Company
A US government-sponsored enterprise that buys and securitizes mortgages; it also publishes a widely cited weekly average mortgage rate survey.
US existing-home sales rose 1.5% in September to a 3.99 million annual pace, the National Association of Realtors said, but fell 2.2% from a year earlier. Many of those deals were signed at 30-year rates of 6.43% to 6.69%, below last week's 7.4%.
Reality
Pimco's Dan Ivascyn calls a 6% 10-year Treasury yield feasible after the benchmark touched a 24-year high of 5.34%. Hedging by holders of AI and mortgage bonds adds to the selling, so well-bid auctions do little for borrowers.
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Fannie Mae and Freddie Mac grew multifamily loans 8.2% in the year to the second quarter, nearly triple the 2.9% pace of banks' commercial real estate books. That growth is apartment debt, so Wolf Street's figures do not show office losses from the low-rate years moving to taxpayers.
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Life insurers' group ACLI says its US middle-class resilience index fell 10 points in the second quarter to 10, half its first-quarter reading. That still leaves it above the historical average, and the third quarter will show whether gas prices and slower wage growth push it below zero.
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Mortgage Bankers Association data put the 30-year fixed rate at 7.49%, its highest since November 2023, with purchase applications down 15% on the year. Buyers are retreating at current prices, and homeowners who want cash have moved to home-equity lines.
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FICO will cut about 15% of its staff, roughly 570 jobs, and book $27 million in charges, mostly severance, to fold AI into its products. The cut comes weeks after housing regulators moved to loosen FICO's grip on mortgage scoring, and the timing makes it as much a cost defence as an AI story.
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Redfin says 21.1% of US sellers cut asking prices in the four weeks to Sept. 20, a record for the time of year. Higher mortgage rates leave financed buyers stretched, so the leverage sits mostly with buyers who can close in cash.
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Freddie Mac has made capital-markets head John Glessner its chief risk officer as well, at no extra pay, after Anil Hinduja left the job. The role oversees the push to price VantageScore 4.0 loans like FICO loans, now about 5% of new GSE deliveries.
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Buyers pulled the 10-year Treasury yield from a 24-year high of 5.34% to a 5.233% close on Thursday, after its biggest quarterly rise since 1994. Part of that demand was a flight to safety, and part was a bet that the Fed holds off on further hikes.
Perspective Coverage
3 publishersReality
Freddie Mac's benchmark 30-year mortgage rate rose to 7.28% this week, a sixth straight weekly increase and the highest since November 2023. Since February it has risen as far as the 10-year Treasury yield, so the cost of a move this fall depends on the bond market's inflation outlook.
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US existing-home sales fell 2 per cent in August to a 3.98 million annual pace while listings rose to 1.62 million homes, the most since November 2019, and the ratio of the two is about 4.9 months of supply.
Perspective Coverage
3 publishersReality
The daily 30-year fixed reached 7.24% last week. Applications feeding Q4 closings are down far more than signed contracts, and the buyers still transacting are increasingly cash buyers.
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The bank's researchers say the scores Fannie Mae and Freddie Mac generate inside automated underwriting predict 90-plus-day delinquency at 24 months better than the measures pulled at application. Investors mostly see them in securities disclosures.
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William Pulte directed Fannie Mae to copy Freddie Mac and let servicers phone borrowers whose homes have appreciated. KBW's Bose George expects modest uptake and says the released capital goes to buybacks.
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A Pew study puts that band at 22.3% of originations in 2024, while scores of 700 and above gained 24.9 points over the same period. Existing home sales are now running at a 3.98 million annual pace.
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The 30-year mortgage sits 41 basis points above where it was last September, existing home sales have fallen three months running, and August's monthly inflation stepped back up to 0.4%. Housing-exposed plans need a new base case.
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A 6.71% mortgage sits 1.97 points above the 10-year Treasury, the same gap as before January's buyback fanfare, which means a 6% handle now needs a 4.03% ten-year that the market has not offered since mid-2023.
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The final rule's treatment of private mortgage insurance sets the risk weight on a segment that is 40% of purchase originations. The relief case compares net severity against gross.
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The 30-year fixed rate slipped two basis points to 6.65%, its second straight weekly decline. It is still seven basis points above where it sat a year ago.
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Pending home sales fell 2.3% in July to the second-lowest reading on record, and the West hit an outright record low. A fourth year at the bottom is not a cycle you wait out.
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