Where Are Interest Rates Heading?

If you've been keeping an eye on the market, you may have noticed that interest rates haven't decreased as predicted by experts heading into 2024. In fact, The Federal Reserve has recently pushed the prospect of interest rate cuts even further into the future.

So instead of waiting for those lower rates, let’s change how we look at rates.

At the end of 2023, experts predicted that rates would decrease in 2024 as inflation slowed substantially at the end of the year.

However, amid concerns about the recent inflation reports earlier this year, The Federal Reserve has recently pushed the prospect of interest rate cuts further into the future.

Although inflation has significantly decreased from its peak, it remains stubbornly above the Fed’s 2% target.

And as long as inflation remains elevated, mortgage rates are unlikely to fall.

So if you’ve been on the sidelines waiting for rates to decrease, you may be waiting a while.

Instead of focusing on the interest rate alone, work with a lender or realtor to determine the true monthly payment you can (and want to) afford. While lower interest rates make it cheaper to borrow money, interest rates are just one factor that determines affordability.

Another factor is demand. When interest rates decrease, demand tends to rise as more people can afford to buy. Consequently, prices often begin to rise as interest rates decline. But let's be honest... we're not seeing 3-4% interest rates again in our lifetime.

If you've been on the fence about moving due to interest rates, send me a message! I'd love to help you figure out your buying power in today's market and get you moving!

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