The real estate and mortgage world lit up last week after Federal Reserve Chair Jerome Powell spoke at Jackson Hole, hinting at a possible rate cut in September. Markets immediately reacted, with mortgage rates dipping in response. But what does this actually mean for buyers and agents between now and then?
At Morgan Financial, we believe it’s important to break this down clearly so you can have informed conversations with your clients.
Why Markets Reacted
Powell struck a more dovish tone—leaning toward lowering rates for the first time in years. While the Fed doesn’t directly set mortgage rates, their policy heavily influences borrowing costs across the economy. Traders immediately priced in an 85% chance of a September rate cut, which is why mortgage rates improved almost instantly.
What to Watch Before September
Key economic reports—like unemployment data and inflation numbers—will play a huge role in shaping the Fed’s decision. If unemployment rises or inflation cools faster than expected, the Fed may cut sooner or deeper. On the other hand, stronger economic data could mean little to no movement.
Should Buyers Wait?
Here’s the catch: markets often “bake in” expectations before the Fed acts. In other words, waiting may not bring significantly lower rates—but it could mean higher competition and fewer options when everyone else rushes into the market. Buyers who act now can lock in today’s lower rates and still refinance later if rates improve.
The Takeaway
For agents, the message to clients is simple: don’t gamble. Encourage buyers to focus on the home they want and the long-term benefits of ownership. Rates may shift, but locking in now protects them from sudden spikes—and gives them options if the market improves later.
At Morgan Financial, our team is here to guide you and your clients through every rate shift and market change. If you’d like to discuss the best strategy for today’s market, contact us today. Reach Out today!
