The Fed kept interest rates the same on May 1, 2024.
This is a continued pause, as we saw in the March 2024 Federal Reserve meeting.
Inflation continues to above the central bank’s goal of 2%, which is why the Federal Reserve Committee is not dropping rates again at this time.
I had a closing two days after the announcement that rates were not going to change again, and the lender was talking to us about this a bit. He told us this truly is all about inflation, and interest rates really cannot come down before inflation drops more, or the Fed runs the risk of inflation skyrocketing, which would be a huge problem for our economy.
Jerome Powell, the chair of the Federal Reserve, stated this year started with three months of quicker-than-expected price increases. He said this means it will take longer than they expected for inflation to start declining again decline towards 2% that they are aiming for.
The good news is that he does not expect to raise rates, per a Reuters article on May 1.
For Baltimore mortgages, this should not affect interest rates much.
I have mentioned before how mortgage interest rates are determined by many factors. The Fed’s discussion on interest rate hikes or cuts can sometimes be one of them, but it is generally a small part. A lender I work with says that mortgage companies usually anticipate when the Fed will raise or drop rates, so weeks beforehand, their rates and terms usually already reflect a potential upcoming hike or cut.
If you are thinking about buying a home in Towson, Timonium, or the Greater Baltimore area, please contact me. I can connect you with a local trusted mortgage professional who, along with me, can help to guide you through your mortgage options as your buy your new Baltimore home!
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