It is time to check on the Federal Reserve System (the Fed) once again as they have made another important decision about interest rates. Spoiler alert: even no change can have a big impact on the real estate market. Interest rates can influence mortgage rates and with housing inventory low and interest rates at a peak, all eyes are on the Fed.
The agency has announced another pause, declining to raise or lower their interest rates this month. Let’s look at this pause, what it means for mortgage rates, and what it means for you if you want to buy or sell a house. We’ll also look at what to expect at the Fed’s next meeting.
What the Federal Reserve did in November:
The Fed met October 31–November 1 and announced another pause at the conclusion of their meeting. This is the second pause in a row, following September’s pause. Prior to this, the Fed hiked rates regularly for about a year and a half. Inflation has been falling in response to all those hikes, but it hasn’t met the Fed’s target of 2% as of yet.
What mortgage rates have been doing:
Mortgage rates have seen some slight ups and downs, but are still historically high, despite the two pauses. As you know, mortgage rates tend to move in the same direction as the Fed’s interest rates; a Fed rate hike tends to push mortgage rates up, and a cut might relax them. However, there are a number of other factors involved. Experts attribute these stubbornly high mortgage rates to our strong job market.
What happens next:
The Fed is happy enough with the progress they’ve made, for now, but they plan to take things as they come: “In light of the uncertainties and risks and how far we have come, the [central bank’s rate-setting] committee is proceeding carefully,” explained Fed Chair Jerome Powell.
The Fed indicated at their September meeting that they’ll likely do one more rate hike this calendar year, but that may or may not be necessary now: “I expect the Fed to keep the option for an additional future rate hike on the table, even if the odds it will need to exercise that option are low,” explained Danielle Hale, chief economist at Realtor.com.
Regardless of what happens in December, we don’t expect to see mortgage rates fall significantly this year. Many experts predict that the 30-year fixed rate will stay above 6% throughout 2024.
What this means for you:
Interest rates will likely stay high for quite a while, but high rates don’t have to hold you back from buying or selling a house. You can take steps to lessen the impact of a higher mortgage rate. When selling your home to buy another, you can use the equity in your current home to make a larger downpayment. The smaller your new mortgage is, the less you’ll be impacted by high rates! It’s also possible to buy now and refinance later when rates do drop.
When it really comes down to it, the best time to sell is when you need to sell. If you want to make a move despite high rates, you can sell to MarketPro Homebuyers and get cash for your home, even if it’s dated or needs repairs.
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. Contact us today for a same-day, no-pressure quote.