Looking for a low mortgage rate? Pay attention to these 3 upcoming dates
Mortgage interest rates plummeted to near-record lows in 2020 thanks to the pandemic and interest rate cuts courtesy of the Federal Reserve. Since then, however, buyers and those looking to refinance haven't been as fortunate. With a combination of decades-high inflation and multiple interest rate hikes designed to tame it, mortgage interest rates reversed their trajectory and hit their highest point since 2000 last summer.
However, while not nearly as low as they've been, there have been some encouraging developments so far in 2024. Rates are already nearly a point lower than they were toward the end of 2023, and that's absent a formal reduction to the federal funds rate. And there's new optimism that rates on home loans could drop even further, possibly in the weeks and months to come. For both buyers and owners looking to refinance, then, it's important to know when to expect these potential changes.
To that end, below we gathered three important upcoming dates that could portend significant mortgage rate cuts to come.
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3 upcoming dates that could affect mortgage rates
The timing of your mortgage application plays a key role when looking for the lowest rate possible. So, you'll want to closely monitor the following dates this summer:
July 11, 2024
The last two inflation reports released by the Bureau of Labor Statistics have shown a slow but steady drop in the inflation rate, moving from March's 3.5% to April's 3.4% and then down from there to 3.3% in May. If the report for June – scheduled to be released on July 11 – shows yet another drop, it could spark renewed market optimism and a reduction in interest rates, including for mortgages. While a formal rate cut would be preferable for borrowers, economic indicators like a lower inflation rate could nudge lenders to start offering slightly lower rates in anticipation of an official reduction. So pay attention to this date.
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July 31, 2024
The Federal Reserve will conclude its next two-day meeting on Wednesday, July 31 and, with it, will announce its next steps regarding interest rates and the fight against inflation. If the inflation report released on July 11 is an encouraging one, then, the Fed could potentially announce its first rate cut of the year. Or, they could simply hint at one to come (as they have been). Either move could affect what mortgage lenders offer borrowers. So if you have a home that you're ready to buy, this could be a smart time to consider acting.
August 1, 2024
The Federal Reserve won't announce its next rate move until 2:30 PM ET on July 31, giving lenders and the market very little time to react. But the next day, August 1, could see significant movement in the rate climate, depending on what happened the day prior. By August 1 the Fed's moves (or inactivity) will have had a chance to reverberate through the wider rate climate, potentially giving borrowers a chance to capitalize by locking in a lower rate. So you should be prepared to lock in a rate on this date, even if it means having to unlock and lock in a better, lower one before closing.
The bottom line
Mortgage rate movement is often full of speculation and there are a variety of factors involved. With a new inflation report and Federal Reserve meeting scheduled for July, however, and the reverberations from that potentially felt dramatically on August 1, homebuyers and owners looking to refinance should mark their calendars for these dates now. And, start shopping for a lender to utlize in advance so that you're best positioned to take advantage of any positive rate action.
