Today’s post is written by Michael Green, Senior Commercial Loan Originator with Counsel Mortgage Group, LLC. Mike writes monthly on the commercial mortgage market. Check back each month for his commentary.

Markets are poised today awaiting the FED announcement tomorrow of interest rate policy for the next 6 weeks. A heavy abundance of FED watchers collectively anticipates no change in the Fed Funds rate. The post-meeting press conference is expected to phrase in no uncertain terms that the next rate decrease will occur at the September meeting in 6 weeks. (We note that black swans regularly upset the smart-money majority opinion.)

Expect the Fed’s justification for no change to be that the economy is holding up well, labor is cooling off nicely, and inflation data continue to show declining trends. All this to offer encouragement to market participants – that’s you and me. A brief peek below the surface of the headline numbers, however, shows discomforting turbulence below the otherwise calm surface. Remembering this is an election year, now less than 100 days out, the unsupporting details of the “everything’s OK” report won’t get much, if any, mention. Supporters of the current administration will continue to voice in unison that we’re on course for a soft landing. Heeding Yogi Berra’s oft-quoted wisdom, “Making predictions is difficult, especially about the future.,” we abstain from offering false wisdom.

Today’s JOLTS (Job Openings and Labor Turnover Survey) report lent credence to the Fed’s posture interpreting a labor market that has normalized, but which doesn’t look to have turned the corner into outright weakness. We also note in passing that July unemployment numbers come out this Friday … more fuel for the fire.

And so, what to do? If you haven’t already done so, the time to initiate your loan is now. Depending on the complexity of your project, loan packages can take 2-3 months to assemble and document. If forecasts are correct, a September rate drop in 6 weeks will open the flood gates to pent up demand. Lenders are preparing for this – borrowers are lagging. Knowledgeable opinions call for a rate decrease in Sept. and another in Dec. (after the election), then 3 more in 2025. Lenders, particularly private money, are flush with cash that they want to get invested (lent out) before the end of the year to tidy up annual reports and capture rates before they make a meaningful decline. Their problem to this point is an absence of borrowers who wouldn’t take the higher rates. SBA 7(a) rates (variable) and terms should be attractive if you qualify – they’ll adjust down with rate declines. Conventional lenders should be expected to offer you fixed rate alternatives.

All-in-all, an interesting H2-24. If you’d like a more detailed monthly update of the market and things that matter, and don’t already get our complimentary Counsel Comments, contact our office to be added to our list of subscribers.