Waiting for Mortgage Rates to Drop?
Have you seen headlines about mortgage rates lately? It’s been a bit of a rollercoaster, right? You might’ve heard whispers about mortgage rates dropping this year, thanks to the Federal Reserve (the Fed) adjusting their Fed Funds Rate. While the Fed’s actions don’t directly set mortgage rates, they definitely influence them. At their latest meeting in March, they decided not to cut rates – at least, not yet.
The Fed considers many complex factors before making its decisions. But let’s skip the nitty-gritty and get straight to what you’re wondering: are mortgage rates going to drop anytime soon? Here’s what’s happening.
Mortgage Rates Expected to Drop This Year
While rates haven’t dropped quite yet, that doesn’t mean they’re not going to. Jerome Powell, the Chairman of the Fed, mentioned they’re eyeing rate cuts later this year if inflation calms down:
“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.”
Historically, when the Fed starts cutting rates, mortgage rates tend to follow suit. So, there’s still hope for lower mortgage rates this year!
What This Means If You’re House Hunting
Mortgage rates are tricky to predict because so many things can affect them. And that’s why experts say not to play the waiting game. Mark Fleming from First American breaks it down:
“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.”
In other words, if you’re ready for a new home and find one that checks all your boxes, going for it now might still be a smart move. Plus, there’s the option to refinance if and when rates drop down the line.
Should You Wait for Rates to Drop?
Are you curious if you should wait for rates to drop before buying a home? Let’s chat! We’ll discuss your plans and go over the pros and cons of buying now and of waiting for rates to drop. We’re here to help you make the best informed decision about your financial future!
