Fed Pauses Rate Hikes as Inflation Cools, Lower Mortgage Rates Could Heat Up Housing Market

The Federal Reserve has paused interest rate hikes after aggressive increases in 2022-2023 to fight inflation. Rates are now steady with inflation cooling.

Mortgage rates don't directly follow Fed rates but are affected by economic outlooks. Rates have fallen from a peak of 8% to 7.07% currently.

Lower mortgage rates could help affordability for buyers and demand for sellers, benefiting the housing market.

However, increased demand could exacerbate low housing inventory. Prices are currently rising after months of declines.

Borrowers should shop mortgage rates, avoid adjustable-rate mortgages for now, and consider home equity loans to tap equity versus refinancing.