What’s new in mortgage news? We recently looked at the Fed’s May decision and how that affected rates and the real estate market. To get a better idea of the situation, let’s take a look at what inflation has been doing and what that means for you. There are steps you can take when buying and selling to be less affected by these shifts.
What’s been happening with inflation and mortgage rates:
The Fed’s interest rate hikes have all been in an attempt to control inflation. Bankrate explains: “Keeping its inflation-fighting streak alive, the Federal Reserve has raised interest rates for the 10th time in 10 meetings . . . The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020.” They’ve been making significant process, but haven’t yet reached their goal of a 2% inflation rate. Still, they will likely pause their rate hikes in their meeting this month. What happens after that is yet to be seen. We know, though, that the Fed is determined to keep inflation moving in a downward direction.
What this means for you:
With inflation still high, daily expenses are high. We’ve all been dealing with higher prices on groceries, gas, and other consumer goods. As the Fed continues to make progress towards their inflation goals, we should feel some of this pressure let up.
When it comes to mortgage rates, interest rates have had some movement up and down but are generally still high. As inflation falls, though, mortgage rates should follow. Experts agree:
What experts are saying:
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), tells us that “Mortgage rates are likely to descend lower later in the year as the consumer price inflation calms down.” Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), agrees that rates will slowly lower: “We continue to expect that mortgage rates will drift down over the course of the year as the economy slows.”
It seems probable that inflation will continue to inch down, and that rates will then follow. These changes will not be quick, though. If you’re planning to buy a house this year, you should be prepared to deal with high rates.
Luckily, there are ways to insulate yourself from the effects of high inflation and high mortgage rates.
Set yourself up for success regardless of market changes:
Whatever happens with inflation and mortgage rates, you can set yourself up for financial success by going to a cash buyer like MarketPro Homebuyers when it’s time to sell—especially if your house is distressed. When you get cash for your current home from a cash buyer, and you skip the commissions and fees and you don’t spend a dime fixing up your house, you’re then able to put more money down on your new home. This can dramatically decrease your interest payments over time, meaning that mortgage rates won’t affect you as strongly.
At MarketPro, we’re a dependable source of a quick sale, no matter what’s happening. You can sell when you need to and get the cash you need, all without worrying too much about rates. More cash in your pocket is more freedom from the changing market.
Work with MarketPro:
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania or Florida, we’d love to show you how easy and stress-free the sales process can be with a cash buyer. Contact us today for a same-day, no-pressure quote.