Mortgage Rate Predictions: Will the Fed Keep Postponing Interest Rate Cuts?
The Federal Reserve is involved in “red light, green light” game Reduce interest ratesEssence
On Wednesday, the Fed’s decision -making agency voted Keep the benchmark interest rate unchangedSuspended a green price reduction path in September.
This means average Mortgage rate Will it be trapped nearly 7 % in the short term? This depends entirely on a factor: economy.
Since the beginning of the second term, President Donald Trump is moving forward Policies around immigration and tradeExperts believe that this is inflation.
“When the burden is nearly ten years, higher tariffs and restricted immigration policies will increase the cost of buyers.” Matt WalshMoody’s analysis of housing economists.
Although Trump has repeatedly stated that he will reduce the mortgage interest rate to 3 % (this indicates that the country is Serious economic crisis), President did not set a housing loan interest rate. Even the Fed’s policy decision Indirectly affecting the mortgage marketEssence
Regardless of the president’s commitment to reduce the cost of borrowing, if the inflation rate remains high, interest rates will be. The mortgage interest rate is mainly driven by the mobile market, especially the 10 -year fiscal yield. If the inflation is finally cooled and the Fed restores the relief rate, even in the next step of the Federal Reserve, it may reduce the yield and mortgage interest rate of the Treasury and mortgage loan.
Why does the Fed reduce interest rates?
The Federal Reserve Chairman Jerome Powell said in his speech after January 29 that officials were not in a hurry to reduce interest rates, and the central bank was waiting for whether the inflation was relieved. Conventional PAT allows the Federal Reserve to evaluate the impact of the policy formulated by the Trump administration.
Logicly, today’s decision will cause a pause of extension, not a month’s skip. Matt Graham (Matt Graham) The “Mortgage News Daily” said that if inflation has dropped sharply in the next two months, the earliest reduction tax rate will be in March. However, most Investors are betting It is not until the late spring or early summer that another reduction will appear.
The Fed has faced Trump’s pressure. Trump recently demanded a decline in interest rates, even if the president has no direct power to achieve this goal. In addition to expressing opinions, the President’s influence on the central bank is to fill the vacancy of the board of directors by named the person named.
Although Trump can appoint members of the Fed’s board of directors, their views on monetary policy are consistent with their own views, he can only appoint new appointments in early 2026.
Will the interest rate of mortgage loans in the spring purchase season decrease in time?
Earlier last year, many economists predicted that the interest rate would drop to 6 % by the end of 2024. However, due to Trump’s reelection and the transfer of the Fed’s reduction rate, the prediction of mortgage interest rates is even more pessimistic.
Fannie Mae Now it is expected to be average 30 years of fixed mortgage loan interest rate Until early 2025, it held more than 6.5 % of the shares. At the same time, Moody’s Walsh is expected to have an average of less than 7 % in the year average.
Nevertheless, economic data next month can always change the equation. “If economic data starts to weaken, we may have seen the peak interest rate of that year.” Logan Mohtashami (Logan Mohtashami)Chief Analysts of Housingwire.
In CNET 2025 mortgage forecastMohtashami pointed out that in 2025, it is still likely to be within 6 % of interest rates. However, if Trump’s policy charging inflation may increase government debt deficits, this will be difficult to achieve, especially in the spring purchase season in a timely manner.
See the housing market in 2025
Today’s Unbearable housing market Results from high mortgage loan interest rates Long -term housing shortageExpensive house prices and purchasing power due to inflation.
🏠 Low housing list: The balanced housing market is usually supplying five to six months. Today, most of the markets are about half of them. according to Freddie MacWe still lack about 3.7 million houses.
贷 Lift the mortgage loan Speed rate: In early 2022, the mortgage interest rate reached a historical low of 3 %. As the inflation rate has soared, the Fed has tamed interest rates and the interest rate of mortgage loans has increased by more than doubled. In 2025, the interest rate of mortgage loans is still very high, and millions of potential buyers will start from the housing market.
应 Treat rate lock effect: Since most homeowners are Lock the mortgage interest rate For people less than 5 %, they are unwilling to give up the interest rate of low mortgage loans. There is almost no motivation to list the sale of houses, and the remaining resale inventory.
🏠 High price high: Although the demand for house purchase has been restricted in recent years, house prices are still high due to lack of inventory. The median house price in the United States is $ 427,179 Redfin said that in December, an annual increase of 6.2 %.
膨 steep inflation: Inflation means increased the cost of basic products and services, thereby reducing purchasing power. This also affects the mortgage interest rate: When the inflation rate is high, the loan party usually increases the interest rate of consumer loans to ensure profit.
Which buyers should know
Entering entry is never a good idea Buy a house I don’t know what you can afford, so please build a clear housing budget. This is what experts recommend before buying a house:
评 Establish your credit score. Your credit score will help determine whether you are qualified to obtain a mortgage loan and what interest rates. one Credit score In the case of 740 or higher, it will help you get lower interest rates.
付 Save greater down payment. Larger down payment You are allowed to take out a smaller mortgage loan and get a lower interest rate from the loan. If you afford it, at least 20 % of the down payment will also eliminate private mortgage insurance.
款 Shopping mortgage loan. A loan offer from multiple mortgagers can help you Higher negotiation rateEssence Experts suggest that you get at least two to three loans from different lenders.
💰 Consider renting a house. choose Rent or buy a house Not only compare monthly rent with mortgage payment. Leasing provides flexibility and reduced early costs, but purchases allow you to establish wealth and have more control over housing costs.
💰 Consider the mortgage point. You can get a lower mortgage interest rate by buying Mortgage pointA total loan amount costs 1 % per point. One mortgage point is equal to your mortgage interest rate decreased by 0.25 %.
