Market Update: Rates Trend Lower After a Busy Week; Existing Home Sales and Fed Interest Rate Decision Coming Up This Week

Blog posted On March 20, 2023

Mortgage rates had an eventful run of fluctuations last week. By Friday, rates were relatively unchanged from where they started the week but overall, they trended lower than the week before. There’s a lot coming up this week in housing market news starting with February’s existing home sales tomorrow morning. New home sales will be released later this week. The most important factor in terms of rate movement will be Wednesday’s Federal Reserve activities. Not only will the Fed decide on interest rate hikes, but it will also have important language in its statement that the market will be keying into. Additionally, the Fed will update its rate projections for the year, and we will hear from Fed Chair Powell in a Wednesday afternoon press conference. Historically, Powell’s press conferences have been very influential as the market pays close attention to any hints of future Fed moves.

First up, existing home sales. In January, existing home sales slipped 0.7% month-over-month. While this could have been a typical seasonal slowdown, it’s possible that sales were also hindered by low existing home inventory. In February, existing sales are expected to climb 5% month-over-month.

Next, the Federal Open Market Committee (FOMC) meeting. The FOMC meets to discuss rate hikes and other economic factors. In its last meeting, the Committee hiked rates by 0.25% to keep downward pressure on hot inflation. Experts are almost certain that the Committee will hike rates again, with a predicted increase of 0.25%. This would bring the benchmark interest rate to a level of 5%.

Finally, new home sales. New home sales soared in January, climbing 7.2% month-over-month. However, they’re expected to decline slightly in February.

Stay tuned for updates on this week’s highlighted reports throughout the week! If you have any questions, let us know!