Originations

The Congressional Budget Office report on the Home Loan banks illustrates the ways the nearly 100-year-old system is integral to the U.S. economy, and its benefits for American consumers.

But the 30-year fixed rate mortgage is still near 7%, and that remains the overhang on the housing market, Freddie Mac said.

Instability in mortgage rate movements should continue in the weeks ahead, even with Fed Chairman Jerome Powell's comments on inflation.

Industry veterans are wary of prospective borrowers who can't pay for agents, and of compensation guidelines clashing with government mortgage lending programs.

The average 30-year fixed mortgage rate for conforming loans fell, according to Freddie Mac, even as the 10-year Treasury yield rose nearly 18 basis points from the start of this week.

While some said the agency was ignorant of its own rules, one trade group praised the goals of the posting.

Regulatory reform – rather than Biden's proposed solutions – is needed to fix the inventory crisis, some say, but others applauded the president's buyer cost-cutting initiatives.

The title proposal is part of a broader housing cost reduction proposal being discussed in the State of the Union speech.

But those rates are still relatively high, and that is a barrier to entry for potential homebuyers, Freddie Mac said.

The latest inflation news has created concern that the Federal Reserve's pivot on short-term rates could be delayed.

Loan volumes fell for the third straight week, with depressed demand for government lending driving activity downward, the Mortgage Bankers Association said.

For the first time since mid-December, the Freddie Mac survey reports mortgage rates over 6.7%.

The company was able release credit reserves because of actual and forecasted prices that boosted net income, CEO Priscilla Almodovar said.

The government-sponsored enterprise financed 955,000 mortgages last year, down from the 1.8 million loans it backed in 2022.

Only a few dozen mortgage firms could likely afford the $7 million ad for this year's big game, a marketing veteran said.

Even with the 9 basis point rise this week, they have remained at the same level since mid-December, and that should bring people into the market, Freddie Mac said.

Its January forecast reverses the call first made in April 2022 that the U.S. economy would slip into an extended downturn.

A common concern in housing finance reactions has been the lack of accommodation for strategies routinely used to manage credit, rate and liquidity exposures.

"Someone somewhere has not taken a victory lap for the work that has been done to rehabilitate the enterprises." Priscilla Almodovar said in a Bloomberg interview.

The move is somewhat counterintuitive relative to other market signals but Fannie Mae generally forecasts a net positive shift in lending conditions this year.