Interest rates have been a hot topic, and many people mistakenly believe the Fed recently dropped all rates by half a percent, but that’s not exactly true. Mortgage rates, which are tied to the bond market, have been trending down since the Fed announced rate cuts back on July 30th. Although the Fed cut rates by 50 basis points, mortgage rates had already dropped nearly 1% since then, falling from 7% to the low sixes. While last week's Fed decision was already priced in, further gradual rate decreases are expected, making homeownership more affordable.
The key takeaway is that rates will continue to decline slowly over the next few years, but with ebbs and flows. This is great news for both prospective buyers and those looking to refinance, as housing affordability is likely to improve in 2024.
