When will the elusive rate cuts arrive? 

As expected, the Federal Reserve Board left policy rates unchanged at their most recent meeting. Investors – those who actually control mortgage interest rates – were listening for hints of future action.  

Are rate cuts still on the board for 2024?

In March, Board members projected three policy rate cuts in 2024. At the May 1st press conference, Chairman Jerome Powell reaffirmed the Board's commitment to reaching 2% inflation. He also said, given current data, the Board expects achieving this goal to take longer than previously thought. As always stated, Powell affirmed that future data will determine when and if cuts are made in 2024.

If you can afford to purchase a home now, this may be the time to do so. Here's why: 

As home prices rise, the possibility of lower rates later may not be enough to make mortgage payments more affordable. It's worth a chat.

• We have mortgage calculators to help you weigh the potential costs when buying at a higher rate or a higher price.

• We also have loan programs that can help mitigate higher rates. A hybrid ARM, for example, offers a lower initial rate before adjusting to fixed rates later. Fixed rate buydowns and HELOCs can help you move forward with your plans, too.

If you want to wait on your next purchase, this is a good time to prepare. A qualification consultation or even a mortgage pre-approval is a great place to start.

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 goal to maintain inflation within a 2% range. When historic inflation hit in March 2022, they began a cycle of rate increases to slow spending and bring it down.

• As inflation slowed and came nearer the goal, the Fed paused its cycle. May was the sixth consecutive meeting with no increase. 

Bottom Line:

If this is your time to buy, refinance 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! 888.616.9885