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- Fed prepares to lower rates, size of first cut in doubt
Fed prepares to lower rates, size of first cut in doubt
Plus: Homebuilder confidence breaks streak, sees increase
👋 Welcome back to Mortgage Nuggets. Today's newsletter is 665 words — a 2.5-minute read.
Disclaimer: Average mortgage rates as of Sep 17, 2024. © MND Daily Rate Index.
1. Fed prepares to lower rates, size of first cut in doubt
This week’s gathering of the central bank’s Federal Open Market Committee carries an uncommon air of mystery. While markets have made up their collective mind that the Fed is going to lower interest rates, there’s a vigorous debate over how far they will go.
Will it be the traditional quarter-percentage-point, or 25-basis-point, rate reduction, or will the Fed take an aggressive first step and go 50, or half a point?
Fed watchers are unsure, setting up the potential for an FOMC meeting that could be even more impactful than usual. The meeting wraps up Wednesday afternoon, with the release of the Fed’s rate decision coming at 2 p.m. ET.
2. Confidence rises among home builders
Home builder confidence edged up in September as mortgage rates fell, breaking four months of consecutive declines, but remained at relatively low levels as rising costs continued to impede construction.
The NAHB/Wells Fargo Housing Market Index of builder confidence rose to 41 this month from 39 in August, the National Association of Home Builders said on Tuesday. It was the first positive view of future home sales since May.
“Thanks to lower interest rates, builders now have a positive view for future new home sales for the first time since May 2024. However, the cost of construction remains elevated relative to household budgets. Moreover, builders will face competition from rising existing home inventory in many markets as the mortgage rate lock-in effect softens with lower mortgage rates.”
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3. More Nuggets
📰 The Fed, explained: What it's trying to do and why it matters to you. (MarketWatch)
⚖️ Fathom Realty agrees to pay $2.95M to settle commission suit. (Press Release)
👨⚖️ Fannie Mae sues for $60 million in defaulted mortgages tied to notorious Philadelphia landlord. (Inquirer)
💸 The rise of the millionaire renter. (The Wall Street Journal)
📈 Weekly mortgage demand surges 14% higher as rates hit two-year low. (CNBC)
4. Charted: Typical home value by county, according to the Zillow Home Value Index
Click here for an interactive version of the county map above
39.8% of U.S. owner-occupied housing units are now mortgage-free, up from 38.5% in 2022, marking a new high since records have been kept. The portion of homeowners with no mortgage has ticked up almost every year since 2010, when it was 32.1%.
Among the 200 largest U.S. metros by population, here are the top 5 highest and lowest percentage of mortgage-free homeowners:
Highest %
| Lowest %
|
☀️ You’re all caught up. See you on Friday!
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