Are you planning to purchase a home this fall? If so, you’ve probably wondered how the recent US economic news may affect your home-buying plans. With interest rates on the move and the housing market making headlines, it’s normal to have questions. In this blog, we’ll break down the latest updates and give you the lowdown on what they mean for you. Let’s dive in and make sense of it all together!
What’s Ahead for Mortgage Interest Rates
The Federal Reserve (Fed) sets the standard interest rate, which is not the same as mortgage rates. When the Fed cuts the standard interest rate, mortgage rates tend to drop in response, but it is not a proportional movement. At the upcoming September meeting, they’re expected to weigh in on whether we’ll see a single rate cut before the year’s end. Most experts predicted we’d see multiple rate cuts in 2024 but inflation has remained stubbornly above the Fed’s target for much of this year. Now, things look to finally be cooling and with it, a potential rate cut is back on the table. Mortgage interest rates have also crept down in recent weeks, in response to some of the most recent positive economic reports.
For the latest on today’s mortgage rates, you should always consult with your lender at the Potempa Team!
The Stock Market and Your Home-Buying Plans
Early in August, Wall Street experienced its worst single-day drop in nearly two years. While this sort of headline sounds alarming, as of writing, the stock market has already rallied following a “better-than-expected report on unemployment.”
What does all this mean for the average US homebuyer? For most, it means it’s not time to pull back on your home-buying plans just yet. Markets go up and down in response to a wide variety of factors, including things happening around the world and not just here at home! No matter what happens with the market, real estate is usually a strong investment choice.
Decoding the US Jobs Report
Financial experts monitor several key reports to help them understand the current economic picture and forecast future events. July’s US jobs report showed both slowing job growth and a higher unemployment rate. Job growth was below the expected target for the month. However, that does not mean the economy is headed down a bad road. The Fed has been actively working to decrease inflation during the post-pandemic recovery years. Most experts agree that a cooling job market is a sign that the plan is working. The jobs report is one of the items the Fed uses to decide whether to raise, lower, or maintain the standard interest rate. With July’s report, it has fueled increased speculation that a rate cut is coming this fall. When and if that happens, mortgage rates may dip in response, which is great news for home buyers.
If you’re determined to buy a home this year, consider the economic picture and your personal situation to ensure that now is the right time to move forward. Have questions? We at the Potempa Team can help! With over 70 years of combined leadership experience and $1 Billion in mortgages originated over the last year alone, we’re experts in helping people understand their home financing options so they can make the best choice to accomplish their goals. Get in touch with our team today!
