Well the time has come, next week the Fed will cut interest rates. If you want some odds, there is about a 30% chance that they cut ½% and a 70% chance that they cut ¼%. If they do only cut ¼% I don’t expect much movements in interest rates honestly. The market has seen this coming for months by now. If they do cut ½% then I could see rates drop even more since that would be a bit of a surprise.

The Fed will meet next in November and then have a final meeting the week before Christmas. Both meetings they will likely cut interest rates again. That meeting in November is the day after the elections by the way. What I’ll say about this without delving too deep into politics is that the election won’t impact the Fed. We have seen at points during the year that both candidates have a lead in the polls and the market hasn’t reacted much at all. Mainly because every election throughout time and space candidates have promised to do this or that when they are elected only to do none of the things they promised. It’s only when a bill is on the presidents desk ready to be signed will you know how the market feels about a certain policy. Outside of that it’s all just noise.

What does this mean for you? Well potentially a lot of good things finally! We know that rates are going to keep steady at the worst and likely keep inching lower. How low it’s hard to saw. I’d say best case scenario is we could see the low to mid 5’s next year if the Fed keeps with their projections. From what the Fed has provided we should see 3-5 more cuts next year. There is already a lot priced into these rates so that is something to keep in mind. I know people are on the fence hoping that rates will drop in a straight line but that is not likely to be the case. That’s the great reason to buy now though, home prices are only going to go up so if you buy now you start gaining equity right away. Then if rates do drop you can refinance and get a lower monthly payment, win-win!

Recap:

-Likely ¼% cut at the Fed meeting on September 18^th

-Two more Fed meetings this year which they will likely cut again as well

-Election unlikely to impact mortgage rates

-3-5 more cuts are projected for next year