The Fed sounds done

👋 Good morning. It's Friday. Need we say more? On to the news.

1. The Fed sounds done

The Federal Reserve left interest rates unchanged at its final policy meeting of 2023, while signaling that 2024 could bring significant rate cuts.

The decision leaves rates unchanged in a 5.25% to 5.5% range for the third consecutive meeting. Officials indicated that the central bank is likely done with its historic rate-hiking campaign to tame inflation.

• “Inflation has eased over the past year. Rate hikes are not the base case anymore as it was 60, 90 days ago," Powell said.

In regards to cuts; most top Fed officials envision cutting rates three or more times next year, according to new forecasts released Wednesday. The median projection is that in December of next year, the Fed's target rate will be 4.6%, 0.75 percentage points lower than now.

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Good to know: The economy is a complex, constantly changing operation. Understanding it and predicting its moves successfully is almost impossible, even for the Fed. At best, what anyone can make is just educated guesses on its future performance.

2. Mortgage rates drop as Fed previews cuts

Mortgage rates fell on Wednesday after the Fed said that the median FOMC member foresees three cuts to the Federal Funds rate in 2024.

• The average 30-year fixed mortgage rate, as calculated by Mortgage News Daily, fell from 7.09% to 6.82% on Wednesday and down to 6.62% yesterday, marking its lowest reading since mid-May and a considerable decrease from the October high of 8.03%.

“Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” said Sam Khater, Freddie Mac’s chief economist, in a statement.

🚨 COACH’S CORNER

We know those Refi’s are coming! But be proactive so you don’t lose them to servicers or advertisements they see. Prepare them that you are watching rates for them for more of a Floor, so they don’t refinance too early. Tune in for what I am doing in my own business.

— Dave Krichmar CEO

3. Catch up quick

🧑‍⚖️ Homeseller slapped with $50,328 commission files suit. (BAM)

🏚️ California is desperate for affordable housing but can’t stop getting in its own way. In LA, 49 units are taking 17 years to build. (WSJ)

⬇️ Housing inflation is slowing. (Axios)

🤝 Thrive Mortgage and Lower, strike merger deal. Thrive's top brass will now be answering to Lower's CEO, Dan Snyder. (Press Release)

4. Senators introduce bill targeting trigger leads

A coalition of bipartisan lawmakers in the U.S. Senate on Wednesday introduced legislation (S 3502, The Homebuyers Privacy Protection Act) targeting the practice of mortgage trigger leads.

The legislation proposes amendments to the Fair Credit Reporting Act to ban trigger lead abuse, but also makes important exceptions allowing mortgage companies with pre-existing relationships to continue to monitor and contact their previous customers.

Trigger leads involve sharing information about a consumer's hard credit pull for a mortgage, often leading to unsolicited lending offers. The bill, referred to the Senate Committee on Banking and Housing, needs committee approval before Senate floor consideration. The ICBA, AIME, BAC, and MBA back the bill.

5. Charted: Nearly 40% of homes are mortgage-free

There's a larger share of homes in America without mortgages now compared to any time since 2005. Many free-and-clear homeowners are baby boomers (~59 -77 yrs) who refinanced their mortgages when rates were lower.

• Mortgage-free, single-family homes and condos increased by 7.9 million from 2012 to 2022, to 33.3 million, according to Census Bureau data analyzed by Bloomberg.

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

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