The Federal Reserve Board is scheduled to meet Tuesday and Wednesday, and it has signaled previously that it may cut interest rates at the end of its quarterly gathering. 

That expectation of a rate cut this week, and the potential for more later in the year, has already moved mortgage rates lower. Last week, the average 30-year fixed mortgage rate dropped to 6.2%, down from 6.35% the week before and from 7.18% the previous year. The 6.2% average is the lowest since February 2023, Freddie Mac reported.

If the Fed cuts rates this week, as expected, that could fuel another drop, although there are no guarantees. Mortgage rates do not mirror the Fed rate, and mortgage rates often rise and fall on expectations for what the Fed will do, not necessarily what the Fed actually does. 

A recent article from the National Association of REALTORS® noted: “Predicting mortgage rates is difficult due to the complexity and interplay of various economic factors that influence them. However, in very simple terms, historical data suggests that … mortgage rates could fall to around 5.9% by year’s end.” 

Several economists and housing market analysts have been saying for months that if and when rates dip into the fives, that will help unclog some of the logjam in real estate. 

In January, Rate CEO and President Victor Ciardelli told Agent Publishing that “as soon as interest rates start getting into the fives, things are really going to start to move. There are a lot of buyers out there who are going to start to engage.”

Many homeowners have been on the sidelines for the last couple years, unwilling to let go of their current mortgages, in many cases with rates locked in at lower than 4%. And potential buyers have struggled to find an affordable home, with demand outpacing inventory, coupled with rates in the sevens or higher. 

Savvy agents may want to reach out to potential clients this week, even ones who indicated they are not ready to sell or buy. Inventory is higher in most markets, helping balance the market in general. Lower rates could make a home that once seemed unaffordable now attainable for some, and lower rates also could help ease the loan qualifying process for some clients. 

For those who did buy a home in the last year or two, now could be the right time for agents to connect those clients with a lender to discuss refinance options as well.