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Rate Drop

Happy Thursday – I hope you are doing well. If you watched the news this week, you noticed rates have dropped. The CPI report came in lower than expected and that was great news for current and future rates. At this point, it looks like inflation is finally coming down and so will rates. Please see below for current projections on fed rate raises/cuts.

This is great news if you are looking to buy a home but now timing is critical. As I have mentioned previously, outside of rates, inventory is our biggest issue. Once rates start dropping, there will be more buyers entering the market and this will drive up home prices due to competition. If you intend to buy a home next year, now is the time to get ready. You will be able to take advantage of lower interest rates and lower home prices if you act fast.

Market Expectations of Fed Hikes/Cuts

After this week’s CPI report, the market is now expecting the Fed to turn the car around and cut rates much sooner than previously forecasted. Of course, the market does not have to be right, but take a look at what the Fed Futures markets are now predicting:

  • January: Odds of a hike went from 30% to a 2% chance of a cut

  • March: Odds of a hike went from 14% to a 33% chance of a cut

  • May: Odds first cross 50/50 of a cut in May at 85%, was June previously

  • June: now 100% pricing in a cut, was July previously

  • December: There are now 4 cuts priced in by December 2024 from 3 cuts prior to the data

Weekly Newsletter – Please note this is always a recap of the previous week. Rates are actually better then this right now.

Stewart Sadler

Managing Partner

Cornerstone Mortgage Group

Georgia Residential Mortgage Licensee: 21412 • Company NMLS: 147913 • Individual NMLS: 147938

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