Foreth of the mortgage rate: Will the Federal Reserve continue to postpone interest rate cuts?

The Federal Reserve plays the game “Red Light, Green Light” when it comes to Reduce interest rates.

On Wednesday, the Decisions of the Federal Reserves Council voted Leave the standard interest rate without changeThe price reduction path that was lighting green in September stopped.

Does this mean the average Mortgage rates Will it stick near 7 % in the short term? All this depends on one factor: the economy.

Since he started his second term, President Donald Trump has come to some Policies on Immigration and TradeThat is, experts see it is an inflation.

He said, “High definitions and restricted immigration policies DiedEconomic housing in Modi analyzes.

While Trump has repeatedly said that he would reduce mortgage rates to 3 % (which indicates that the country is in a A severe economic crisisThe president does not put prices on home loans. Even federal reserve policy decisions only Indirectly affects the mortgage market.

Regardless of the president’s promise to reduce borrowing costs, if inflation remains high, its rates will be. Mortgage rates depend mainly on movement in the bond market, specifically the treasury yield for 10 years. If inflation ends with cooling and resuming federal reserve rates, cabinet revenues and mortgage rates may decrease, until the next movement.

Why is the federal reserve stop at interest rate cuts?

During his remarks after the policy meeting on January 29, Federal Reserve Chairman Jerome Powell said that officials are not in a hurry to decrease interest rates and that the central bank is waiting to find out if inflation reduces. Standing Pat allows the study to assess the effects of the policies created by the Trump administration.

It makes sense to assume that today’s decision will lead to a temporary stops instead of overcoming one month. Graham died From the mortgage news, Daily says that if inflation decreases significantly during the next two months, possible prices will be reduced in March. However, most Investors are betting Another price reduction will not come until late spring or early summer.

The Federal Reserve is already facing pressure from Trump, which recently demanded low interest rates, although the president does not have the direct authority to implement this. Regardless of the expression of his views, the president’s impact on the central bank is by naming those appointed to fill the vacancies in the Governor Council.

Although Trump can appoint members of the Federal Reserve Board of Directors whose views are consistent with monetary policy with itself, he can only set new dates in early 2026.

Will the mortgage rates decrease in time for the home spring season?

Earlier last year, many economists predicted optimistic that interest rates will decrease to 6 % by late 2024. But since Trump was re -elected and the Federal Reserve’s replacement for price discounts, mortgage rate expectations have been more pessimistic.

Vi Mai Now the average expects Fixed mortgage rates for 30 years For a contract higher than 6.5 % until early 2025. Moody’s Walsh predicts a mortgage rate to average average of a little less than 7 % throughout the year.

However, economic data next month can always change the equation. “If economic data starts weak, we may have already seen peak rates for this year,” he said. Logan MuttashamiHousingWire’s main analyst.

In cnet 2025 Mortgage forecastsMohtashami pointed out that 6 % low rates are still possible in 2025. However, if Trump policies recharge inflation or strengthen government debt deficit, it will be difficult to achieve, especially in time for the spring season of the house.

Look at the housing market 2025

today The housing market cannot be affected Results from high mortgage rates, a Long -term housingHouse prices are expensive and purchasing energy loss due to inflation.

🏠 Low housing stock: The balanced housing market is usually five to six months of supply. Most of the markets today are about half of this amount. according to Freddy MacWe still have a deficiency of about 3.7 million homes.

🏠 High mortgage Rates: In early 2022, the mortgage rates reached the lowest levels of about 3 %. As inflation increased and interest rates in the Federal Reserve raised to tame it, real estate mortgage prices have multiplied more than twice. In 2025, the mortgage rates are still high, with a pricing of millions of potential buyers from the housing market.

🏠 The scaling lock effect: Since the majority of home owners Closed in mortgage rates Less than 5 %, they are reluctant to give up low mortgage rates and have a little incentive to include their homes for sale, leaving a scarcity in the inventory of resale.

🏠 High prices of homes: Although the demand for home purchasing has been limited in recent years, home prices are still high due to inventory shortages. The average price of a home in the United States was 427,179 dollars In December, an increase of 6.2 % on an annual basis, according to RDFIN.

🏠 sharp inflation: Inflation means an increase in the cost of commodities and basic services, which reduces the purchase strength. It also affects mortgage rates: when inflation is high, lenders usually raise interest rates on consumer loans to ensure profit.

What the housing buyer should know

It is never good to rush to Buy a house Without knowing what you can bear, so create a clear budget to buy the house. Here are what experts recommend before buying a house:

💰 Build your credit degree. Your credit degree will help determine whether you are eligible to get a mortgage and at any interest rate. A Credit From 740 or above it will help you qualify for a lower rate.

💰 Except for a larger first batch. greater Premium It allows you to get a smaller real estate mortgage and get a lower interest rate than your lender. If you can bear it, the batch is at least 20 % will remove the private mortgage insurance.

💰 Shop the mortgage lenders. It can help compare loans from multiple mortgage lenders Negotiate a better rate. Experts recommend obtaining at least two estimates of loans from two different lenders.

💰 Consider the leasing. Choose to Renting or buying a house Not only compare the monthly rent by paying the mortgage. Provides leasing flexibility and reducing the costs provided, but purchase allows you to build wealth and further control your housing costs.

💰 Consider real estate mortgage points. You can get a lower mortgage rate through purchase Mortgage pointsWith each point costs 1 % of the total loan amount. One mortgage point is equal to a decrease of 0.25 % in the mortgage rate.

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