The Federal Reserve Board left policy rates unchanged at their most recent meeting, as expected. Mortgage rates had already fallen in anticipation.   

Looking ahead to 2024

In conjunction with their meeting, the Fed released its most recent set of economic projections. Officials expect inflation to fall more quickly than previously anticipated, reaching their target of 2% in 2026.

While individual board members have been saying that further rate increases are still on the table, the projections showed expectations for up to three cuts in 2024.

If rate cuts are expected, should you wait to buy, refi or access equity?

Not necessarily.

Mortgage rates move based on demand for mortgage-backed securities, and investors typically act in anticipation of Fed actions. You may be able to access lower rates before the Fed makes a move.

We also have programs that can help mitigate higher rates if they don't fall as fast as you'd like. A hybrid ARM, for example, offers a lower initial rate before adjusting to market rates later. Fixed rate buydowns and HELOCs can help you move forward with your plans, too.

If you want to wait a little longer for more favorable rates, this is a good time to start preparing so you’ll be ready when the time is right for you. 

Background on the Fed:

• The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
• The Fed has a standing goal to maintain inflation within a 2% range. Over the last year, they hoped to slow spending and inflation by making borrowing more expensive.
• The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.

The Fed raised rates for 11 of the last 15 meetings, with pauses in June, September, November and December. 

Bottom Line:

If this is your time to buy, refi or access cash from equity, don't let uncertainty about rates slow you down. We're here to help, and we're still closing loans every day!