What’s Next for Interest Rates? A Valentine’s Eve Look at the Market

It’s February 13th, which means tomorrow is Valentine’s Day and a Friday, so expect crowded restaurants, overpriced prix fixe menus, and an influx of engagement photos on your feed. But for those of us keeping an eye on interest rates, inflation, and the housing market, the real love story (or heartbreak) is happening in the economy.

So where are we now? And more importantly—what’s next? 🧐

CPI Just Dropped—What’s the Damage?

The latest Consumer Price Index (CPI) report just landed, giving us a fresh read on inflation. The Fed has been trying to cool things down without sending the economy into a spiral, and while inflation has been trending lower, it’s still not exactly at "happily ever after" levels.

If inflation came in hotter than expected, mortgage rates could stay elevated longer since the Fed won’t be in a rush to cut rates. But if inflation cooled more than expected, that could speed up rate cuts—good news for buyers hoping for lower borrowing costs.

Where Are Mortgage Rates Heading?

Rates have been bouncing between the low 6% to mid-7% range, depending on the loan type and borrower profile. Many are expecting the Fed to start cutting rates this year, but whether that happens in May, June, or later depends on how the data plays out.

For homebuyers and sellers, this uncertainty is the real challenge. Do you wait for rates to (hopefully) drop later in the year? Or do you move now and refinance if rates go lower? Timing the market perfectly is about as easy as predicting next year’s Super Bowl winner.

What to Watch Next

• Inflation Reports (CPI & PCE): The Fed wants to see consistent progress before rate cuts happen.

• Jobs Data: A strong labor market gives the Fed a reason to stay cautious.

• Fed Meeting in March: We probably won’t get a cut just yet, but their tone will set expectations for the months ahead.

So, Should You Buy Now or Wait?

It depends on your goals, not just rates. If the right home comes along and you can afford the payment, locking in now—with the option to refinance later—could be smarter than waiting for a rate drop that might take longer than expected. If you’re on the fence, let’s talk strategy—because no matter what the Fed does, your real estate plans shouldn’t be stuck in limbo. 🤓