Rates continue to depress builders as well as sales

💪 Pushing through to Wednesday! Today's newsletter is 726 words, a quick 3-minute read. Plus, don't forget to celebrate—it's National Hot Dog Day! 🌭🤣

1. Rates continue to depress builders as well as sales

Builder confidence fell further in July as high mortgage rates and elevated construction financing continue to slow down the market.

The National Association of Home Builders (NAHB) Housing Market Index (HMI) dropped to 42 this month, its lowest level of the year. The reading came below the forecast of 43.

2. The odds of a Fed rate cut by September at 100%

Traders are now 100% certain the Federal Reserve will cut interest rates by September.

There are now 95.3% odds that the Fed’s target range for the federal funds rate, its key rate, will be lowered by a quarter percentage point to 5% to 5.25% in September from the current 5.25% to 5.50%, according to the CME FedWatch tool.

And there are 4.7% odds that the rate will be a half percentage point lower in September, accounting for some traders believing the central bank will cut at its meeting at the end of July and again in September, says the tool. Taken together, you get the 100% odds.

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3. More Nuggets

⏯️ Biden to propose capping national rent increases at 5%. (Axios)

💵 Nearly a third of home sellers are cutting prices as housing supply balloons in these areas. (MarketWatch)

🇺🇸 The 10 U.S. states with America’s best housing markets. (CNBC)

📰 Rocket Pro TPO waiving fee associated with Home Equity Loans. (NMP)

4. HUD charges Rocket and appraisal companies with racial discrimination

The U.S. Department of Housing and Urban Development (HUD) has charged a group of appraisers and lenders with housing discrimination in Denver, alleging the companies involved undervalued a homeowner’s property because she is Black.

HUD announced the charge Monday against the appraisal company Maverick Appraisal Group, appraisal management company Solidifi U.S. Inc., the lender Rocket Mortgage, LLC, and appraiser Maksym Mykhailyna.

5. Nearly 7 In 10 home loans belonged to IMBs in 2023

In 2023, nonbank mortgage companies originated 68.8% of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, up from 60.2% in 2022, according to HMDA data.

This increase occurred despite the worst market in decades, with only 4.3 million mortgages originated—a 30-year low. The 2023 data also showed a slight rise in loans to Black, Hispanic-White, and Asian borrowers.

Denial rates for Black and Hispanic-White applicants were 16.6% and 12%, respectively, while Asian and non-Hispanic-White applicants faced denial rates of 9% and 5.8%.

Dive deeper.

6. 1 funny thing

☀️ You’re all caught up. See you on Friday!

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