Market Update - September 25th, 2023
Happy first Monday of Fall! We hope everybody had a great weekend. All the OSU fans have a little extra pep in their step today strutting into the office. Kreg and I are here, once again, to deliver the recap on everything that happened in the mortgage industry last week that affects you. Enjoy!
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Fed Holds Interest Rates
On Wednesday, Jerome Powell held the Federal Funds Rate at 5.50% but signaled the likelihood of at least one more quarter-point increase before the end of 2023. This was exactly what the markets had predicted, so it was a non-event from the standpoint of its effect on mortgage rates. They remained unchanged and held pretty flat through the end of the week.
Key Takeaway: The September Fed meeting was less about the pause in hikes and more about the hawkish overall tone. Remember, a “hawkish” Fed is one that supports raising rates to tackle inflation. The Fed is more optimistic in the economy suggesting GDP will grow 2.1% this year vs. 1.0% in the last meeting. They also believe unemployment will be lower than anticipated in the last meeting. That means they think they’ll need continued policy to tame inflation. The famous “dot plot”, which we’ve shared historically, revealed that many of the committee members on Jerome’s team now anticipate a higher funds rate through 2024 and 2025. By the end of 2024, the members now predict a rate of 5.1% vs. 4.6% from the June meeting (chart below). The end of 2025 prediction is 3.9% vs. 3.6% from June.
CFPB Looks to Remove Medical Bills from Credit Reports
Last week the Consumer Financial Protection Bureau (CFPB) announced its intentions to remove medical bills from US credit reports. This goes a step further than the April 2023 credit bureau update which removed any unpaid medical collections below $500. Due to inaccuracies in medical billing, the agency believes many Americans would benefit from the removal of medical bills from credit reports. Medical debt makes up 58% of all collection tradelines. Today, medical collections aren’t necessarily factored into the underwriting on home loans. However, they are more than likely dragging down overall credit scores. In theory, credit scores should improve once medical collections are removed allowing more folks to qualify for home or auto loans.
Realtor Value Bomb : 8 Books Every Realtor Should Read
We can all use some extra coaching to help our business grow. A great way is through a good book. There are a few on our reading list that realtors can leverage. We’ve compiled a list based on feedback from some of our peers in both the realtor and lending space. They have seen transformational growth in their business. If you’re in the car all the time, pick up the audiobooks instead. You owe it to your 2024 self to start the process now to make a few small changes that can have big impacts.
Instagram Posts from Last Week
Don’t hesitate to reach out if you need anything at all. Have a wonderful week!