The Federal Reserve recently cut its policy rates by 0.50%, and Fed Chair Jerome Powell hinted at the possibility of further cuts this year. But what does this mean for you?

What Did the Fed Say?

The Fed's latest statement highlighted a cooling job market and easing inflation. They believe that cutting the policy rate can encourage private sector spending without risking a spike in inflation. While Powell is optimistic about future rate cuts, he emphasized that upcoming decisions will depend on the latest data.

Will Mortgage Rates Drop?

The Fed doesn’t directly set mortgage rates, but investors often anticipate Fed actions. Mortgage rates have already dipped to their lowest levels of the year, but it’s uncertain how they’ll adjust following this recent cut.

Should You Wait to Act?

Consider these factors before deciding:

1. Acting Now Might Save You More: Mortgage rates often shift in anticipation of Fed moves or in response to other economic news. Waiting might not guarantee a better rate.

2. Market Competition: A rate cut could lead to increased competition and higher home prices. Purchasing now, even at a slightly higher rate, might save you money in the long run.

3. Build Equity: By buying now, you’re investing in your own property rather than paying rent, which builds equity for your landlord. Mortgage payments build equity for you.

4. Get Ahead with Pre-Approval: Starting the pre-approval process now puts you in a strong position when you’re ready to buy.

Let’s Discuss Your Options

We offer calculators to help you compare potential costs of buying now versus waiting. Additionally, programs like hybrid ARMs, fixed-rate buydowns, and HELOCs can help manage higher rates and make your purchase more affordable.

If you’re considering buying or refinancing, now is a great time to prepare. A qualification consultation or pre-approval can set you up for success.

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.
• This rate was lowered to near zero in March 2020 in response to the pandemic.
• The Fed has a standing inflation target of 2%. When historic inflation hit in March 2022, they began a cycle of rate increases to slow spending and bring it down.
• September brought the first policy rate cut since the initial change in 2020.

If you’re ready to buy, refinance, or access cash from your home’s equity, don’t let uncertainty hold you back.

We’re here to help—closing loans every day!