MMBBA Annual Conference

Last week, Patrick and I attended the Maryland Mortgage Bankers and Brokers Association annual conference in Annapolis. In addition to being a fun opportunity to catch up with other mortgage professionals, we were able to hear from the chief economist of the Mortgage Bankers Association (MBA) as well as its president.

Future Rate Cuts?

Michael Fratantoni, Chief Economist for the MBA, explained that the expected rise in unemployment will spur the Federal Reserve to cut rates in the latter half of 2025. The MBA forecasts that the risk to growth and the job market will be a bigger concern to the Fed than inflation, leading the Fed to resume cutting short-term rates in the second half of the year. This will eventually lead to only a slight downward trend in mortgage rates in the remainder of 2025. Most traders believe the Fed will make three 25 basis point reductions beginning in July.

Impact on Homebuyers

He also showed us how existing home inventory is up 3% from last year, and the same or more for new homes. What does this mean for homebuyers? Robert Broeksmit, President and CEO of the MBA, concluded that now is a good time to buy a home. Prices have stabilized, and we are moving from a seller’s market to a balanced market or in some cases one that is more tilted towards the buyer. It has been many years since we have seen that. Mortgage interest rates are relatively stable, so potential homebuyers can feel more confident in what to expect in a mortgage payment. In many transactions, buyers are not having to compete for houses and can include contingencies for home inspections and appraisals. If you are interested in starting your home-buying journey, feel free to contact me to look at numbers and scenarios.