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The latest Consumer Price Index report, issued earlier this month, delivered unwelcome news about inflation. According to the report, the uptick in inflation that has been occurring over the last few months accelerated in January, climbing 3% on an annual basis. This surprise uptick could significantly influence the Federal Reserve's stance when it convenes for its mid-March meeting, potentially delaying the interest rate cuts many analysts had predicted for early 2025.
While the market looks better than last year, buyers should not expect mortgage rates to drop significantly anytime soon, Nadia Evangelou, senior economist and director of real estate research at the National Association of REALTORS®, says. "The 3 to 4% interest rates aren't coming back anytime soon. These rates [6% to 7%] could be the new normal for now," Evangelou says.