Mike Fratantoni on the MBA’s mortgage market outlook

Fratantoni discusses the MBA's November forecast, which includes revised estimates for Q3 and Q4, as well as predictions for next year’s purchase market.

Housing market forecast: It’s about politics, not economics

COVID protections for households and support for financial markets are set to expire at the end of 2020. How will this impact the housing market in 2021?

Buying a home in a competitive market

We couldn’t be more thrilled about interviewing a real estate agent for the second episode of Girlfunds, a show where we give you our two cents on money.

Building the one-touch digital mortgage

As Katherine Campbell drives toward a one-touch mortgage, she’s taking time to share what she has learned along the way.

Politics & Money

Fed says expect low rates through 2023

The central bank pledges to continue bond-purchasing program that have driven down financing costs

The Federal Reserve left its overnight lending rate unchanged on Wednesday at the end of its last meeting before the Nov. 3 presidential election and said it expects to keep it near zero for more than a year.

In a statement released Wednesday, all 17 members of the Federal Open Market Committee said they expect to keep the central bank’s benchmark rate near zero at least through next year, and 13 estimated it would stay there through 2023.

That will be a boost for homebuilders taking out business loans, and will keep rates low for home equity loans tied to prime rates, which are benchmarked to the Fed rate.

The committee also reiterated its commitment to purchase mortgage-backed securities and Treasuries to support the flow of credit. Fed purchases have helped to drive mortgage rates to the lowest level on record by boosting competition for the bonds, which compresses yields.

“Over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the FOMC said in its statement.

In the first meeting since last month’s overhaul to its inflation policy, the committee provided more specifics.

“The committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well-anchored at 2%,” the statement said. “The committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.”

In a press conference following the release of the FOMC statement, Fed Chairman Jerome Powell said more stimulus is needed from Congress to help an economy struggling with the COVID-19 pandemic.

“My sense is that more fiscal support is likely to be needed,” Powell said. “Of course, the details of that are for Congress, not for the Fed. But I would just say there are roughly 11 million people still out of work due to the pandemic and good part of those people were working in industries that are likely to struggle. Those people may need additional support as they try to find their way through what will be a difficult time for them.”

Leave a comment

Most Popular Articles

Fannie Mae, Freddie Mac conforming loan limits increase for 2021

The Federal Housing Finance Agency announced new conforming loan limits for Fannie Mae and Freddie Mac for 2021. The increase is up 7.5% from 2020’s limit of $510,400 and marks the fifth consecutive year of increases.

Nov 24, 2020 By

Latest Articles

CoreLogic responds to investor groups’ initiation of written consent process

The battle for CoreLogic’s board continued on Tuesday after Senator Investment Group and Cannae Holdings, who attempted an unsolicited takeover bid of the company this summer, initiated a written consent process to remove and replace additional directors.

Nov 24, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please