Impact of the Fed’s September 2024 Rate Cut on Mortgage Rates and Housing Market
The decision to reduce the Fed Funds Rate on September 18, 2024, was substantial, but we won’t see the trickle down effect on Mortgage Rates immediately. The Fed is expected to continue to lower the Fed Funds .25% rate at the next two meetings, which take place November 7-8 and December 17- 18, creating a full 1% reduction in 2024.
These cuts can take several weeks to trickle down to Mortgage Rates, since the impact is indirect. Mortgage rates are set by the Bond Market, in which mortgages are sold in the form of Mortgage-Backed Securities. Cuts to the Fed Funds rate cause market confidence, which helps lower mortgage rates. Oftentimes, mortgage rates fall before a Fed meeting in anticipation of a specific cut.The Fed Funds rate directly impacts the prime rate, which is approximately 3% over the Fed Funds Rate, making the cost of borrowing money more affordable for businesses and investors.
To sum it all up: As a buyer, you may want to consider buying now before the rates drop and the market is infiltrated with buyers again. More buyers means more competition for homes. You can always refinance later when rates drop! Seasonally, the fall and holidays are the best time for buyers to get the best prices and less competition!
For sellers, this information suggests positive developments on the horizon, with new opportunities arising as we anticipate an increase in prospective buyers becoming more active during this time.
If you’re considering buying or selling a property now or in the near future, now is the time to act. Contact us today, and we’ll guide you through the process, ensuring you make the most of this evolving market. We’re here to assist you every step of the way!
Jessica Carter Realty Group - Keller Williams Realty Ann Arbor
2144 S. State St, Ann Arbor MI, 48104 | (734) 945-2144