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### Mortgage Rates Reverse After Weeks of Decline
After a seven-week decline, mortgage rates have rebounded to around 6.7% for a 30-year fixed loan. Investors are closely watching the Federal Reserve’s interest rate forecast, amid concerns over a potential recession and uncertain trade policies. Fluctuations in the bond market, influenced by President Trump’s tariff policies and geopolitical tensions, are contributing to mortgage rate volatility.
### The Federal Reserve’s Role in Mortgage Rates
The Federal Reserve is expected to maintain current interest rates in their upcoming meeting, but economic indicators such as inflation, unemployment, and growth may lead to rate cuts in late spring or early summer. While Fannie Mae predicts rates will remain above 6.5% this year, lenders consider various factors, meaning rates could change based on economic shifts.
### Economic Uncertainty and the Housing Market
High mortgage rates and economic uncertainty may keep the housing market sluggish. Experts suggest that for significant buyer activity, rates might need to drop closer to 5.5%. While lower rates aid affordability, a shaky economy could maintain a cautious market.
### The Mortgage Market and Economic Policies
The Trump administration’s economic policies, particularly tariffs, are influencing Fed decisions. The Fed must balance employment and inflation, potentially delaying policy changes until more data is available. Tariffs’ long-term impact on inflation and mortgage rates remains uncertain.
### Outlook for the Housing Market
Mortgage rates are likely to stay above 6%, marking a new normal after pandemic-era lows. Buyers may need to adjust expectations, considering persistent housing shortages and inflation’s impact on purchasing power.
### Expert Tips for Homebuyers
Prospective buyers should focus on building credit, saving for larger down payments, shopping lenders, and considering mortgage points. These strategies can help navigate the challenging market and secure favorable terms.
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