We’ve always known that rates will drop when the economy slows down, and the recent announcement from the Federal Reserve that they are pausing rate hikes for a while is a good sign that lower mortgage rates may be on the way.
In their decision, the Fed noted several economic indicators that point to a cooling economy:
- Core CPI (inflation) is currently at 4.3% year-over-year, which has improved from the high of 6.6% in September of last year.
- The number of job openings went down to 8.8 million in July from 9.17 million in June, which is the lowest since early 2021.
- The unemployment rate in August rose to 3.8% from 3.5% in July, which is the highest it’s been since February 2022.
If this trajectory keeps up, which we think it will (check out this blog post to see why), we should see mortgage rates start to trend down and, more importantly, STAY down early next year.
For your clients who want to move quickly when rates drop, my suggestion is to have them start the loan process sooner rather than later. We can help them figure out a mortgage strategy and play with the numbers, so they feel comfortable, confident and ready to submit an offer when the time is right.
I’d love to walk you through the ways we educate and help our buyers prepare for when the market shifts.
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