Are Rate Cuts Coming? What Homebuyers Need to Know Now!

Here's the latest scoop on what to expect with mortgage rates.

Despite recent data showing inflation at 3.4% and a 0.3% increase in April’s Consumer Price Index, the Federal Reserve decided to keep the federal funds rate unchanged for the sixth meeting in a row. This decision has pushed back the rate cuts many hoped would come by mid-2024.

Looking ahead to the Fed’s next meeting on June 11-12, many potential borrowers are crossing their fingers for a rate cut that could bring down mortgage rates. But with inflation and unemployment rates still a concern, most experts are saying "don't hold your breath" for a significant drop just yet. 

The Fed has a goal of 2% inflation, and they're sticking to it, even if it takes longer than expected. In fact, if current measures don’t work, rate hikes could still happen, which means mortgage rates would stay around the 7% mark.

Now, while the Fed doesn't set mortgage rates directly, rates usually follow the Fed’s lead. That's one reason why mortgage rates have stayed elevated, with the average 30-year fixed-rate mortgage now hitting 7.18% as of June 4, 2024.

So, what’s the bottom line?

It looks like mortgage rates are going to hover around 7% for a while. If you’re looking to buy a home this year, waiting for significantly lower rates might not save you much. 

Stay tuned, and keep an eye on those Fed meetings!