The Fed’s announcement was very encouraging. They said they will likely no longer increase the Fed Funds rate, and look to decrease the rate next year. This is big news. The stock markets took off, and the Dow reached a record high. As a result of this good news, how quickly will mortgage rates come down? Should you wait for mortgage rates to come down prior to purchasing your home?

Mortgage rates actually dipped yesterday on the heels of the announcement. But, will they continue to go lower, and how quickly?

The Fed’s drastic move upwards was to tame inflation. It continues to be the basis of their policy. They reiterated that if inflation increases, they will consider tightening policy. But, as the rate of inflation is decreasing, they do not foresee increasing the Fed Funds rate any further, and plan on reducing it over the next year. So, to see where rates are heading, keep your eyes on inflation.

Many pundits are predicting when the Fed may lower rates next year. The fact is no one knows, and the Fed’s actions will be based on what the data provides at that time. Mortgage rates, however, don’t wait on the Fed. They are trending down and may continue based on inflation data.

Should you wait to buy a home once mortgage rates come down? Well, the analysis for this decision has not changed. You should purchase when you find a home you like and are comfortable with the payment. This does not change no matter the rates or values of the homes. If you are comfortable with the payment today, you’ll certainly be comfortable with the payment if rates come down and you refinance later.

Overall, this is good news and we think it will result in more opportunities in real estate in the upcoming year. If you have questions, or need help with whether to purchase real estate, contact us and our experienced originators. We’ll review your finances and help you decide whether to purchase, and place you in a mortgage that best suits your needs, with the lowest rate and costs.