Should You Wait for the Fed’s Next Move? Here’s What You Need to Know

The Federal Reserve recently decided to keep policy rates unchanged, but there’s a buzz in the air that a rate cut might be on the horizon. Fed Chair Jerome Powell hinted that the first rate cut of the year could come soon, leaving investors and homebuyers eagerly awaiting the Fed’s next meeting. This development brings a big question for those considering buying or selling a home: should you wait for the potential rate cut, or is now the right time to act?

Understanding the Fed’s Latest Statement

The Fed’s recent statement reveals a shift in focus. While the Board is encouraged by the moderation in inflation, it’s also paying close attention to employment figures. Although unemployment has ticked up slightly, it remains historically low. The Fed reiterated that future decisions on rate cuts will be driven by economic data in the coming months.

Why Acting Now Could Be a Smart Move

Deciding whether to buy or sell now or wait for a potential rate cut involves several factors. Here are three key considerations to help you make an informed decision:

1. Pre-emptive Rate Changes: Mortgage rates often move in anticipation of Fed policy changes. This means that even before the Fed officially cuts rates, you might see mortgage rates adjust downward. Waiting might not be necessary to secure a favorable rate.
2. Market Competition and Home Prices: A Fed rate cut could ignite more competition in the housing market, potentially driving up home prices. Buying now, even at a slightly higher interest rate, could be more cost-effective than waiting for lower rates that may coincide with higher home prices.
3. Getting a Head Start with HUNT Mortgage: Starting the pre-approval process now can give you a significant advantage in a competitive market. At HUNT Mortgage, we offer a Pre-Purchase Commitment that goes beyond a typical pre-approval. This commitment fully underwrites your mortgage, giving you the confidence of a cash buyer and strengthening your offer. Additionally, our Pre-Approval process is fast and thorough, ensuring you’re ready to act quickly when the right home comes along. Being prepared with a Pre-Purchase Commitment or Pre-Approval can position you ahead of other buyers who may wait for the rate cut.

Tools and Resources to Help You Decide

We understand that deciding when to buy or sell is a significant decision, and we’re here to support you. We offer a variety of tools to help you weigh the potential costs of buying at a higher rate versus a higher price. Our mortgage calculators can provide valuable insights, and our team is ready to discuss your options.

Preparing for the Future

If you decide to wait for the Fed’s next move, now is still a great time to prepare. Consider setting up a pre-qualification consultation or applying for a HUNT Mortgage Pre-Purchase Commitment. These steps will ensure you’re ready to move quickly when the time is right, giving you an edge in a competitive market.

Background on the Fed’s Rate Decisions

The Federal Reserve plays a critical role in setting the federal funds rate and the discount rate, which influence the cost of overnight loans between banks. In response to the economic impact of the pandemic, the Fed lowered these rates to near zero in March 2020. As inflation surged in March 2022, the Fed began raising rates to control inflation. With inflation now moderating, the Fed has paused rate hikes for eight consecutive meetings.

Don’t Let Uncertainty Hold You Back

Whether you’re looking to buy, refinance, or tap into your home equity, don’t let the uncertainty about future rates keep you on the sidelines. HUNT Mortgage is here to help you navigate these decisions, and we’re still closing loans every day.

Connect with us today to explore your options and take the next step in your home-buying or selling journey.