Federal Reserve discounts unlikely this summer. Are low mortgage rates still possible?

There is a wild amount of uncertainty in today’s economy, but one thing is clear: the Federal Reserve is not planned to reduce interest rates this summer. Mortgage rates,, Which have been suspended near 7 % over the past few months, may remain higher for a longer period.

On June 18, federal reserve officials Voice to leave borrowing prices unchanged To hold a fourth consecutive meeting. Detention of interest rates as it allows the Central Bank to evaluate how President Trump is establishing The unexpected tariff campaignFederal immigration and pieces affect both inflation and labor market.

Often, the central bank simply He says About future plans can cause a stir in the housing market. Mortgage prices driven by Bond investors And a group of other factors, that is, is not determined by the Federal Reserve directly.

“The mortgage market interacts quickly with uncertainty, and we have no shortage this summer,” he said. Nicole RothFrom the Rueth team with the mortgage of the movement.

Why does the Federal Reserve not reduce interest rates?

The Federal Reserve is supervised and supervised by US monetary policy under a double mandate to maintain price stability and the maximum employment. It does this largely by controlling the rate of federal funds, and the rate that banks borrow and give their money.

When economic growth is weak and unemployment is high, the benefit of the federal reserve Reduces interest rates To encourage spending and push growth. Reduction of interest rates can also be allowed to rise up, which is generally Bad for mortgage rates.

However, maintaining rates is high, increases The risk of staging jobs It would cause widespread financial hardship. If unemployment is nails – a real possibility High unemployment claims The Federal Reserve can be forced to implement interest rate discounts early than expected.

The federal reserve said in one of the most difficult sites in recent economic history. Ali WolfZonda and Newhomesource, the chief economist.

What are the expectations for interest rate discounts in 2025?

On Wednesday, the markets are looking for the Federal Reserve Summary of economic expectationsThat set discounts at a rate of 0.25 % in 2025, unchanged from previous estimates. But this is far from the content. Updated expectations indicate that the customs tariff will push prices up, indicating that consumers have not yet felt the full impact on these import duties.

“Everyone I know is expecting a significant increase in inflation in the coming months of customs tariffs, because someone must definitions,” Jerome Powell, head of the Federal Reserve, said at a press conference on June 18.

Inflation may push the central bank to abandon one (or both) of expected discounts in prices, which will keep the mortgage rates high.

Although Powell is still not binding on any specific time frame, financial markets still see a reduced interest rates Early in this fall.

Most housing market ExpectationsIt is already a fawn discounts at at least 0.25 %, and called for mortgage rates for 30 years to survive Above 6.5 % Throughout 2025.

“It is likely to be average rates Stay in a range of 6.75 % to 7.25 % Unless the Federal Reserve refers to multiple discounts and support their policy with data. ”

What are the factors that affect mortgage rates?

Mortgage rates Move for many of the same reasons that make home prices: supply, demand, inflation and even employment.

Personal factors, such as housing buyers Creditand Premium And the amount of home loan, also specifying the individual mortgage rate. various Types of loans and conditions Also vary Useful interest rates.

Politics changes: When the Federal Reserve controls the rate of federal funds, it affects many aspects of the economy, including mortgage rates. The rate of federal funds affects the amount of banks ’cost to borrow the money, which in turn affects the consumer banks to make a profit.

Economic inflation: generally, When inflation is highReal estate mortgage rates tend to be high. Since inflation comes out of the purchase force, lenders have put higher interest rates on loans to compensate for this loss and ensure profit.

I offer and demand: When the demand for real estate loans is high, lenders tend to raise interest rates. This is because they only have a lot of capital for lending in the form of household loans. On the contrary, when the demand for mortgages is low, lenders tend to reduce interest rates to attract borrowers.

Bond market activity: The mortgage lenders explain the fixed interest rates, such as the mortgages with a fixed rate, to the prices of bonds. Mortgage bonds, also called the mortgage -backed securities, are a package of real estate loans that are sold to investors and closely related to a 10 -year treasury. When the interest rates are high, the bond has a lower value in the market as investors buy and sell securities, causing high real estate interest rates.

Other main indicators: Employment patterns and other aspects of the economy affect the investor’s confidence, consumer spending and borrowing of mortgage rates. For example, a Strong job report A strong economy can indicate an increase in the demand for housing, which may lead to upward pressure on mortgage rates. When the economy and unemployment slow down, the mortgage rates tend to be less.

Read more: Check the truth: Trump does not have the authority to impose low interest rates

Is now a suitable time to get a mortgage?

Although the timing is everything in the mortgage market, you cannot control what the Federal Reserve does. “The prediction interest rates are almost impossible in today’s market,” Wolf said.

Regardless of the economy, the most important thing when shopping for a mortgage is to make sure that you can conveniently withstand your monthly payments.

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