It is true that the Fed rate was unchanged this week but in their projections, the Fed pegs the year-end federal funds rate at 4.6 percent. That is more than three-quarters of a percentage point lower than where it is now. Given that the Fed meets six more times in 2024, it is a safe bet that there could be three quarter-point cuts between May and December. This is good news in the mortgage world because the markets were pricing in only two rate cuts because of the recent stronger than expected inflation reports. Fed Chair Jerome Powell showed less concern for the recent uptick in inflation pointing that it could be more of a recent seasonal adjustment than an actual concern. Those who predicted a recession for the past two years can "now take a breather" according to a recent article in US News and World Report. "Not only did the Fed hold interest rates steady at the highest levels in two years, it said the labor market remained strong and it moved up its forecast for economic growth this year from 1.4 percent to 2.1 percent." My buddy at Loan Depot had rates lower today - a Conventional 30-year fixed loan (with a minimum of 5 percent down) is 6.99 percent. This is down from over 7 percent last week.
National Association of Realtors Settlement