How did the market react to the Fed announcement?

Homes in Florida | mortgage rate news

The Fed kept interest rates steady

As expected, Federal Reserve Chairman Jerome Powell announced that interest rates will stay at their current levels. Powell also mentioned how inflation continues to be a challenge and has kept the Fed from cutting rates.

What was surprising was that Powell mentioned twice during his press conference that the Fed didn’t see a need to increase rates further. Powell also announced that the Fed would start to ease the shrinking of its balance sheet. The main tool of the Fed is interest rates, but they can also liquidate or acquire assets to stimulate or cool the markets. They’re still selling off assets, but they’ll go from $60 billion per month to $25 billion per month.

Most markets reacted positively to the news despite the lack of a clear timeline for rate cuts.

How did mortgage rates react to the Fed?

The national average rate for a 30-year, fixed-rate mortgage ended Wednesday down 0.1% to 7.41%*. The bond market saw a rally during and after Chairman Powell’s press conference, and that lead mortgage rates to end lower for the day.

The next key data point we’ll get is Friday’s employment report. Jobs data will provide an indication of whether or not we’re still seeing a hotter job market in the face of high interest rate or not.

Is the Florida real estate market cooling off?

According to recent home inventory data, the Florida housing market has seen a surge in new and existing homes.

As of this week, Florida has 5,600 active listings that include the word ‘motivated’ on Zillow.

Homes for sale in March 2024 were on the market for an average of 57 days before finding a buyer. Two years ago, homes were selling in only 24 days in Florida.

Redfin’s chief economist, Daryl Fairweather, stated, “Florida is very unique. It was one of the only markets that actually sustained price growth after interest rates went up, so I think this correction is a bit overdue.”

Prices have yet to slide dramatically, but this could be one of the early signs of the housing market flipping from a seller’s market to more of a buyer’s market in the coming months.

* National average rates accurate as of 5/1/24 from and are not advertised rates from Guaranteed Rate.

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