Mortgage applications rose for the second consecutive week as interest rates inched higher following the latest inflation data and Federal Reserve meeting. https://t.co/mvXkBLTTVs
— Mortgage Professional America Magazine (@MPAMagazineUS) June 19, 2024
That’s not necessarily the right move, Harris said, mainly because prices are likely to accelerate at a brisker clip than their current pace as soon as rates begin to fall.
“One of the things that we’ve been trying to do and be very intentional about is educating clients on how this could actually affect them over the coming months,” he said. “Whether it be 12 or 18 months, one of the things we want them to understand is that as rates drop, prices will continue to increase.
“I think the clients have been… wanting to move now and actually proceed rather than wait, so that’s good. What we’ve been telling clients all along is most of the investors in the space and the market didn’t anticipate the Fed to move much when they met last week, and they did not.”
Expectations of multiple rate cuts by the central bank before the end of the year have all but vanished, meaning borrowers should be prepared for rates to stay high for much longer than originally envisaged, according to Harris.
“They’re holding steady, which is something that we anticipated,” he said. “We understand that the Fed’s looking to get inflation closer to 2% before we really see any change there, and I don’t know that that happens between now and the end of the year, to be honest.”
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