this Fed Keep interest rates stable at its monetary policy meeting this week – despite inflation, increased unemployment and slower economic growth may force people Central Banks Reduce Interest Rate In late spring or early summer.
As recession fears and uncertain trade policy pressures financial markets, the key question for investors is how the Trump administration’s economic austerity measures and tariffs will be What affects the Fed Interest rate forecast.
Tax transactions this week
The transaction was selected by the CNET Group business team and may not be related to this article.
Fed Chairman Jerome Powell is Wednesday’s press conference. “We don’t need to rush to adjust our policy stance, we have a better wait for clarity.”
The Fed’s mission is to maintain maximum employment and include inflation. one Slow economy usually guarantees lower interest rates Stimulate growth, but lower interest rates may boost price growth when inflation remains above target.
Despite this, the Fed sets short-term benchmark interest rates for lenders, only Indirectly affecting the mortgage market. Central banks tripled in 2024, but mortgage loans The rate has not dropped.
This is because interest rates are driven primarily by the movement of the bond market, especially based on 10-year fiscal yields. Bond yields and interest rates rise or fall, depending on how New economic data Transfer market speculation and risk assessment. Mortgage rates will continue to fluctuate until the impact of government policies becomes clearer.
Read more: How the Fed’s decision affects mortgage rates
What is the path to mortgage interest rates now?
Fannie Mai Project Mortgage The ratio remains above 6.5% For most of the year. However, lenders base their interest rates on a range of factors and do not set the forecast to stone. Given the instability of the economy, any sign of risk or disruption can lower bond yields and affect the trajectory of mortgage interest rates.
For example, if a recession is possible, mortgage rates may start to fall, but they need to be close to 5.5% to get buyers into the market on a large scale. Alex ThomasSenior Research Analyst at John Burns Research and Consulting.
While cheap home loan rates are positive for housing affordability, a shaky economy can freeze the housing market. “If lower mortgage rates are the result of the recession, housing demand may be muted,” Thomas said.
Potential home buyers Wait for mortgage rates to fall In the past few years, it may be necessary to adapt to the “new normal” in the mortgage market, with interest rates fluctuating between 5% and 7% in the long run. With the nearest 2% interest rate A pandemic era. But experts say it is unlikely that there will be 3% of mortgages without a severe recession. Since the 1970s, 30 years fixed mortgage loan About 7%.
Today’s An unaffordable housing market Not only due to the high mortgage rates. one Long-term housing shortageOver the past few years, expensive house prices and loss of purchasing power due to inflation have locked buyers in place.
Tips for home buyers today
and Spring home buying season With a quick approach, potential homebuyers wonder whether to enter the market or continue to wait outside the market. It’s never a good idea to rush into Buy a house No clear budget was established.
Here is what the experts suggest before buying a home:
💰Build your credit score. Your credit score will help determine if you are eligible for a mortgage and at what interest rate. one Credit Score At 740 or higher, it will help you get lower interest rates.
💰 Save a bigger down payment. Bigger down payment Allows you to take out a smaller mortgage and get a lower interest rate from the lender. If you can afford it, a down payment of at least 20% will also eliminate private mortgage insurance.
💰Shopping Mortgage Lender. Comparing loan offers from multiple mortgage lenders can help you Negotiate higher rates. Experts recommend getting at least two to three loan estimates from different lenders.
💰 Consider the mortgage point. You can get a lower mortgage rate by purchasing Mortgage Pointeach point costs 1% of the total loan amount. One mortgage point equals your mortgage rate drops by 0.25%.
