Market Update - October 13, 2023

This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.

Rates are provided by Housing Wire in conjunction with Optimal Blue. Rates are updated in real-time. Optimal Blue data is calculated using actual locked rates with consumers across 42% of all mortgage transactions nationwide. Rates are inclusive of locks that occur below par, at par and therefore consider discounts and rebates.

Market Commentary:

For the week of Oct 6th – Oct 12th, 30-year and 15-year interest rates decreased.

Key economic data releases, including the Producer Price Index and Consumer Price Index, will be in the spotlight as analysts look for signs of moderating inflation. A decrease in inflation could further substantiate the Federal Reserve's current dovish position, possibly delaying additional rate hikes.

These indicators are important metrics for assessing the health of the economy and hold significant influence over policy decisions at the Federal Reserve and other central banks around the world. A falling inflation rate could ease the pressure on the Federal Reserve to increase rates, potentially extending the pause in rate adjustments.

Several Federal Reserve officials have expressed concerns about tightening financial conditions and the potential impact of rising Treasury yields. These concerns may serve as a catalyst for the Federal Reserve to maintain the current interest rates.

“We think the Fed is done” raising interest rates, says Gene Goldman, chief investment officer at Cetera Investment Management. Goldman cites declining inflation and the pullback in the stock market and rising bond yields as reasons for his assessment.

“It really is not going to matter if we have a recession or not,” he adds, suggesting that any downturn would be relatively mild and that certain sectors, such as manufacturing, are already on the path to recovery.

In a positive development, some recent indicators of economic growth have exceeded expectations. The September jobs report, released this past Friday, showed the creation of 336,000 new jobs, far surpassing the forecasted 170,000. Concurrently, the rate of wage growth appears to be stabilizing.

Mortgage Rate Forecasts Through Mid-2024

Fannie Mae and the Mortgage Bankers Association predict that mortgage rates will fall next year, but they disagree about the fourth quarter of 2023.

Fed Watch: Looking ahead, all eyes are now on the upcoming November 1st Federal Open Market Committee (FOMC) meeting. According to the CME Group, 10.0% of forecasters predict an increase in interest rates, while 90.0% predict rates will remain the same. None of the forecasters expect rates to decrease.

Quick Look Back - Market Update Weekly Calendar - 10_12_2023

Market Review:

Per Black Knight's Production Metrics, the breakdown of mortgage production volume is as follows: 85.78% for purchase transactions, 12.21% for cash-out refinances, and 2.01% for rate and term refinances.


Per Black Knight 55.48% of all Retail loan production were Government Loans (FHA, VA, USDA), while 44.52% were Conventional and Non-Conforming loans.

News You Can Use:

*Communication is intended for Industry Professionals only and not intended for Consumer Distribution

Interest rate and annual percentage rate (APR) are based on current market conditions as of 10/13/2023, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 10/13/2023 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac's economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac's business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an "as is" basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.