Recent headlines may leave you wondering what’s next for mortgage rates. Maybe you’d previously heard there would be cuts this year that would bring rates down. That refers to the Federal Reserve (the Fed) and what they do to their Fed Funds Rate. Cutting or lowering the Fed Funds Rate doesn’t directly determine mortgage rates but tends to impact them. But when the Fed met last week, a cut didn’t happen — at least, not yet.
The Fed considered many factors in its recent decision, most complex. But you don’t need to be bogged down by those finer details. What you want is the answer to this question: Does that mean mortgage rates aren’t going to fall? Here’s what you need to know.
Mortgage Rates Are Still Expected To Drop This Year
While it hasn’t happened yet, that doesn’t mean it won’t. Even Jerome Powell, the Chairman of the Fed, says they still plan to make cuts this year, assuming inflation cools:
“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 This Means for You
But you don’t necessarily want to wait for it to happen. Mortgage rates are notoriously hard to forecast. There are so many factors at play, and any one of them can change the projections as the economy shifts. And it’s why the experts offer this advice. As Mark Fleming, Chief Economist at First American, says:
“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 want to move and time the market, don’t. If you’re ready, willing, and able to move, it may still be worth doing it now, especially if you can find the home you’ve been searching for.
Bottom Line
If you’re looking to buy a home in Chicago, Illinois, let’s connect so you can have someone keep you up-to-date on mortgage rates and help you make the best decision possible.
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