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3 mortgage moves to make before the July Fed meeting
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While inflation has cooled in the past few months, at 3.0%, the current inflation rate remains above the Federal Reserve’s target rate of 2%. As a result, the Fed has kept its benchmark rate elevated. And while mortgage rates have also fallen slightly in the past few months, today’s average 30-year mortgage rate is 6.86% (as of July 22, 2024) — a rate that remains significantly higher than the sub-3% mortgage rates many buyers locked in during the pandemic.
Because mortgage rates remain relatively high, some would-be homebuyers have been waiting on the sidelines to see if rates will fall and mortgages will become less expensive. If inflation continues to trend downward, this could become a reality, as the Fed is expected to cut its benchmark rate at some point in 2024. In fact, with inflation continuing to decline, there’s a small chance that the Fed could cut rates at its July meeting, though the expectation is that any Fed rate cut that happens will occur later this year.
So, if you plan on buying a home after the Fed meeting, which is slated to be held from July 30 to 31, it makes sense to start preparing now.
Start comparing the best mortgage loan rates available to you now.
3 mortgage moves to make before the July Fed meeting
If you’re planning to buy a home soon — or are a homeowner looking to refinance your current mortgage loan — here are some moves experts say you may want to make before the upcoming Fed meeting.
Start shopping around
Mortgage rates and fees vary by lender. As a result, it’s crucial to shop around for a mortgage to ensure you get the best rate for your financial circumstances.
Melissa Cohn, regional vice president at William Raveis Mortgage, recommends shopping the market for rates now and then [meaning after the July Fed meeting]. When you’re ready to formally apply for a mortgage, Cohn says to find out the new mortgage rates being offered by the banks with the best rates from the initial inquiry.
John Aguirre, mortgage loan originator at Loantown, recommends asking this question while shopping around: What is the rate, and what are all the bank fees associated with it?
You may also want to read online reviews to see what other people have said about their experience with the lender, Aguirre says. If a lender has overwhelmingly bad reviews, it could be a sign to steer clear of them.
“I’ve seen people trapped in dreadful refinance applications with banks that never came to fruition. By the time they moved to a new bank, they were stuck with a higher rate,” says Aguire.
It’s also important to pay attention to how responsive a loan officer is, according to Aguirre.
“If your loan officer is unresponsive to rate quote requests, imagine how bad they’ll be if you actually take out a loan with them,” Aguirre says.
Learn more about today’s top mortgage loan options online now.
Work on improving your credit score
Strengthening your credit file before applying could help you find a cheaper mortgage in today’s high-rate environment.
Aguire says consumers should review their credit scores to ensure they have the strongest credit possible. That way, they’re able to take advantage of the best refinance [or purchase] rates.
Some steps you can take to boost your credit score include paying down debt and reviewing your credit reports for errors. In addition, try not to open new credit accounts a few months prior to applying for a mortgage, as doing so can lead to hard inquiries on your credit reports, which can lower your score.
Determine which mortgage product you plan to use
Another move you can make in advance of the Fed meeting is to learn how different types of mortgages work. That way, you can select the option that best aligns with your budget and goals.
For example, two common options are fixed-rate mortgages and adjustable-rate mortgages (ARMs). A fixed-rate mortgage has a rate that remains fixed through the life of the loan, which protects you against increased costs due to future rate increases. Meanwhile, an ARM has a rate that remains fixed for a certain period of time and then fluctuates based on the overall rate environment, which can be beneficial if rates fall.
“We believe the benefits of a fixed-rate mortgage outweigh the advantages of adjustable-rate options, as they provide more stability and predictability for consumers,” says Jason Obradovich, a chief investment officer at mortgage lender New American Funding.
Cohn says whether an ARM or fixed-rate mortgage is best depends on how long you plan to stay in your new home.
“With the expectation that rates will decline over the next two years, many buyers are looking at the lower rates that adjustable options offer. If you expect to only live in the new home for five to seven years, choosing an ARM might make sense,” says Cohn.
But if you prefer stability and security, a 30-year fixed loan is the optimal choice, Cohn says.
Should you lock in a mortgage rate before the July Fed meeting?
Whether or not it makes sense to lock in a mortgage rate before the upcoming Fed meeting depends heavily on your financial situation. If you can comfortably afford a mortgage at today’s rates, it could be a wise move to lock in a rate now rather than waiting for mortgage rates to fall. After all, locking in a rate on a fixed-rate mortgage loan now means you won’t be impacted if mortgage rates increase.
