• Mortgage Nuggets
  • Posts
  • Fed holds rates steady but pencils in one more hike this year

Fed holds rates steady but pencils in one more hike this year

Plus: Mortgage applications rose last week, despite stubbornly high rates

September 22, 2023

Good morning. This is Mortgage Nuggets. We deliver you all the top mortgage news - without the brain freeze. Today’s newsletter is 718 words, a 3-minute read.

Disclaimer: Average mortgage rates as of Sep 21, 2023. © MND's Daily Rate Index.

1. Fed holds rates steady but pencils in one more hike this year

The Federal Reserve left its benchmark interest rate unchanged while signaling borrowing costs will likely stay higher for longer after one more hike this year.

The central bank's policy-setting Federal Open Market Committee, in a post-meeting statement, repeated language saying officials will determine the "extent of additional policy firming that may be appropriate."

The FOMC held its target range for the federal funds rate at 5.25% to 5.5%, while updated quarterly projections showed 12 of 19 officials favored another rate hike in 2023, underscoring a desire to ensure inflation continues to decelerate.

"We will assess our progress based on the totality of the data and the evolving outlook and risks," Powell said in Aug. 25 remarks in Jackson Hole, Wyoming. "We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data."

2. Mortgage applications rose last week, despite stubbornly high rates

Mortgage applications rose last week, even as mortgage rates remain stubbornly high, an indication that at least some buyers are determined to move forward with a home purchase in one of the most challenging markets in decades.

For the week ending September 15, the total number of applications — which includes those for loans to purchase a home and to refinance an existing loan — increased 5.4% from one week earlier, according to data from the MBA.

  • Purchase applications increased for both conventional and FHA loans but remained 26% lower than the same week a year ago. Meanwhile, refinance applications also increased but are still about 30% lower than the same week last year.

“Mortgage applications increased last week, despite the 30-year fixed rate edging back up to 7.31%, its highest level in four weeks,” Joel Kan, MBA’s vice president and deputy chief economist said.

Don’t “leaf” your business to chance. 🍂 
See why brokers are falling for wemlo® processing.

Are you looking to branch out and try third-party processing? Look no further than wemlo’s comprehensive processing support offerings. Our customer-centric processors are in the business of keeping mortgage brokers and their borrowers happy. Don’t just take our word for it – look at our 4.9/5-star* rating from brokers.

Learn more with a 1:1 call today.
Q2 2023 LO/BO Score:  4.9/5.0 out of 47 responses 

3. Extra nuggets

✍️ Video: How Roam hopes to make home-buying more affordable with assumable mortgages. Raunaq Singh the CEO explains. (CNBC)

📈 Mortgage rates rise after Fed's updated rate forecast. (MND)

🧑‍⚖️ Home Point Settles For $5 Million over alleged IPO misrepresentations. (NMP)

🏛️ Bank of America boosts minimum hourly wage to $23. (BankingDive)

4. Existing-home sales moved lower in August

Existing-home sales declined 0.7% in August to a seasonally adjusted annual rate of 4.04 million units, according to the National Association of Realtors. Down 15.3% from one year ago, this is the fourth consecutive month of sales declines.

The median existing-home price rose 3.9% in August to $407,100, up from $391,700 in August 2022. This is the 127th consecutive month of year-over-year price increases.

“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” said NAR Chief Economist Lawrence Yun. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”

5. Charted: Benchmark Treasury yields hit 16-year high

Following a strong jobs report — where claims for unemployment insurance hit their lowest weekly level since January — and hawkish warnings from the Federal Reserve, yields on 10-year Treasury notes reached a 15-year high yesterday. Mortgage rates are likely to follow suit.

Yield on the 10-year U.S. Treasury note. Weekly; Sept. 19, 2003, to Sept. 21, 2023

☀️ See you on Monday!

Thanks for reading! Was this email forwarded to you? Subscribe here.