Mortgage rates tick up following Fed meeting

Plus: Washington Trust to pay $9M in redlining settlement: DOJ

September 29, 2023

🌅 Morning folks, happy Friday. Today's newsletter is 750 words, a 3.5-minute read.

Disclaimer: Average mortgage rates as of Sep 28, 2023. © MND's Daily Rate Index.

1. Mortgage rates tick up following Fed meeting

Freddie Mac‘s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 7.31% as of Sept. 28, up 12 basis points from last week’s 7.19%. By contrast, the 30-year fixed-rate mortgage was at 6.70% a year ago at this time.

“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” Sam Khater, Freddie Mac’s chief economist said. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”

Other indices showed significantly higher mortgage rates this week. At Mortgage News Daily on Thursday, the 30-year fixed rate for conventional loans was 7.60%, up from 7.33% the previous week.

2. Washington Trust to pay $9M in redlining settlement: DOJ

Washington Trust Company, the oldest community bank in the U.S., has agreed to pay $9 million to settle the allegations of discriminatory mortgage lending practices in majority-Black and Hispanic neighborhoods in Rhode Island from 2016 through at least 2021, the Department of Justice announced Wednesday.

The DOJ’s complaint alleges that the Westerly, Rhode Island-based lender failed to open locations in predominantly Black or Hispanic neighborhoods when expanding its footprint. Further, the complaint said that other banks received nearly four times as many loan applications every year in the majority-Black and Hispanic neighborhoods for the same six-year period compared to Washington Trust.

Washington Trust has agreed to open two new branches in majority-Black and Hispanic neighborhoods in Rhode Island and designate at least two mortgage loan officers to serve these communities. It will also hire a director of community lending to oversee the continued growth of lending opportunities in the neighborhoods of color.

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3. Catch up quick

🤝 Maxwell acquires digital mortgage lending platform Revvin. (Maxwell)

📉 Mortgage applications fell 1.3% for the week that ended Sept. 22. (MBA)

⬇️ Mortgage delinquencies near all-time low in July at 2.7%. (CoreLogic)

4. NAR calls for end to rate hikes as pending sales drop again

A gauge of pending US previously owned home sales fell in August to the lowest level since April 2020, evidence of a resale market throttled by higher mortgage rates.

The National Association of Realtors’ index of contract signings tumbled 7.1% to 71.8 from July, the group reported Thursday. All regions saw declines in August. Contract signings in the South fell to the lowest level since 2010, while the West posted the weakest reading in data back to 2001.

“The Federal Reserve must take into account the challenges in the home sales market when considering future monetary policy. There is no need to raise interest rates. Moreover, the government shutdown will disrupt some home sales in the short run due to the lack of flood insurance or delays in government-backed mortgage issuance.”

Lawrence Yun, NAR chief economist

5. Fannie Mae launches new programs to aid Latino homebuyers

Fannie Mae announced on Wednesday that it will launch new programs and resources designed to tackle the homeownership gap experienced by the Latino community. The GSE aims “to provide responsible access to housing and long-term sustainable homeownership opportunities.”

The company also expanded its Special Purpose Credit Program (SPCP) pilot to provide downpayment assistance to eligible first-time homebuyers living in majority-Latino communities.

  • These include Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia, with expansion to additional cities including those with large Latino populations in early 2024.

Fannie Mae also announced that HomeView en Español, a Spanish-language digital consumer education platform, is available 24/7 with information about financial literacy and homeownership. Latino consumers can go through this course on their own or work with a trusted advisor.

☀️ See you on Monday!

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