Some experts believe mortgage rates could fall 0.25 to 0.75 % when and if the Fed cuts rates for the first time in 2024. In fact, some experts believe the reason why mortgage rates have been failing recently is because the market is anticipating a rate cut.
“Over the past couple of weeks, we have seen interest rates, including mortgage rates, drop as the market anticipates that the Fed will move in September and possibly once or twice more later this year,” says Obradovich.
“We expect interest rates will continue to fall throughout 2024, as inflation appears to be aligning more closely with the Fed’s target, and this trend is expected to continue,” Obradovich says.
The bottom line
It’s impossible to predict exactly what will happen to mortgage rates after the July Fed meeting. As a result, Aguirre recommends that homebuyers avoid trying to time the market. Rather, you should make sure the purchase accomplishes the goal you want, Aguirre says, and if it does, it makes sense to act on it before things move. And, to better prepare for purchasing a home, you should take steps to prepare, like shopping around and improving your credit, regardless of what the Fed does.
“The decision to buy a new home shouldn’t be tied to the Fed,” Cohn says. If you are considering a purchase now, Cohn recommends doing it [as long as it fits your budget]. That’s because she believes if mortgage rates continue to go down, home prices will rise. And even if rates fall after you purchase a home, Cohn says you can always refinance your mortgage later.
CBS News
Climate groups working to mobilize early voters and track new climate voters in battlefield states
Across Philadelphia, dozens of silver haired, climate-conscious canvassers are going door to door in the last weeks before Election Day, leaving green slips of paper with guides on how to register to vote this year.
“It’s the most consequential one that I’ve been a part of,” climate canvasser Daniel Carlson told CBS News. “I’ve been voting for four decades.”
Carlson is part of Third Act, a climate activist group for people over 60. The group is trying to mobilize voters on climate change in an election that’s been dominated by worries about the economy, immigration and abortion access.
CBS News / Seiji Yamashita
CBS News polling has found climate change is “not a factor” for 32% of voters in the presidential race, but for millions, it’s their top issue, according to the Environmental Voter Project, another non-profit group; EVP works on identifying climate-minded voters and get them to the polls.
In particular, EVP focuses on low-propensity climate voters — those who did not vote in the last presidential election and are concerned about climate change.
Nathaniel Sinnett, executive director of EVP, said, “In Pennsylvania, we’ve identified 245,000 of these voters,” Sinnett told CBS News, and he’s found equally high numbers in other key battleground states where EVP is active. In 2020, Joe Biden’s margin of victory over Donald Trump in Pennsylvania was 80,555.
EVP says it uses predictive modeling and data analytics to identify millions of climate-focused registered voters, and then it relies on voter files to target its efforts toward environmentalists who are registered to vote but who have not been voting.
“We really like what we’re seeing in the early voting, nearly 130,000 first-time climate voters have already cast ballots in the 19 states where we work,” says Nathaniel Sinnett, executive director of the Environmental Voter Project, or EVP. Five of the states where EVP is tracking voters are battleground states — the group says it has identified hundreds of thousands of low-propensity climate voters in these battleground states:
- Arizona: 229,311
- Georgia: 491,369
- Nevada: 108,694
- North Carolina: 266,227
- Pennsylvania: 245,206
Sinnett acknowledged these models and data don’t guarantee a climate vote is a vote for the Democratic ticket, but early voting and environmental voters have historically leaned liberal.
EVP tracks the voters it’s identified and whether they’ve cast a ballot, and on a more granular level, the group is tallying the climate-focused voters they’ve found who did not vote in 2020 but cast a 2024 ballot during early voting this fall. Based on early voting returns, according to Sinnett, in some battleground states, climate voters are turning out at higher rates than the general electorate.
EVP has identified nearly 230,000 first-time climate voters in Arizona in 2024, and as of Oct. 25, EVP has seen 5,514 of those individuals cast early ballots. In 2020, Arizona was decided by fewer than 11,000 votes. The group is seeing similar returns in other battleground states and hopes its efforts will help nudge climate-friendly candidates to victory.
“Climate voters are not the largest voting bloc in the country,” said Sinnett. “But this fall, climate voters can have a real impact on the margins, and in an election where all seven swing states are statistically tied, a little movement in the margins will decide everything.”
CBS News / Seiji Yamashita
Third Act is another environmental group working on turning out climate-concerned voters, but its focus is on older Americans. It was founded by Bill McKibben, an environmentalist who has written more than a dozen books on the topic and has organized climate protests all over the world. Although climate politics is often associated with young voters, McKibben thinks his generation has a unique perspective, having seen the civil rights movement and the conservation movement of the ’60s, ’70s and ’80s.
