Pausing on Interest Rates
What to Watch After the Fed Hits Pause on Interest Rates
The Fed Pressed Pause—Now What?
At the Federal Reserve’s first meeting of the year, policymakers chose to hold interest rates steady, keeping borrowing costs at multi-year highs. After a series of rate cuts in late 2025, this pause signals a more cautious stance as inflation remains above target and the labor market shows mixed signals.
Mortgage Rates Can Move Without Fed Cuts
One key thing many buyers don’t realize: the Fed does not directly control mortgage rates.
Mortgage rates tend to follow the 10-year Treasury yield, which moves based on expectations around inflation, economic growth, and investor sentiment. That means rates can decline before the Fed cuts—or rise even when the Fed does nothing.
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Mortgage rates are expected to fluctuate between roughly 5.7% and 6.5% in 2026
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Stronger economic data or sticky inflation could push rates higher
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Slower growth or easing inflation could pull rates lower—even without Fed action
Right now, the average 30-year fixed mortgage is hovering near 6.25%, with well-qualified buyers sometimes seeing offers closer to 5.6%.
Lower Rates Don’t Automatically Mean Lower Home Prices
If mortgage rates dip, that doesn’t guarantee homes become cheaper.
In Florida—and especially South Florida—inventory remains tight, particularly in desirable neighborhoods. When rates fall, demand often increases faster than supply, which can keep prices elevated.
Until there’s a meaningful increase in housing supply, pricing pressure is likely to remain, even if borrowing costs ease modestly.
What Buyers Can Do Instead of Waiting
I often tell buyers this: you can’t time the market perfectly—but you can prepare for it.
Even with the Fed on hold, buyers still have ways to improve affordability:
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Strengthen credit scores to secure better loan terms
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Compare lenders carefully
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Explore rate buydowns or builder incentives where available
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Focus on total monthly cost, not just the rate
Waiting for the “perfect” rate can mean missing the right home—or facing more competition later.
Sellers: Why This Pause Still Matters
For sellers, a Fed pause doesn’t mean demand disappears—but it does mean buyers are more rate-sensitive and value-focused.
Homes that are:
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Properly priced
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Well-presented
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Clearly positioned against competing listings
are the ones that continue to move. In today’s environment, strategy and expectations matter more than headlines.
Economic Uncertainty Isn’t a Reason to Freeze
While the stock market remains strong and savers are benefiting from higher yields, uncertainty around inflation, jobs, and policy remains. That uncertainty can cause hesitation—but it shouldn’t stop informed decision-making.
As one financial planner recently noted, uncertainty becomes a problem only when it prevents people from taking action aligned with their real goals.
For Florida Buyers & Sellers in 2026
The Fed hitting pause doesn’t mean the market is standing still.
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Mortgage rates can still move
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Housing supply remains limited
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Well-prepared buyers and sellers will continue to succeed
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Data, timing, and local expertise matter more than ever
In 2026, success won’t come from guessing where rates go next—it will come from understanding how today’s conditions affect your next move.
South Florida Market Insights
Laura Graves Real Estate Today:Email: [email protected]
