It seems likely that the Federal Reserve will be cutting the Federal Funds Rate after meeting this week. Instead of speculating on "will they?", let's learn what it means if they do.
The Federal Funds Rate is the short-term interest that banks charge eachother, which impacts the economy as a whole when it comes to borrowing costs. It's not the same as a mortgage rate but can shape where mortgage rates end up at.
People who observe the market say there's a high chance the Fed goes with a 25-basis point cut, and a few believe they could go by a 50-basis point cut. COnsidering the idea that it's the former of the two, we probably won't see a dramatic drop in mortgage rates. If it's the latter, then mortgage rates could come down further than they already have.
Even if the cut is on the msaller side and doesn't affect where mortgage rates are at the moment, this isn't expected to be the final cut. In fact, CME Group believes that there is a nearly 80% chance that there are 3 Federal Funds Rate cuts probable just this year. Even if these cuts don't happen it's possible that the belief of these cuts could ease mortgage rates further in the months to come. This can change in either direction at any time.
Our advice on the matter, the best time to get into the market is now. You can't often predict exactly what will happen, but amount of time in the market is more time you build equity in your home. Click here to get in contact with a professional.