Fed decision to pause rate hikes offers no relief for mortgages: Freddie Mac

No relief for mortgage rates anytime soon

Where mortgage rates head next depends on several factors, and the Fed's next move in interest rates is likely to be a major one. Powell that the central bank remains committed to bringing inflation down to a 2% target rate but gave some indication that they may soon reverse course on interest rates.

With September's pause on rate hikes, the federal funds rate continued to linger at a 22-year high of 5.25% to 5.5%. However, Powell said that if the economy evolves as projected, the central bank is anticipating that the appropriate federal funds rate level will be 5.6% at the end of this year – indicating at least one more rate hike. A drop in the rate to 5.1% is expected at the end of 2024 and 3.9% at the end of 2025 – half a percentage point higher than was forecast in June.

"Put another way, the median Fed forecast is consistent with just one 25 basis point rate cut from where we are now by the end of 2024," Realtor.com Chief Economist Danielle Hale said in a . "Already, the impact of tighter policy is acutely felt. Mortgage rates have steadied just below recent highs, but remain more than three percentage points above their pandemic-era lows.

For now, it seems unlikely that mortgage rates will budge below 6% anytime soon. The Mortgage Bankers Association is expecting the 30-year fixed rate to fall below 6% until the second quarter of 2024, according to its September Shopping for the best deal in a high mortgage rate environment can bring savings. If you're trying to find the best mortgage rate,

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