Mortgage interest rates sank to 6.60% last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.60%, down from 7.08% the week prior. This is the largest weekly drop in 40 years. The 15-year fixed-rate mortgage also fell from 6.38% to 5.98%. A year ago, it averaged 2.39%. As a result, the typical monthly mortgage payment declined by $100, giving a typical homebuyer with a $2,500 budget $12,000 more purchasing power over the course of just one week. “Mortgage rates tumbled this week due to incoming data that suggests inflation may have peaked,” said Sam Khater, Freddie Mac’s Chief Economist. “While the decline in mortgage rates is welcome news, there is still…
Mortgage rates exceeded 6% last week for the first time since 2008, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 6.02%, up from 5.89% last week. A year ago at this time, the 30-year FRM averaged 2.86%. “Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week, exceeding six percent for the first time since late 2008,” said Sam Khater, Freddie Mac’s Chief Economist. Inflation rose more than expected in August, up 8.3% YOY, though prices are down some from record highs earlier this year. Analysts had anticipated an 8.1% YOY increase. “Today’s evidence of a peak in US CPI might be welcome but the figure of 8.3% was…
Mortgage rates continued rising last week, up from 5.55% to 5.66%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.66%, continuing its trek towards 6% after a few weeks of reprieve in the low 5’s. A year ago at this time, the 30-year FRM averaged 2.87%. “The market’s renewed perception of a more aggressive monetary policy stance has driven mortgage rates up to almost double what they were a year ago,” said Sam Khater, Freddie Mac’s Chief Economist. “The increase in mortgage rates is coming at a particularly vulnerable time for the housing market as sellers are recalibrating their pricing due to lower purchase demand, likely resulting in continued price…
Inflation jumped by 9.1% YOY in June, more than analysts predicted and the largest gain since 1981, according to data released by the Labor Department today. The Consumer Price Index showed inflation rising 1.3% month-over-month, its largest jump since 2005. Predictions ahead of the data’s release forecast a 1.1% rise from May and an 8.8% increase YOY. This is the fourth consecutive month that analyst predictions fell short. Another month of skyrocketing inflation suggests that officials will be forced to continue aggressively raising interest rates. But rate hikes have stoked fears of a recession. Strategists at Goldman Sachs recently upgraded their recession probability to 30% from 15%. “We now see recession risk as higher and more front-loaded,” Goldman Sachs Chief…
With the July Federal Open Markets Committee meeting fast approaching, speculation about another substantial rate hike is running rampant. After June’s historic 0.75 percentage point interest rate hike, the third hike this year and the largest since 1994, analysts are watching the Fed closely. Recession fears are rapidly growing, with 70% of economists expecting it by 2023. But Federal Reserve Chairman Jerome Powell said he was more concerned about high inflation continuing than about the possibility of rising interest rates causing a recession. “Is there a risk we would go too far? Certainly there’s a risk,” Powell said this week. “The bigger mistake to make, let’s put it that way, would be to fail to restore price stability.” Some experts…
Fannie Mae’s Economic and Strategic Research (ESR) Group has downwardly revised its full-year 2022 real GDP expectations, along with anticipated home sales and mortgage originations, according to the group’s latest forecast. They now expect full-year real GDP to grow at a reduced rate of 1.3%, a 0.8% decrease from their previous prediction, citing inflation, rising interest rates, and “a slowdown of global economic growth.” The forecast also predicts that Q2 2022 will see growth rebound to 1.6%, a reaction to Q1’s economic contraction of 1.4%. “Financial conditions have tightened significantly, and the economy is slowing faster than previously expected as markets adjust to the Federal Reserve’s tightening guidance,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. Mortgage…
The Federal Reserve raised interest rates for the first time since 2018 on Wednesday in an effort to combat rising inflation, and economists have mixed feelings about its impact on the housing market. The Consumer Price Index rose 0.8% in February, up 7.9% over the last year, to its highest rate in 40 years. As Americans spend more on less, the impact is becoming apparent. Retail sales rose 0.3% in February, a slowdown in the pace of spending that suggested inflation was taking its toll on American consumers. But while rising prices for gas and groceries may burden American households, it’s things like health insurance and housing that are the “silent killers,” according to Justin Wolfers, University of Michigan professor…
Good Morning! Today is Thursday, January 27. Supreme Court Justice Stephen Breyer is retiring. Neil Young is removing his music from Spotify, saying it has become “the home of life-threatening Covid misinformation.” The U.S. rejected Russia’s demands that NATO retreat from Eastern Europe and bar Ukraine from ever joining, but offered other areas of negotiation. The Mortgage Note Reports Rate Increases Into 2023: At least one economist says the Federal Reserve is already behind the inflation curve, and the mortgage industry should expect interest rate increases into 2023. Down, Up, Then Back Down: Mortgage loan application volume fell 7.1% from last week, with refis tumbling 13%, MBA reported. “Appropriate Pricing Policies”: CHLA sent a letter to FHFA Acting Director Sandra…
Investors and economic analysts are closely monitoring Omicron, the Covid-19 variant taking the news cycle by storm, as the country enters the busy holiday season. The question on mortgage professionals’ minds is: how will Omicron affect the housing market? Analysts’ answers are mixed, but the overall trend is cautious optimism. “Right now, we are looking at pretty severe reactions to the omicron news in the stock market,” Tomas Jandik, a finance professor at the University of Arkansas in Fayetteville, told Realtor.com. “The residential market may be more immune to COVID because of what we have already seen in the past waves of the virus.” “It is unlikely that rates will move down any further due to the new Omicron variant,”…
Good Morning! Today is Tuesday, November 23. The Justice Department will pay $130 million to the survivors and families of victims of the Parkland, FL shooting, settling a lawsuit that alleged the FBI failed to investigate tips in advance of the tragedy. A defense attorney in the Ahmaud Arbery case is under scrutiny after making comments in court about the toes of the deceased. An Airbus A340 plane has landed on Antarctica for the first time. And in mortgage and housing news… Powell Renominated: President Biden renominated Jerome Powell to chair the Fed. Here’s what industry analysts think about the move. Black Knight First Look: The national delinquency rate continued to improve at a slow but steady pace last month, with especially impactful declines for loans…
