Jackson Hole Just Moved Your Cap Table

[Selina Gray]

Story: In his Jackson Hole keynote, Fed Chair Jerome Powell said the “balance of risks” is shifting from inflation to layoffs, signaling a possible September rate cut. Markets took the hint; long yields dropped, the Dow ripped +900 intraday, and 30-year mortgages hovered near a 10-month low around 6.58%. Powell tempered the party (aka don’t bank on sub-6% this year without a hard economic turn). Still, even this guidance gave homebuilders a 5% pop and re-ignited hopes for slightly cheaper borrowing. He also outlined a back-to-basics policy framework (flexible inflation targeting) that tilts more toward supporting employment if inflation and jobs diverge.

So What? A September cut (or even the strong hint of one) nudges deal math in your favor—DSCR improves at the margins, builder carry eases, and bridge-to-perm takeouts get a touch friendlier. Expect a sentiment bump rather than a buyer stampede: at ~6.6%–6.7%, affordability is still tight, which keeps price cuts and concessions in play. For SFRs, slightly lower rates can shorten renter "stickiness," so protect occupancy with renewal perks or light option-to-buy pilots while you watch cap-rate/financing spreads for acquisition windows.

What’s Next? Circle Sept. 17 (FOMC) and prep now: refresh rate locks, shop lenders, and float buy offers that assume a modest cost-of-capital improvement without promising sub-6%. Track weekly Freddie Mac prints, rate-lock volumes, and builder incentives to see if sentiment turns into contracts; keep an eye on MBS spreads to gauge how much of Powell’s tone actually flows into mortgage pricing. Finally, read the Fed’s statement language, and if employment risks get top billing, the path for additional easing (and your refi ladder) gets clearer.

Source: Realtor.com