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What could impact mortgage interest rates this fall?
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Mortgage interest rates have been on the move lately, with some good news for borrowers. The Federal Reserve’s first rate cut of the year on September 18 has started to push mortgage interest rates down. This change has given hope to many potential homebuyers who’ve been waiting for better rates.
While the Fed’s decision can shape mortgage rates, they’re not the only factor at play. Other elements may cause rates to rise or fall, sometimes in ways we don’t expect. Understanding them can help you decide when to buy a home.
We talked to three mortgage loan officers to get their takes on what could impact rates this fall. Below, we gathered what they had to say and what it could mean for your homebuying plans.
Start by seeing what mortgage interest rate you could qualify for here.
What factors could impact mortgage interest rates this fall?
If you’re considering a mortgage this fall, experts say these factors could influence your rate:
Economic indicators
The job market and consumer spending are key players to watch if you’re tracking mortgage rates.
Dean Rathbun, a mortgage loan officer at United American Mortgage Company, explains the connection: “Consumer spending is still keeping interest rates higher. If we [start to] see a slowdown in job markets and [rising unemployment, spending will drop].”
This spending decrease could lead to lower mortgage rates as the demand for home loans goes down.
On the other hand, when employment numbers are strong, it often leads to increased consumer spending. Joel Berman, a senior loan officer at Synergy One Lending, points out that this uptick in spending can drive inflation upward. This typically results in higher mortgage interest rates.
See how low of a mortgage rate you can currently secure online now.
Federal Reserve action
While the Federal Reserve doesn’t directly set mortgage rates, its actions still carry significant weight.
According to Berman, when the Fed adjusts the money supply or takes steps to manage inflation, it can have ripple effects on mortgage interest rates over time. The recent half-point rate cut in the Fed funds rate is a prime example, potentially signaling lower mortgage rates to come.
Looking ahead, mortgage experts are optimistic.
Josh Green, a mortgage loan officer at Barrett Financial Group, predicts confidently, “We’ll see more cuts in November and December. Mortgage rates [will likely] keep dropping through the rest of 2024 and into 2025.”
However, he cautions there’s a wild card: inflation. If it spikes again, “the Fed will be in a tough spot and likely have to pause [further] rate cuts,” Green says.
Global events
Rathbun advises watching world events, as it might give you clues about where mortgage rates are heading. Geopolitical tensions could cause money to move to U.S. Treasury bonds as a safe move for investors.
When investors buy more Treasury bonds, their yields typically fall. Lenders often use these Treasury rates as a benchmark for setting mortgage rates. Mortgage rates tend to follow suit when Treasury rates drop due to global events — potentially making borrowing more affordable.
Government debt
Government debt often pushes mortgage rates higher even when other factors hint they should fall.
Green sheds light on this complex issue: “The U.S. keeps issuing bonds to fund itself, and all those bonds flood the market.” This oversupply of government bonds drives up their yields, which in turn, keeps mortgage rates elevated.
Typically, “mortgage rates have hovered around 1.5% to 2% above the 10-year Treasury note,” he says. But the current glut of government debt has widened this gap beyond historical norms.
Green describes it as a classic supply and demand problem: too many bonds, not enough buyers. This imbalance is a key reason why mortgage rates aren’t tracking as closely to the 10-year Treasury as they have in the past.
The bottom line
While these factors — economic indicators, Fed actions, global events and government debt — all influence mortgage rates, there’s more to homebuying than securing the lowest interest rate. Current housing market trends are also worth considering.
Rathbun advises against waiting for mortgage rates to fall because “we have a very low amount of home inventory on the market for sale.” This environment can affect both prices and buying opportunities.
Despite these challenges, he emphasizes the long-term benefits of homeownership: “[It provides] security for your family [and the] potential for long-term appreciation, which is the largest wealth-building tool for [most] households.”
He also reminds us that buying a home at today’s rates doesn’t have to be a one-time financial decision. If rates drop in the future, refinancing could be an option to lower your monthly housing costs.
If you’re mulling over a home purchase, your next step is to speak with several lenders. They can help you understand your options, assess your financial readiness and navigate the complex factors influencing today’s mortgage market.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.