By PATRICK LAVERY
Saying the economy has surprised even the experts since the start of the COVID-19 pandemic nearly four years ago, Federal Reserve Board Chairman Jerome Powell on Wednesday announced that the Fed would hold its ground for now and keep its policy interest rate unchanged at its current range of 5.25% to 5.5%.
“We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in prepared remarks following the first two-day Federal Open Market Committee meeting of 2024.
The decision by the FOMC was not unexpected, and…
By PATRICK LAVERY
Seven weeks ago, the 2023 slate of policy meetings for the Federal Open Market Committee concluded with members voting to leave the key interest rate unchanged for a third straight time. However, anyone hoping that 2024 will begin with some movement in a downward direction is likely to be disappointed this week.
Despite a seemingly positive economic outlook that has the stock market soaring to record highs, the experts seem to agree that there will be no change made when Federal Reserve Board Chairman Jerome Powell emerges from the FOMC meeting on Wednesday.
The stability, so to speak, of the Fed’s policy interest rate has been mirrored somewhat in the housing market recently. According to Freddie Mac,…
Homebuyers, newly infused with extra spending power, are returning to the housing market as they come to terms with 6% rates and move to beat out increasing competition.
Redfin reported that buyers on a $3,000 monthly budget have gained almost $40,000 in purchasing power as rates have fallen from a peak in October 2023.
This theoretical buyer can afford a $453,000 home with a mortgage rate at roughly 6.7%. Just a few months ago, they could only snag a $416,000 home at a 7.8% interest rate, a $37,000 difference.
Costs are easing for buyers across the income spectrum, of course. The monthly mortgage payment on the typical U.S. home (about $363,000) is $2,545 with a 6.7% rate but clocked in…
Mortgage rates have slipped to their lowest levels since May.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.60%, down from the week prior’s 6.66%. A year ago at this time, the 30-year FRM averaged 6.15%.
The 15-year fixed fell to 5.76% from 5.87%. A year ago, it averaged 5.28%.
“This is an encouraging development for the housing market and in particular for first-time homebuyers who are sensitive to changes in housing affordability,” said Sam Khater, Freddie Mac’s Chief Economist.
“However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
Rates are the primary concern of most potential buyers, but the market remains crippled by ongoing stock shortages…
Mortgage rates increased slightly last week but remain in the mid-6s, encouraging some potential buyers to come off the sidelines.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.66%, up from the week prior’s 6.62%. A year ago at this time, the 30-year FRM averaged 6.33%.
This is the second consecutive week of increases, but just the second since October. Rates have fallen more than a full percentage point since then, giving homebuyers more breathing room as they struggle against record-high unaffordability.
The 15-year fixed rate bucked this trend and fell for a second week, from 5.89% to 5.87%. A year ago, it averaged 5.52%.
Freddie Mac Chief Economist Sam Khater noted that even as rates…
Mortgage rates remained basically unchanged last week as markets adjust to economic expectations for 2024.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.62%, inching up from the week prior’s 6.61%. A year ago at this time, the 30-year FRM averaged 6.48%.
This is the first increase since October. Rates have fallen more than a full percentage point since then, giving homebuyers more breathing room as they struggle against record-high unaffordability.
The 15-year fixed rate dropped, however, from 5.93% to 5.89%. A year ago, it averaged 5.73%.
Freddie Mac Chief Economist Sam Khater ascribed the news to the slow machinations of the market as it “digests incoming economic data.” He pointed out that rates stopped their…
The last two weeks of 2023 brought a slump in mortgage applications as buyers continue to grapple with affordability.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – fell 9.4% from the two weeks prior. The data includes adjustments for the holidays.
Adjusted purchase applications dropped by 5%, while the unadjusted index fell 34% and was 12% lower YOY.
Americans appear to be losing interest in falling rates, which initially sparked some activity in the market. The 30-year fixed ended the year at 6.76%, ticking up very slightly from the week prior but still down more than a full point from its October peak.
MBA Vice President and…
New home sales sank again in November despite cooling mortgage rates, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales fell by 12.2% from October to a seasonally adjusted annual rate of 590,000, well below the rate of 685,000 units predicted by economists.
This is the sharpest decline since April 2022.
November saw the beginning of a cool down that brought interest rates to the mid-6’s. But at the start of that process, rates were at their highest levels in more than two decades, nearing 8%.
New home sales were up only 1.4% year-over-year, a notable decline from the month prior’s 17.7% YOY increase. Lack of existing inventory pushed buyers to new…
Mortgage rates sank last week, buoying buyers, sellers, and builders’ spirits ahead of the holiday.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.67%, down from the week prior’s 6.95%. A year ago at this time, the 30-year FRM averaged 6.27%.
The 15-year fixed rate dropped as well, down more than 40 bps to 5.95%. A year ago, it averaged 5.69%.
“The 30-year fixed-rate mortgage remained below seven percent for the second week in a row, a welcome downward trend after 17 consecutive weeks above seven percent,” said Sam Khater, Freddie Mac’s Chief Economist.
“Lower rates are bringing potential home buyers who were previously waiting on the sidelines back into the market and builders already are…
Mortgage rates dipped below 7% for the first time since August after the Federal Reserve set the stage for rate cuts in the coming year.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.95%, down from the week prior’s 7.03%. A year ago at this time, the 30-year FRM averaged 6.31%.
It is now down nearly 90 bps in the last six weeks. This lowers the monthly mortgage payment for a $400,000 house to $2,118, down $183 from recent peaks.
The 15-year fixed rate, on the other hand, rose to 6.38%% from 6.29%. A year ago, it averaged 5.54%.
“Potential homebuyers received welcome news this week,” said Sam Khater, Freddie Mac’s Chief Economist.
“Given inflation continues…
