Key Details:
- During a press conference on Wednesday, Fed Chair Jerome Powell shared that the median projection from FOMC participants is three rate cuts for 2024.
- After the projection was announced, mortgage rates fell by 27 basis points to 6.82%.
- On Thursday’s Hot Sheet, Tom Toole shared two scripts you can use with consumers in your market to share this news.
Following the final Federal Open Market Committee (FOMC) meeting of the year, Fed Chair Jerome Powell shared key decisions and projections during a press conference held Wednesday afternoon.
As expected, Powell announced the decision to hold rates steady for the third straight time, with a unanimous vote to keep the borrowing rate between 5.25%-5.5%.
In addition, Powell shared projections from the committee —which indicate at least three cuts in 2024, assuming quarter percentage point increments.
As Tom Toole stated on today’s Hot Sheet, “The markets reacted beautifully.” This includes mortgage rates, which fell by 27 basis points to 6.82% on Wednesday—welcomed news for the entire industry.
Good News for the Housing Market
Although mortgage rates and other long-term rates are not directly set by the Fed, they follow market expectations based on what the Fed does determine: short-term rates. With the Fed’s projections shared on Wednesday, it is clear that there are positive expectations.
“Additional rate hikes no longer appear to be part of the conversation. It is all about the pace of cuts from here. This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”
Scripts to Share Local Mortgage Rates with Consumers
During today’s Hot Sheet, Tom Toole shared two scripts for real estate professionals to start implementing today. As he stated, “You’re doing your client base a disservice if you’re not beating the drum on this right now.”
There are people in the marketplace—both on the buy side and sell side—who would love to hear that homes just got more affordable because of a drop in mortgage rates.
Before you send a message, take a moment to talk to a lender and look at local mortgage rate data. While national mortgage rates dropped to 6.82%, Tom is seeing rates as low as 6.375% in his local market.
Text or Video Script
Once you have the data for your local market, Tom recommends using the following script as a text message—or better yet, a video message—and sending it out to your database.
“Hey [name], it’s Tom Toole with RE/MAX, following up as promised. Did you see mortgage rates plummeted below 6.5% locally? We’ve been seeing some people lock in at 6.375%.
“Would it help if I broke down the change in the monthly payment for you at these new rates?”
Email Script
If you email your database, Tom once again suggests sending a video, whether through BombBomb or another platform. Be sure to adjust as needed for the rates you are seeing in your local market.
“Did you see mortgage rates plummeted? We’ve been seeing some people lock in at 6.375% locally. These are the lowest rates we’ve seen in over a year. Would it help if I broke down the change in the monthly payment for you at these new numbers?
“I’m not sure if this is for you, but would you be open-minded to jumping on a quick call to discuss your real estate goals in more detail now that your affordability has gone up?”
Both scripts are simple and effective, because you are asking questions while adding value.
“This is where you can separate yourself from the agents in your marketplace….consumers are going to work with the people who keep them informed, not the other way around.”
During today’s show, Tom also broke down the entire FOMC press conference, including every time Powell mentioned the housing market. It’s an episode you don’t want to miss—watch it here.
And for daily downloads of all Hot Sheet show notes and slides used during the show, join BAMx.
