FED Hits The Brakes, But Mortgage Rates Surge: What’s Happening?


The FED pauses their rate hikes but mortgage interest rates go up by close to .25%.

What gives?

The market simply did not like the FED’s outlook on the economy and possible future rate decisions. 

See FED Chair Jerome Powell’s quote below:

Here is a YouTube short of Powell speaking on rates and inflation:

Powell stated he believed that USA GDP would go up from 1% to 2.1% and that the unemployment rate would stay close to the same.

If our economy is increasing it’s output despite the FED’s restrictive policy, Powell stated that it’s possible they could raise rates again this year.

He also stated that rates would likely be higher for longer.  The FED remains willing to do whatever it takes to get inflation to their target number of 2%. 

When the FED goes over their policy decisions, they release a dot plot of where FED members think rates will likely be in the future.

See below:

Currently the Federal Funds rate sits at 5.25% to 5.5%.

The above dot plot indicates their could be another rise in rates at one of the FED’s 2 remaining meetings in 2023.

The chart also indicates that the FED changed course from 4 likely rate cuts in 2024 to 2 rate cuts in 2024.

The FED’s tone and outlook caused Mortgage Backed Securities to sell off some.

Overall the MBS market is down -108 bps since our last update and mortgage rates have increased about .25%.

Here’s a good article from Mortgage News Daily on why mortgage rates went up even though the FED paused rates:


While we had hoped that mortgage rates would drop in the mid to latter half of 2023,

it appears this higher rate environment could last for longer.

In order for rates to come down, we will likely need to see economic reports come in lower than expectations.

This will indicate that the FED’s policy is working to combat inflation.

The Jobs Report coming out on Friday, October 4th could be a big market mover.

Below is Mortgage News Daily’s average interest rate across the U.S. as of 9/25/23.

Below is the Green Home Loans rate sheet today.

There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.

Please call me to go over your specific scenario so we can price your loan out accurately.


Existing home sales in the U.S. for August 2023 were 4.04 million on a seasonally adjusted annual basis. 

This figure is down .7% since July 2023 and 15.3% lower on an annual base. 

The median home price was $407,100 for August 2023, up 3.9% year over year.

Inventory sits at 3.3 months, lower than a balanced market of 4.5 – 6 months.

The average home is on the market for 20 days.

First time home buyers accounted for 29% of sales.

Cash buyers accounted for 27% of sales.

Investors and second home buyers accounted for 16% of sales.

Huge Week for Future of Mortgage Rates



Everything this week is about the FED meeting and what they will announce on Wednesday.

Will they raise the federal funds rate or pause?

I personally believe the economy isn’t as strong as some of the data suggests.

Much of the economic growth is being paid for by high interest rate credit as America’s credit card debt is over $1 Trillion.

I’m hoping the FED agrees with me and decides to pause.

When the FED raises rates, they are purposely trying to slow down the economy to help battle inflation.

This is a good article on CNBC about the Federal Funds Rate and how it has affected other interest rates.

The Federal Funds Rate is the overnight rate that banks charge each other.

The Federal Funds Rate has ripple effects on all other financing.

Credit Card Rates                             20% +

Mortgage Rates                                 7% +

HELOC Rates                                   9% +

Auto Loan Rates                               7% +

Federal Student Loan Rates             5.5%


This is an interesting image from MBS Highway which shows the 4 times the FED Funds Rates has exceeded the 10 Year Treasury.

The 3 other times the FED ended up cutting rates drastically once they realized the Economy was in a recession.

MBS Highway’s argument is the FED pays attention to past numbers instead of looking into the future, which often equates to them going too far in their policies and ten having to back track.

What the FED does on Wednesday and their clues about future moves will have a big impact on where interest rates go.

Current interest rates are nearly unchanged from last week.

Below is Mortgage News Daily’s average rates across America on 9/18/23. 

Below is the Green Home Loans rate sheet today.

There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.

Please call me to go over your specific scenario so we can price your loan out accurately.


The CPI inflation data came out last week and inflation increased to 3.7% – a bit higher than expected.

While inflation has cooled tremendously since it’s peak, the numbers are still higher than the FED’s stated goal of 2%.

It’s estimated that inflation is actually lower due to the nature of shelter costs lagging due to rent renewals usually happening once per year. 

Fall 2023 Real Estate Insights: Your Ultimate Buyer & Seller Guides


See below for all the current info you need to know when deciding whether to purchase or sell a home this fall.

Things to Consider When Buying a Home


Things to Consider When Selling Your House



Interest Rates rose over the past 7 days with the Mortgage Backed Security (MBS) market trading down -35 bps. 

According to Mortgage News Daily, the average rate on a 30 Year Fixed Conventional Loan in America as of 9/11 is 7.3%, up .22% from the average last week.   

