The Fed Pauses

Today is Fed Day! The Fed did announce a pause on increasing interest rates again, but they also said they are going to raise at least a few more times before the end of the year. I think it’s a strange prediction, but we’ll see what happens.

Now we know what the story is: at this point, they have done their press conference. The market looks like it is ending flat.

The Market is Being Stubborn

It’s crazy because the market (meaning the bond market in particular) is being very picky about what it’s moving on. Frankly, it’s making things pretty difficult.

Inflation CPI came out yesterday: it maxed out around 7%, now it’s down to around 4% with a target of 2%. So, it’s continually moving down, just like the Fed would say. Yes, it’s being a little more stubborn than expected. But it’s continually and steadily moving in the right direction. But the market is just not budging yet when it comes to interest rates.

We’ll see what happens. At some point, we are going to wake up and be at the inflation target, and then hopefully bonds will finally wake up and decide to drop so the interest rates can come down.

Best Timing to Buy a Home

In the meantime, I’ll say the same thing that I continue to say: If you’re waiting (along with everyone else) for interest rates to come down to a buy a house, just know that’s going to be a flood of people who are all going to want the same house you want.

It will be even more difficult – it’s already difficult to get a house at the moment because of the low amount of inventory. If all of a sudden we see a big improvement in rates, I can only image that’s going to make things even worse.

Look at Your Options

Again, I’ll reiterate: you need to be able to afford the house. So, I’m not looking to push someone into something that doesn’t make sense.

But if you can squeeze into the market and it makes sense, even if your mortgage is a few hundred bucks more than you were planning on spending – I still believe that now is the time. You can always refinance when rates come down. Otherwise, you are going to end up paying way more for a house if things are tracking the way we are all expecting at this point.

To summarize: Even though inflation is being stubborn and continuing to affect rates, it’s got to change at some point. Questions? Need personalized recommendations? Reach out to me so we can discuss your situation and potential financing solutions.