What’s the latest prediction for interest rate cuts from The Fed?

What’s the latest on the Fed’s September meeting?

A recent article from Forbes detailed the current economic climate, and had a few takeaways on what the Fed is going to do at their September meeting.

First, there were rumors of an emergency Fed rate cut early last week. These turned out to be completely unfounded and remains an extremely unlikely scenario for the Fed to pursue.

The odds of the Fed implementing a single 25 basis-point cut at the September meeting sits at 52.5% and the chances of a 50 basis-point cut at 47.5%. This is a bit of a reversal from previous readings. There was a better than 80% chance of a 50 basis-point cut as recently as a week ago.

The upcoming inflation reports will likely inform how quickly the Fed needs to cut rates. A hot report could cause the Fed to continue the pause, while a really cool report could actually cause concern. We’ll have better data to work off of in the coming days, and that will likely give the market a clearer direction.

Which Midwest housing market is heating up?

According to data from July 2024, the hottest real estate market is known better for children’s clothing than it is for high-rises and developments.

Osh Kosh, WI was the most active market in the country last month, and for good reason. Osh Kosh offers homes with a median list price of $374,000, over $65,000 less than the national median. Affordable homes combined with a tranquil setting makes this small Wisconsin city a desirable location.

Hannah Jones, a senior economic analyst at Realtor.com, stated, “Situated on Lake Winnebago, Oshkosh offers buyers affordability in an idyllic setting.”

According to a local real estate expert, competition for homes in Osh Kosh is heating up. Chris Siamhof, a real estate agent with Berkshire Hathaway HomeServices, said, “Clients are waiving home inspections, offering appraisal gap coverage, letting owners rent back, or even paying the owner’s property taxes for a year—anything they can do to make their offers stand out. And we are still seeing some houses going for up to $30,000 over asking.”

What will happen to the Phoenix market when rates drop?

Buyers and sellers in and around the Phoenix, AZ market have been waiting for mortgage rates to cool off further, but what will happen to the market when it does? A recent article from Axios did a deep dive into the Phoenix market.

Pending home sales this year through July 2024 were 8% lower than last year according to data from Phoenix Realtors, and 36% of homes in the Phoenix area saw a price cut in May 2024. Both of these metrics indicate that homebuyers are staying on the sidelines right now.

If rates drop further, home sellers who are currently rate locked may be more incentivized to list their home. Greater inventory would help keep prices lower, but there may be an initial surge of activity. According to the article, Phoenix is still short of homes, and even a sudden surge in inventory isn’t likely to significantly lower home prices.