When Will Feds Cut Interest Rates?

During the last month of 2023 the Feds announced that they were going to cut interest rates in 2024, which caused mortage rates to dramatically decline in December. Many experts predict and expect Feds to cut rates five times this year, which is sure to cause a significant increase home prices during 2024.

Current mortgage rates are floating around 6.5% with the first cut expected to come in March. Historically speaking, Spring & Summer have always been known as the "busy season" with most buyers trying to move into their preferred school district before the school year begins.

However, in this market some buyers have been able to secure great rates via builder incentives (see my last post here on why you should buy new in this market) or buying down their rates at closing. Others have chosen to take the 6%+ mortgage rate and plan to refinance later. All buyers, even cash buyers, have been enjoying the lower sales prices, which is sure to end soon.

The Fed Chair, Jerome Powell, predicts that after all interest rate cuts have been made, the federal fund rate will be 4.6% at the end of the year.

Those who bought during the pandemic are likely cringing at that number. However, most experts would agree that the days of 3% interest rates are behind us (barring another tragic event like COVID). Waiting for rates to get COVID-level low are more-than-likely going to leave you on the sidelines for years, if not for eternity.

If you're thinking about selling your home, I recommend waiting until March (if possible) when rates start to come down. We're just over 30 days away from March 1 so most can elect to do that.

But if you're thinking about buying, I would advise that you begin that process now. As rates fall, prices rise. I recommend having that pre-approval ready to go while comps still suggest a lower sales price. Then, as rates fall, your pre-approval can go up almost immediately. Again, March is just over 30 days away so I would strongly urge those who plan to buy in the next 2-3 months to begin obtaining your pre-approval letter now.

If you want to begin the conversation of buying or selling a home, give me a call for a free consultation.

If you'd like to begin the process of getting pre-approved for a home, shoot me an e-mail and I'll send you my preferred lenders!

Justin Tipton

(214) 616-8863

justin@tiptonrealtytx.com

Best Realtor Dallas Fort Worth