Below is the Green Home Loans rate sheet today.

There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.

Please call me to go over your specific scenario so we can price your loan out accurately.

August CPI Inflation numbers will be released on 9/13/23. 

Expectations are that inflation will move to 3.6% and Core Inflation to 4.3%. 

Inflation has made dramatic improvements since it’s peak in 2022, but we are still above the FED’s target of 2%. 

Below is a good article breaking down the current inflation expectations:


All eyes are on the next FED meeting set for September 19-20th, 2023. 

I feel the large, negative revisions to the BLS Jobs numbers will be enough for the FED to pause and get more data before

making any further moves to the Federal Funds rate.


Keeping Current Matters just released their September 2023 Market Report.

Here is the audio of the report: https://files.keepingcurrentmatters.com/content/assets/audio/20230908/KCM-September-2023.mp3

and some of my favorite slides.

In a quick summary – National Home Sales Volume is Down but Home Prices are still moving up.

There is a combination of low demand and low inventory.

Demand is lower with interest rates higher but inventory is so low that home prices are still increasing.

The low inventory is a combination of housing being underbuilt for 10+ years and home owners not wanting to sell their home with a very low rate.

In this condition, home prices are likely to continue to move up and could make a huge leap up when rates drop and a flood of demand comes back into the market.

Inventory increased in August for the first time in 7 years.  This could indicate increased seller activity going into Fall – historically one of the best times to purchase a home. 



Mortgage Rates Improve Again


Interest Rates improved slightly over the last 7 days, mainly boosted by a +44 bps trading day of Mortgage Backed Securities (MBS) on Tuesday 8/29/23.

MBS is trading a bit down since Friday taking back some of the gains earlier last week.   

The Friday BLS Jobs Report was the big event that everyone was paying attention to last week.

There were 187,000 jobs created in August, which beat the estimates of 170,000. 

The item that is a bit frustrating from a mortgage standpoint is rates are reacting to the job creation number verses expectations, but not reacting to the negative revisions that keep coming in from previous months.

Although job creation beat estimates by 17,000 in August (this number will likely come down with revisions), June 2023 was lowered 80,000 jobs from 185,000 to 105,000.

July 2023 was lowered 30,000 jobs from 187,000 to 157,000.

So jobs actually went down 110,000 in June and July and the market barely takes notice of the revisions.

Lower jobs numbers helps rates improve while also increasing the likelihood that the FED will not raise the Federal Funds Rate in their next session.

Below is Mortgage News Daily’s average rates across America as of 9/1/23. 

Below is Green Home Loans rate sheet today.

There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.

Please call me to go over your specific scenario so we can price your loan out accurately.


Home prices rose .65% month over month in June 2023 according to the Case Shiller Home Price Index.

Year over year appreciation was flat.

The year over year number is interesting as home prices hit their peak in June 2022.

Home prices declined in the latter half of 2022, but have risen throughout 2023.

This means that 2023 has taken back all the losses from 2022 and we will likely break new records next month.

Home prices continue to dance with higher mortgage rates and low inventory.

Higher rates are tampering demand, but low inventory is keeping down supply.

Supply is winning in 2023 as home prices are increasing despite lower demand.

Here is the Case-Shiller month over month and year over year numbers in their 20 city composite.


  1. Cleveland +1.54%
  2. Chicago +1.39%
  3. Miami +1.36%
  4. Boston +1.27%
  5. Atlanta +1.27%
  6. Charlotte +1.24%
  7. Phoenix +1.13%
  8. San Diego +1.12%
  9. Detroit +1.06%
  10. New York +1.06%
  11. Minneapolis 1.04%
  12. Las Vegas +0.94%
  13. Los Angeles +0.86%
  14. Seattle +0.84%
  15. Portland +0.77%
  16. Washington +0.72%
  17. Dallas +0.71%
  18. Tampa +0.48%
  19. Denver +0.43%
  20. San Francisco +0.15%


  1. Chicago +4.2%
  2. Cleveland +4.1%
  3. New York +3.4%
  4. Miami +2.5%
  5. Detroit +2.2%
  6. Atlanta +2.1%
  7. Charlotte +1.7%
  8. Boston +0.9%
  9. Minneapolis +0.7%
  10. Washington +0.6%
  11. Tampa -0.9%
  12. Los Angeles -1.9%
  13. San Diego -2.5%
  14. Dallas -4.1%
  15. Portland -4.2%
  16. Denver -4.4%
  17. Phoenix -7.5%
  18. Las Vegas -8.2%
  19. Seattle -8.8%
  20. San Francisco -9.7%

Below is the Case-Shiller Home Price index since 2000.