“I would say that anything is theoretically possible. We learned that lesson when the pandemic started, but I’d say this is an election year and the odds of the Fed actually hiking rates at this point, and this year, are probably highly unlikely,” she said.
Expectations of a summer rate cut rapidly faded amid a resilient US labor market and that unexpected inflation uptick, with September at the earliest likely to mark a “launch point” for the Fed to begin lowering rates, according to Cohn.
What does the Fed’s latest decision mean for the housing market?
Mortgage rates have continued to hover above 7% in recent weeks, although homebuying has continued at a decent clip across many US markets – and last week’s Fed announcement is unlikely to make much of a difference either way on Americans’ plans to buy, she added.
Read more: Mortgage rates up for fourth consecutive week
“Mortgage rates have gone back up to multi-year highs over the course of the past few weeks. So the fact that the 10-year bond yield is rallying and not going up, I think, is good news for the real estate market,” she said. “We need lower rates to keep the real estate market going. The real estate market really keeps the economy going. So I think that it will be good news for homeowners and homebuyers.”
