30-Second Update:  Rates Are Low, Can They Go Lower?

Earlier this month, the Federal Open Market Committee announced that no foreseeable moves to interest rates were expected “for some time.”  Markets have now reversed their position, however, and now believe the Federal Reserve will likely cut rates twice in upcoming months (possibly September and January 2020).  According to CME’s FedWatch tool, futures trading indicated a 63% chance of a September rate cut and a 62% probability of another rate cut in January.  Since 1983, the average length of time from a rate hike to the next rate cut has been seven months.   With the most recent tightening occurring back in December, a September cut would be ten months apart, putting us closely in line with historical averages. 

Even with two possible interest rate cuts on the horizon, as of the week ending May 23rd, mortgage rates have fallen for the fourth straight week.  This marks the lowest level since January 2018.  This low interest rate environment is proving to be extremely beneficial to those looking to purchase a new home, in addition to homeowners looking to refinance into a lower interest rate, or pull cash out for home improvement or debt consolidation.