Economy

First Foundation will use the large investment to shrink its multifamily loan portfolio, which has weighed down its earnings since interest rates began rising.

The core personal consumption expenditures price index, which strips out food and energy, increased 0.1% from the prior month, the smallest in six months.

But economists seem to differ on what the latest movement in mortgage rates means for the summer home sales business.

The sales pace is now at the low end of the range seen over the past year, suggesting limited momentum amid a lack of affordability.

The decline for the third consecutive week reflects investors' belief that the Federal Open Market Committee is likely to cut rates this year.

A decline in interest rates during the first quarter drove a Freddie Mac indicator higher for the first time since mid-2023, while a leading investment firm announced a deal aimed at boosting originations for government-sponsored enterprise financing.

Federal Reserve Chair Jerome Powell says crushing inflation is the most important thing the Fed can do to reduce costs in the housing market. Some economists and policy specialists say higher rates are not the only tool at its disposal.

Markets appeared to welcome signs of future rate relief, with the latest Freddie Mac average falling for the fifth time in six weeks.

The Federal Reserve chair said a rate cut would not solve the underlying issues driving up shelter costs, even as housing becomes a disproportionate driver of inflation.

Observers say the stronger-than-expected Bureau of Labor Statistics employment data could leave the Fed pondering when, or even if, to cut short-term rates this year.

Still, the expected year-over-year pace of home price increases in 2024 is faster than what the first quarter Fannie Mae Home Price Expectations survey has predicted.

The 30-year fixed-rate mortgage average dropped back below the 7% level as investors reacted positively to news the economy is slowing, Freddie Mac said.

The company foresees a dampened mortgage originations market through 2026, as last year's trends continue to have an impact on housing.

Yields on the benchmark 10-year Treasury also rose in the past week as bond and note auctions got tepid responses from investors.

In a speech, the Federal Reserve governor said she would have liked to see the Federal Open Market Committee move more quickly to reduce its holdings. The central bank is poised to begin slowing the pace of balance sheet runoff this week.

Former Federal Housing Finance Agency Director Mark Calabria may return, but analysts told an industry meeting someone else is more likely in line for the role.

The 10-year Treasury yield, one of the mechanisms used to price 30-year fixed rate mortgages, is higher than where it was one week ago.

Fannie Mae called out AI's potential to end defects as Freddie Mac sought to spur current loan-quality tool use by quantifying benefits at an industry meeting.

Fannie Mae economists suggest home sales will remain resilient amid anticipated dips in both home loan volume and consumer spending.

The move may help address nonbank liquidity risks highlighted in a recent FSOC report, Sam Valverde, acting president, told attendees at an industry meeting.