Fed signals cuts are possible but not imminent as it holds rates steady

🎉 We made it to Friday — Today’s newsletter is 637 words, a 2.5-minute read.

1. Fed signals cuts are possible but not imminent as it holds rates steady

The Federal Reserve signaled it was thinking about when to lower interest rates but hinted a cut wasn’t imminent when it held rates steady at its first policy meeting of the year on Wednesday.

The central bank held its benchmark federal funds rate steady in a range between 5.25% and 5.5%, as it awaits more convincing evidence that a sharp downturn in inflation at the end of last year will endure.

“It’s a highly consequential decision to start the process of lowering interest rates, and we want to get that right,” said Fed Chair Jerome Powell at a news conference. “We’ve made a lot of progress on inflation. We just want to make sure that we do get the job done in a sustainable way.”

2. Mortgage rates decline

Freddie Mac says the average 30-year fixed-rate mortgage last week was 6.63%. That's down from the previous week's 6.69%, but up slightly from the 6.09% last year at this time.

“Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics, and lower mortgage rates are setting the stage for a more robust housing market,” Freddie Mac's Chief Economist Sam Khater said.

“Mortgage rates have been stable for nearly two months, but with continued deceleration in inflation we expect rates to decline further," Khater said.

🚨 COACH’S CORNER

We have all dealt with this. The client says “yeah but the other loan officer said…” You know the other loan officer is wrong but how to convince the client? Try this hack I use!

— Dave Krichmar CEO

3. Catch up quick

🧑‍⚖️ Man pleads guilty to dodging money laundering rules in New York. (CNBC)

🏘️ NAR “sets the record straight” on commissions. (MarketWatch)

🏦 United Bank to consolidate its mortgage subsidiaries. As part of this consolidation, Crescent Mortgage, a subsidiary, will cease operations in March. (HousingWire)

💭 Is February the worst month of the year? (New York Post)

4. Keller Williams settles the Sitzer/Burnett commission lawsuit for $70 million

Keller Williams has agreed to pay $70 million to settle one of the landmark antitrust lawsuits over broker commissions.

The brokerage, which announced the agreement on yesterday, was one of three remaining defendants in the Missouri-based lawsuit known as Sitzer/Burnett.

In an email sent to Keller Williams agents on Thursday, executive chairman Gary Keller said the settlement, if approved, would release the firm from liability in copycat lawsuits.

“We had full confidence in the strength of our appeal,” Keller wrote. “But we also knew the appellate process could be long and unpredictable – and that our franchisees and agents would have no protection and complete uncertainty while that process played out over time.”

5. January 2024 housing inventory data

In January 2024, there were 665,569 active listings on Realtor.com. That’s +8% above January 2023 (616,865 active listings), and +25% above housing boom times in January 2021 (531,775 active listings) when many homes were selling so fast they weren’t even being registered as inventory.

But it’s still well below pre-pandemic levels: Active listings in January 2024 were -40% below January 2019 levels when there were 1,110,636 U.S. homes for sale.

Providing a boost to overall inventory, sellers turned out in higher numbers this January as newly listed homes were 2.8% above last year’s levels. This marked the third month of increasing listing activity after a 17-month streak of decline, however, this month’s improvement is lower than last month’s 9.1% growth rate.

You're all caught up. See you on Monday!

Was this email forwarded to you? Subscribe here.

Interested in reaching mortgage professionals like you? Get in touch to advertise.