“From the Fed’s perspective, the bar for easing is deliberately high,” Kushi said. “They’re trying to avoid reigniting inflation by prematurely cutting rates. This ‘wait-and-see’ approach reflects the complexity of today’s crosscurrents: tariff uncertainty, a still-resilient labor market, and inflation that’s moving in the right direction, but not quite there yet.
“Uncertainty is one of the biggest drags on the economy. Whether it’s policy, inflation, or global trade, uncertainty leads to hesitation. That’s true for consumers, businesses, and housing alike. Greater clarity may be the key to unlocking momentum.”
Kushi is optimistic that if the Fed can make rate cuts in the second half of 2025, those cuts will cause a decline in mortgage rates, which could begin to boost the home market in the fall.
“If the Fed does begin cutting rates later this year, we could see mortgage rates drift a bit lower,” she said. “That would provide some relief and help thaw parts of the housing market. But, even without significantly lower rates, we’ve seen a slowdown in home price growth nationally, which is giving household incomes a chance to catch up. That trend will help to improve affordability in a slow, but still important way.”
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