While inflation has cooled off over the past few months, today's inflation rate of 3.3% is still higher than the Federal Reserve's 2% target rate. As a result, the Fed, which was once expected to cut rates multiple times this year, has kept rates paused at a 23-year high instead to fight back against persistent inflation. In turn, experts now predict that only one rate cut will happen later this year.
'We assume mortgage rates would go down, but I don't think there would be a drastic move,' Younathan says.Find out how affordable the right mortgage loan could be today.When would mortgage rates react to a rate cut?Experts are divided on whether mortgage rates would fall immediately after any rate cuts that occur this year.'When the first cut happens, there will also be an immediate reaction from the bond market, and mortgage rates will drop,' says Cohn.