Industry Update: the Future of eClosing and RON

Join industry experts for an in-depth discussion on the future of eClosing and how hybrid and RON closings benefit lenders and borrowers.

DOJ v. NAR and the ethics of real estate commissions

Today’s HousingWire Daily features the first-ever episode of Houses in Motion. We discuss the Department of Justice’s recent move to withdraw from a settlement agreement with the NAR.

Hopes for generational investment in housing fade in DC

Despite a Democratic majority, the likelihood of a massive investment in housing via a $3.5 trillion social infrastructure package appears slim these days. HW+ Premium Content

How Biden’s Neighborhood Homes proposal impacts real estate investors

Dubbed the Neighborhood Homes Tax Credit, the proposal is part of the larger American Jobs Plan legislation — also known as Biden’s infrastructure plan. Here's a look into how it impacts real estate investors.

InvestmentsMortgage

Fannie Mae: New jobs report basically guarantees December rate hike

"We believe that today's firm jobs report seals the deal"

Earlier this week, the Federal Open Market Committee announced that it plans to leave the federal funds rate unchanged, but the way the FOMC framed the announcement led many to believe that a rake hike is coming in December.

And Friday’s jobs report did not contain any significant information that would warrant further delaying a rate hike – in fact, it all but guaranteed a December rate hike, according to Fannie Mae’s chief economist.

According to the latest report from the U.S. Bureau of Labor Statistics, the country’s total nonfarm payroll employment grew by 161,000 in October.

“We believe that today’s firm jobs report seals the deal for a rate increase in December,” Fannie Mae Chief Economist Doug Duncan said Friday.

“The ammunition for a rate hike includes a solid job gain in October, meaningful upward revisions for the prior two months, and the biggest annual wage gain since June 2009,” Duncan said. “The decline in the labor force participation rate is arguably a slight blemish.”

According to the BLS report, the seasonally adjusted labor participation rate fell from 62.9% in September to 62.8% in October.

“However, the drop in the broadest measure of labor underutilization – the U6 – to more than an eight-year low should overcome any concern that significant labor market slack remains,” Duncan said.

Duncan’s sentiments echoed those of Frank Nothaft, CoreLogic’s chief economist, who told the crowd at Wednesday’s "Data, Demand, and Demographics: A Symposium on Housing Finance" presented by the Urban Institute and CoreLogic, that the capital markets are already bracing for a rate hike in December.

But Nothaft noted that even if the FOMC does choose to raise rates for the second December in a row, it won’t impact mortgage interest rates significantly.

“I think mortgage rates are going to be with us for a long period of time,” Nothaft said Wednesday.

“I think we’ll see rates rise from dirt cheap to a very low level as we move into next year, still remaining below 4% all through next year,” Nothaft added. “We’re evolving into a new era in mortgage rates.”

Duncan said that it’s not a 100% sure thing that the FOMC raises rates in December, but notes that recent economic data isn’t providing the FOMC members with much of leg to stand on if they want to delay a hike again.

“As always, a few things can throw a monkey wrench into the Fed’s plan, but the bar for inaction this year is now extremely high,” Duncan said.

Most Popular Articles

The housing market is losing steam

Mortgage applications for new home purchases decreased 3% from May and 23.8% year over year, suggesting buyer fatigue in the housing market.

Jul 20, 2021 By

Latest Articles

This is your last chance to nominate a 2021 HousingWire Vanguard

You have to act now! Nominate your Vanguard before midnight tonight, Friday, July 23rd. HousingWire’s 2020 Vanguard Award program recognizes C-level industry professionals and business unit leaders who have become leaders in their respective fields within housing and mortgage finance — those whose leadership is moving markets forward, each and every day. Vanguards come from diverse backgrounds and […]

Jul 23, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please