Inflation, Mortgage Rates, and the Lock-in Effect
After the December 2023 meeting, many investors and analysts had predicted six rate cuts and rapidly declining mortgage rates that would not only ease supply but bring back many homebuyers to the market and that housing affordability would improve. Many had anticipated a rate cut as early as March 2024. After the Fed’s January 2024 meeting, the odds of a March rate cut have declined significantly due to data showing continuing strength in the U.S. economy.
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