Mortgage Rates Slip, Fed could Pauses Hikes & More

Good morning and Happy Friday! Three failed US banks had one thing in common; KPMG. According to reports, the firm issued clean audits for each bank in the weeks before the banks failed. The Senate Investigations Committee is looking into it.

1. Powell hints at possible end to series of hikes

The Federal Reserve raised interest rates by 25 basis points for the 10th time in just over a year, pushing rates above 5% for the first time since 2007.

However, the Fed hinted that this might be the last hike for a while, as recent slowdowns in inflation and hiring may indicate a pause in rate hikes. The Fed removed a line from their statement that previously indicated they "anticipated" additional rate increases.

Fed Chair Jerome Powell acknowledged this change, but also made it clear that the Fed will continue to do what is necessary to tame inflation. The Fed will keep a close eye on the labor market and inflation in order to avoid a recession.

Looking ahead…if current trends continue, we may have seen the last of interest rate hikes for now. But don’t get too excited: Powell said it’s too soon to begin thinking about rate cuts.

2. Mortgage rates slip after two weeks of increases

According to a statement by Freddie Mac yesterday, the average rate for a 30-year fixed loan was 6.39%, down from 6.43% last week.

Rates have eased from the highs reached late last year, giving determined home shoppers a little more purchasing power. But with prices still elevated, and listings in short supply, affordability is stretched. Many would-be buyers are also worried about a potential recession. Given those factors, deals remain subdued in what’s traditionally the market’s busiest season.

“Interested homebuyers are acclimating to the current rate environment, but the lack of inventory remains a primary obstacle to affordability,” Sam Khater, Freddie Mac’s chief economist.

3. UWM offers a dedicated loan coordinator

UWM announced on Wednesday that its brokers can request a dedicated loan coordinator, adding a level of loan processing support when needed. In addition, UWM announced brokers can also connect their loan origination platform to the lender’s system.

When they order the service known as “PA+,” loan officers, processors, and their borrowers will have access to a loan coordinator to help receive, scrub, order, and send docs. The service can be used loan-by-loan basis to increase operational capacity.

“Today, speed and efficiency are more important than ever, and we will continue to find solutions that will help brokers continue scaling their business for the future,” Ishbia said.

4. More Nuggets

🔑 The median age of a landlord is 59 years old, and their median household income is $129,870. The typical landlord has two rental properties. About one in six (16%) reported having five or more rentals. Here’s the full Zillow landlord report.

💸 Rithm Capital, the real estate investment trust that operates NewRez, Caliber, etc., is considering spinning off its mortgage division into a public entity to create more pools of liquidity and diversify its business model. (NMN)

💼 ICE, Black Knight: Companies on both ends of a controversial pending deal reported Q1 earnings yesterday. Revenue dipped for both companies coming in at $236 million and $328.2 million, respectively. (Zacks)

5. Housing market continues to stabilize

According to the latest Black Knight Home Price Index, 93 of the 100 largest US housing markets experienced a month-over-month home price increase between February and March. For comparison, between January and February, only 79 of those major housing markets saw home prices rise

This stabilization comes after prices were seen declining in 92 of the top 100 housing markets just five months ago. The most significant gains occurred in Midwestern and East Coast markets, while the sharpest declines were observed in Western and Southwestern markets.

Some firms, like Zillow and CoreLogic, believe this could be the bottom for national house prices, while others like Moody's Analytics and Fannie Mae think prices may fall again after the peak homebuying season.

☀️ See you on Monday!

p.s. What are some of the best podcast episodes you’ve ever heard? I'm always on the lookout for recommendations! Just hit reply with your favs!

Here is my favorite: Reply All - Long Distance (1&2)

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