“In the course of our lifetimes, we’ve seen a lot of change, and much of it for the better. You know, when I was born, Kamala Harris and her husband couldn’t have been married in half the states.”
Like EVP, McKibben and his group have run into some reluctance by many climate-minded Americans to show up to the polls.
“They care deeply about the climate, but maybe they’re just decided there’s nothing that can be done, or whatever it is. So, we’ve got to reach them and just say this isn’t everything,” McKibben told CBS News. “The purpose of an election is not salvation.”
Environmental salvation is likely on Carlson’s mind, though. The 60-year-old is a pastor by day, and he decided to make the trip from Schenectady, New York to Philadelphia to doorknock for the first time — he says he’s trying to do his part to help boost turnout in a consequential election.
“The world that my generation will leave to the next generation is definitely compromised and damaged in some really considerable respects, but I want to do all that I can to be of as much help as I can to the generations that are to come.”
Helen Grady, 85, a former Philadelphia school teacher, was also motivated to start canvassing when she heard many college students were considering not voting.
“That really angers me, and it frustrates me when I hear somebody say, there’s no point to voting because both sides are broken,” she told CBS News. “I used to tell my high school students, ‘you don’t vote, you can’t complain.'”
AI is helping a philanthropic organization give $1,000 cash payments to Hurricanes Helene and Milton victims in North Carolina and Florida who need it most.
About 1,000 households in areas hit hardest by the hurricanes will start receiving emergency payments from nonprofit GiveDirectly this week. Unlike other forms of assistance, the cash funds are transferred rapidly and doled out with no strings attached.
GiveDirectly said it started sending payments to households it identified as being both low-income and located in parts of the U.S. that were devastated by the storms. It does so using a Google-developed AI tool to identify particular areas with both high concentrations of poverty and storm damage.
After identifying hardest-hit, low-income households, the nonprofit then alerts recipients at those addresses that they are eligible for the payments remotely through a smartphone app powered by Propel, an electronic benefits transfers app used to manage SNAP benefits.
“We use satellite imagery that shows us flooding and roof damage and we overlay that with data on high-poverty areas,” Dustin Palmer, who runs GiveDirectly’s U.S. programs, told CBS MoneyWatch. “We look for intersection of damage and areas that have high poverty as a community.”
The first payments are being disbursed Friday and through the weekend, and will be deposited through the Propel app’s virtual debit card.
The approach is designed to get cash to people who need it the most, as fast as possible.
GiveDirectly is raising funds for second round of aid
“$1,000 is a meaningful enough amount to help people get out of the house if they need to, and get supplies,” Palmer said. GiveDirectly is currently raising funds in order to administer another round of aid to hurricane victims.
He did note the limitations of relying on a smartphone and app to make the payments, but said the benefits trump the drawbacks.
“We are aware of limitations of that and we’re comfortable with the trade-off of having really high confidence that people are low-income and ready to receive the money right away. We are privileging that speed is of the essence in time of disaster,” Palmer said.
When the company administers larger, longer lead programs, it also offers in-person enrollment options that don’t require a mobile device, he added. Propel serves roughly 5 million of the 41 million people enrolled in SNAP benefits, or about one in four SNAP recipients.
Case for guaranteed income
West said one-time cash payments can be a huge help to families recovering from a disaster, but the money can make a more profound difference if it’s given for a sustained time.
Research on guaranteed income programs shows recipients spend the money on their needs, said Stacia West, founding director at the University of Pennsylvania’s Center for Guaranteed Income Research. “There is no one who can budget better than a person in poverty,” she said.
In a study tracking spending across 9,000 participants in more than 30 guaranteed income programs in the U.S., the Center for Guaranteed Income Research has found that the majority of the money is spent on retail goods, food and groceries and transportation.
GiveDirectly also plans to launch disaster preparedness programs in the U.S. to allow households to fortify their homes in anticipation of a hurricane, or evacuate, for example.
“With anticipatory action, we send money before a disaster. Giving people cash payments ahead of time lets people stock up on supplies to fortify their houses or move,” he explained. “It’s about being resilient to climate disasters.”
contributed to this report.
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Climate groups working to mobilize early voters and track new climate voters in battlefield states
AI helps organization send poorest households impacted by Helene and Milton $1,000
Driver charged in deadly high-speed chain-reaction crash on I-94
Climate groups working to mobilize early voters and track new climate voters in battlefield states
AI helps organization send poorest households impacted by Helene and Milton $1,000