As many of you know, mortgage interest rates have stubbornly remained in the mid-to-high 6s and even low 7s.

However, favorable reports regarding inflation and labor of late have led Fannie Mae’s Economic and Strategic Research (ESR) Group to revise their forecast, which now calls for two rate cuts before the end of the year.

According to its July forecast, Fannie now believes that the Federal Reserve will likely cut rates in September and then again in December. That is a shift from June when, amid unfavorable inflation numbers, the forecast called for just one cut in December. However, two consecutive months with lower-than-inflation returns from the Consumer Price Index (CPI) report convinced Fannie economists to readjust to their previous rate cut expectations.

What does this mean for you? Let’s wait and see what August brings and if the forecast changes again. I am hopeful that Fannie Mae has it right! Please contact me if you have any questions.