Housing industry split on impact of latest Fed rate cut

The

Fed’s
decision

followed
President-elect
Donald
Trump’s
recent
re-election,
with
voters
expressing
ongoing
concerns
about
inflation
and
economic
stability.
While
the
cut
aims
to
stabilize
borrowing
conditions,
housing
industry
experts
said
that
the
immediate
impact
on
mortgage
rates
may
be
limited
due
to
other
factors,
including
market
volatility
post-election.


Mixed
reactions
on
mortgage
rate
impact

Market
activity
in
response
to
the
election
has
driven
long-term
rates
higher,
according
to
the
Mortgage
Bankers
Association
(MBA).

“The
big
impact
on
rates
this
week
was
clearly
the
election,”
said
MBA
chief
economist
Mike
Fratantoni.
“As
results
rolled
in,
longer-term
rates
jumped
higher.
Investors
expect
somewhat
stronger
economic
growth,
higher
inflation,
and
larger
deficits.”

As
investors
processed
election
results,
expectations
of
stronger
economic
growth,
higher
inflation,
and
larger
deficits
pushed
longer-term
rates
upward.
  

“MBA
expects
that
mortgage
rates
will
remain
within
a
fairly
narrow
range
over
the
next
year,
with
mortgage
rates
moving
higher
on
signs
of
economic
strength
and
more
stimulative
fiscal
or
monetary
policy,
or
lower
if
it’s
the
opposite,”
Fratantoni
added.
“Housing
markets
continue
to
be
primed
for
a
stronger
spring
homebuying
season,
boosted
by
more
housing
supply
and
slower
home-price
growth.”

Comments are closed.