Fed Holds Rates Steady, Mortgage Rates Expected to Gradually Decline
Following the Federal Reserve's decision to maintain its benchmark rate, mortgage rates have begun to decrease, with further reductions anticipated by the end of 2024.
- The Federal Reserve announced its fifth consecutive rate hold, keeping the federal funds rate at 5.25% since July 2023.
- Inflation, although reduced from a 40-year high, remains above the Fed's 2% target, influencing mortgage rates.
- Mortgage rates have dropped more than a percentage point since peaking in October, with further declines expected.
- The Fed's dot plot forecasts three rate decreases by the end of 2024, potentially easing mortgage rates further.
- Housing market shows signs of optimism, with increases in new home construction and sales despite higher rates.
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