home you’ve been seeking.
Bottom Line
If you’re in the market for a new home, let’s get in touch so you can stay informed about mortgage rates and receive guidance to make the best decision for your needs.
