The latest headlines may have you wondering what’s next for mortgages. You may have already heard that there will be an interest rate cut this year. This has to do with the Federal Reserve (FED) and what they do with the federal funds rate. While the Fed’s interest rate cuts do not directly drive mortgage interest rates, they do have an impact. But when the Fed met last week, there were no cuts, at least not yet.
There are many factors the Fed considered in its recent decision, many of them complex. But you don’t have to get caught up in these little details. You really want to know the answer to this question. Does this mean mortgage rates won’t go down? You must know this.
Mortgage interest rates are expected to fall further this year
Just because it hasn’t happened yet doesn’t mean it won’t. Even Federal Reserve Chairman Jerome Powell has said he plans to cut spending again this year once inflation subsides.
“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.”
When this happens, history shows mortgage rates will likely follow. That means hope isn’t lost. As a recent article from Business Insider explains:
“As inflation comes down and the Fed is able to start lowering rates, mortgage rates should go down, too. . .”
What does this mean to you?
But you don’t have to wait for that to happen. Mortgage interest rates are very difficult to predict. There are many factors, any of which could change our forecasts as the economy changes. Therefore, experts recommend this advice. Mark Fleming, chief economist at America First, said:
“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.”
Simply put, if you want to move in and program the market, don’t. If you’re ready, willing and able to move, it might be worth moving now. Especially if you can find the house you’ve been looking for.
