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Here’s what you need to know about the upcoming changes in the interest rates and their impact on the economy:
- Federal Reserve policymakers are gearing up to lower interest rates for the first time in four years, signaling a shift in the economic landscape.
- Despite some sectors, like housing, showing signs of price hikes, the overall inflation rate has slowed down in recent months.
- The Consumer Price Index, after contracting for five consecutive months, has seen a slight increase, with core CPI rising unexpectedly.
- This rise in core CPI points towards a modest 25 basis-point rate cut by the Fed in their upcoming meeting.
- Speculation about a larger rate cut has dwindled, with experts predicting a more conservative approach by the Fed.
- The future holds the possibility of further rate cuts, with expectations of equal or larger reductions in the coming months.
As we navigate these changes, key economic indicators like inflation and mortgage rates are providing valuable insights:
- Core CPI, driven by rising costs in various sectors, has shown a slight uptick.
- The Federal Reserve’s preferred measure of inflation, the PCE price index, remains close to the Fed’s target of 2 percent.
- Mortgage rates have been on a downward trend, hitting their lowest levels since early 2023.
- Despite these favorable rates, potential homebuyers are treading cautiously, with listings still limited in many markets.
- Refinance applications have seen a significant uptick, more than doubling from the previous year, as lenders ease their standards.
- Lenders are adapting to the changing market conditions, offering broader refinancing options to meet growing demand.
As we move forward, it’s essential to stay informed and adaptable to the evolving economic landscape. The decisions made by the Federal Reserve and market trends will continue to shape the real estate industry. Stay ahead of the curve, capitalize on opportunities, and be prepared to navigate the changing currents of the market. The time for bold steps is now. Join us at Inman Connect New York and be part of the next chapter in real estate.
