The FOMC statement and a Summary of Economic Projections land at 2:00 p.m. Eastern today, and the market arrived already convinced. Redfin puts the odds of a hike above 90%; Mortgage Professional America reports the odds of more than one hike are climbing. It would be the first increase in three years. But the statement is not really the event — the dot plot is. A hike delivered alongside projections that show the Committee close to done reads nothing like the same hike delivered alongside dots that march higher through 2027, and the bond market will trade the second half of that sentence. Plan your afternoon around 2:00, not around the headline.
Tuesday was the day the ten-year cleared 5%. It did not hold. The ten-year is 4.98% this morning, and Mortgage News Daily noted that every attempt to push yields through 5% on Tuesday was met with a supportive bounce — value buyers showing up at a level that has not been available for years. None of that has reached the rate sheet yet. Bankrate's conventional 30-year printed 7.02% this morning against 7.00% Tuesday, 6.83% a week ago and 6.69% a month ago. That is the top of an 84-day range that runs 6.47% to 7.02%, so today is the high, not a point inside it.
The hike, if it comes, is being delivered into a housing market already cooling without help. Consumer sentiment fell to 47.8 in September from 51.7. Existing sales slipped to a 3.98 million annual pace in August from 4.06 million. MBA's new-home application index fell 6% from July — a fifth consecutive monthly decline — with the average new-home loan size down to $373,194. Headline CPI ran about 3.4% year over year in August, and that number is the entire case for tightening; every line in the housing column is the case against. Housing starts and permits print this week, and Freddie's weekly survey lands tomorrow, measured through Tuesday, so it will read cooler than your sheet does.
For the pipeline, the arithmetic is concrete. On a $400,000 loan, the 19 basis points Bankrate has added in a week cost about $51 a month in principal and interest; the 33 basis points added in a month cost about $89; the full run from June's 6.47% low costs about $147. Freddie's PMMS is at 6.76% as of September 10, up 5 basis points on the week and 9 over 30 days — a different survey measuring a different week, so quote it as the weekly survey and not as today's number. Anything floating into this afternoon is a bet on the projections, not on the hike, because the hike is already in the price. Extensions are the cheaper decision than a reprice at 2:15.
On the regulatory side, FHFA opened the door for servicers to contact borrowers proactively about mortgage insurance cancelation, with Director Pulte pushing for lower MI costs alongside it. That is a live reason for every 2023 and 2024 vintage borrower who has crossed 80% loan-to-value to hear from someone this week, and if the servicer is slow, it should be you. Matt Jones — currently HUD's deputy assistant secretary for single-family housing and formerly of the MBA — was nominated as FHA commissioner. In real estate, a federal court denied Zillow's injunction against MRED and sent the claims to arbitration while pausing Zillow's claims against Compass, and a separate letter to the National Association of Attorneys General urged state AGs to examine pocket listings and "Contact Agent" referral routing — that last one is the piece with RESPA implications if you have a lead-generation agreement in place. Elsewhere, National Mortgage News reports builder lending units leaning harder on FHA to keep homes financed, and Scotsman Guide notes record homeowner equity is unlikely to recede even as the 30-year spikes, which means the cash-out and second-lien conversation is in better shape today than the purchase one.
pull every file with a lock expiring inside 21 days and decide before 2:00 p.m. Eastern which ones you extend and which ones you let ride. After the dots print you will be reacting to a repriced sheet instead of choosing from one.