First American Senior economist Sam Williamson is one of the market observers who say that the Federal Reserve Leave the bench market rates unchanged after the meeting on Wednesday. This would put an end to a series of three straight cutbacks, a total of 100 BPS, back to December, giving the policy percentage a reach of 4.25% to 4.5%.
The CME Group’s Fedwatch -Tool On Tuesday showed that 99.5% of interest rate traders expect the rates to remain unchanged this week. However, there is a debate about the direction of the policy for the next two FED meetings. About 30% of traders believe that a reduction of 25 bps will take place in March, while 42% predicts one in May.
“With the economy on a steady course and inflation still increased but gradually cooling, the Fed has increasingly taken over a more cautious path back to the neutral percentage,” Williamson said in written comments. “Policy makers are probably also waiting for greater clarity about the potential inflation risks with regard to the proposed federal policy before announcing extra cuts.”
The federal policy proposals that are referred are the expected rates of President Donald Trump for imported goods. The Trump government is said to be in the beginning to set 25% rates in Canada and Mexico in Saturday. These can lead to higher inflation levels and will probably hinder efforts from housing builders to increase the pace of construction.
Although the mortgage interest rate has graduated in the immediate aftermath of Trump’s return to the White houseIt can be deep in 2025 before the loan costs fall below 7% or get closer to 6%, as many prognosticators of homes have called.
“Expectations for stronger growth in the future, worrying about restoring inflation and policy uncertainty will probably continue to borrow the costs of the economy in the economy to start the year,” said Williamson. “The mortgage interest rate could float modestly in the second half of the year, because the market gets more clarity about the prospects for monetary policy. Nevertheless, 2025 can still see a modest recovery, because more buyers adapt to the ‘higher’ speed environment. “
Other affordability statistics do not offer much lighting to potential home buyers. The prices continued to rise throughout the country in November, according to the latter S&P Corelogic Case-Shiller Index was released on Tuesday. The index reached a record high for the 18th consecutive month and the growth of annual year accelerated to 3.8% in November, an increase of 3.6% in October. Price profits in the largest American cities remain well above 4%.
Altos Research However, data indicates a potential fall in price for the coming spring purchasing season. The current median American house price of $ 421,000 has fallen by 0.7% year after year, while the median price for new sales has risen by approximately 2% of recent times. Moreover, Altos founder Mike Simonsen notes that the share of entries with a price reduction has grown from 31% to 33% in the past year.
“By the end of February we have the most price reductions of every February in many years,” Simonsen wrote Monday. “These are houses that are now on the market, without offers. They take a price reduction and hopefully get an offer in February. That deal closes in March and in April you should hear the headlines that reflect the weakness that we can see in the active market data. “
