TODAY’S RATES & HOUSING NEWS
The FED pauses their rate hikes but mortgage interest rates go up by close to .25%.
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.
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
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.