Recent news may have you curious about the future direction of mortgage rates. You might have expected rate cuts this year that would lower mortgage rates, based on previous information. This expectation is tied to the actions of the Federal Reserve (the Fed) and its decisions regarding the Fed Funds Rate. While reductions in the Fed Funds Rate don't directly set mortgage rates, they often have an effect on them. However, at the most recent Fed meeting last week, no rate cuts occurred - at least, not immediately.

Let's break it down— the Fed looked at a bunch of things for their recent decision, and, yep, it's pretty complicated stuff. But hey, you don't have to dive deep into all that, right? The burning question for you is: will mortgage rates stay put or not? Here’s the scoop!

Mortgage Rates Are Still Expected To Drop This Year

While it hasn't happened just yet, that doesn't mean it's off the table. Even Jerome Powell, the Chairman of the Fed, has mentioned that they are still considering making cuts this year, provided that inflation eases up.

““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.”
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— Jerome Powell, the Chairman of the Fed

When situations like this arise, history has shown that mortgage rates are likely to respond accordingly. This indicates that there is still reason for optimism. According to a recent piece from Business Insider, ...

““As inflation comes down and the Fed is able to start lowering rates, mortgage rates should go down, too. . .”
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— Business Insider

What This Means for You

But you might not want to sit around waiting for it to happen. Predicting mortgage rates can be quite tricky. Numerous factors come into play, and a shift in the economy can easily alter the forecasts. That's why professionals like Mark Fleming, the Chief Economist at First American, suggest the following:

““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.”
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— Mark Fleming, Chief Economist at First American

If you're thinking about moving and wondering if it's the right time, my advice is: don't wait for the perfect moment. If you're prepared, motivated, and financially able to make the move, consider doing it now. You might just discover the home you've always dreamed of!

Bottom Line

If you're in the market for a new home, why don't we chat? It's always good to have someone on your side, keeping you informed about mortgage rates and guiding you towards making the best choice for you.