Mortgage rates

Lenders are brushing up on ways to minimize losses associated with the increasing costs to fund mortgage pipelines.

The FOMC held its target range for the federal funds rate at 5.25% to 5.5%, while updated quarterly projections showed 12 of 19 officials favored another rate hike in 2023, underscoring a desire to ensure inflation continues to decelerate.

And bond market pricing has moved higher in anticipation of today's Federal Open Market Committee announcement even though most expect no increase in short-term rates.

High mortgage rates and the lack of inventory for sale pushed the sector into a downturn twice recently - between May and November last year and in May of 2023 - according to First American

Nearly 60,000 deals to purchase homes fell through in August, according to a report released Friday by Redfin Corp.

The 30-year fixed moved 6 basis points this week as investors digested the news from the Consumer Price Index report.

Spreads with the 10-year Treasury are unlikely to narrow from outsized levels even as inflation cools and Fed tightening ends, said Odeta Kushi, an FA economist.

Even though the average for the 30-year fixed loan declined for the second straight week, a buoyant economy will affect future movements, Freddie Mac said.

"There is nothing that is saying we need to do anything imminent anytime soon," the Federal Reserve governor said in an interview on CNBC Tuesday.

Talk from the Federal Reserve about potentially hiking short-term rates again impacted longer-term bond yields.

The 30-year average jumped for the fifth week in a row and is likely to continue trending upward, economists say..

Key data points have shown price and wage pressures continue to dissipate, which should bolster the case for an end to rate increases, but strong labor-market activity may keep policymakers uneasy.

The average for a 30-year home loan marked the fourth straight week of increases, according to Freddie Mac.

Federal Reserve officials are more seriously discussing the possibility that they may not have to stop shrinking their massive balance sheet when they begin cutting interest rates, a readout from their most recent policy meeting showed. 

With prices continuing to increase and the conforming 30-year mortgage rising above 7% in July, the purchase market is in a holding pattern, Black Knight said.

A report by Black Knight shows still-increasing home prices, which is bad news for prospective buyers, but good news for existing homeowners, who are gaining equity.

The markets had a full week to absorb Fitch Ratings' U.S. downgrade, but today's inflation news could cause some near-term volatility.

Product availability for July remained at levels last seen in 2013 as rates briefly broke above the 7% mark during the month, the Mortgage Bankers Association said.

But a Zillow economist argues that there's plenty of evidence suggesting strong GDP and job growth had more to do with the increase than what Fitch did.

The yield on 30-year securities has climbed almost 25 basis points over the past three sessions, returning it to levels last seen in mid-November when inflation was still above 7%, more than double the current rate. Ten-year borrowing costs rose to around 4.15%.