FOMC Meeting Preview: What to Expect for Mortgage Rates and the Home Buying Market
The Federal Open Market Committee (FOMC) is set to conclude their latest meeting on Wednesday September 20, 2023. The FOMC is the Federal Reserve’s policy-making committee, and its decisions have a major impact on the economy, including mortgage rates.
“We anticipate that the FOMC is going to take a pause and hold the Fed Funds rate in the range of 5.25-5.5%.” says Preetam Pruhoit, Head of Hedging and Analytics at Embrace Home Loans. “But we also expect that they will maintain a hawkish tone, which means that – if economic conditions warrant – they will not shy aware from a further rate increase in either the November or December cycle.
What’s going to change this month is that, since growth projections have been coming in higher than expected, Freddie is going to have to acknowledge that and acknowledge that they are going to have to keep interest rates higher, for longer. What this means is instead of four projected rate cuts in 2024, they might have fewer than that.”
What is expected from the Fed meeting?
Most economists expect the Fed to pause on rate hikes at this meeting. The Fed has raised rates aggressively in recent months in an effort to combat inflation, but there are signs that inflation may be starting to cool. Additionally, the economy is showing some signs of slowing, and the Fed may want to avoid causing a recession.
What does this mean for mortgage rates?
If the Fed pauses on rate hikes, mortgage rates are likely to remain stable or even decline slightly. However, it is important to note that mortgage rates are also influenced by other factors, such as economic growth and inflation expectations. If the economy slows down or inflation picks up again, mortgage rates could rise.
What should you do if you are thinking about buying a home?
If you are thinking about buying a home, it is important to consider that competition in the homebuying market typically slows down in the later months of the year. This is because many families want to move before the start of the school year, and sellers may be more motivated to negotiate on price in the fall and winter.
It is also important to lock in a mortgage rate to avoid any uncertainty. At Embrace Home Loans, we have a unique solution to help get your offer to the front of the line. Learn more about our Property Value Certificate and Approved to Close Backup Cash Guarantee to see how Embrace can help you WIN THE BID.