Mortgage rates hold steady as markets weigh Fed remarks and Trump’s housing order

Article Summary

Mortgage rates remained relatively calm as investors and lenders continued to digest recent comments from the Federal Reserve and a housing-focused executive order from President Donald Trump.

More details from the Fed

HousingWire Lead Analyst Logan Mohtashami wrote that tighter monetary policy “has created financial pain for some AI companies.” As the Fed has increasingly focused on the inflation risks tied to artificial intelligence and debt financing, the 10-year Treasury yield has moved lower, putting downward pressure on mortgage rates.

Hector Amendola, president of Las Vegas-based mortgage lender SimplyPMG, said in an interview with HousingWire that he believes a December hike is already reflected in current pricing and that sharp moves in either direction are unlikely for the rest of the year.

“It’s kind of been par for the course now for a while, that rates are continuing to rise based on the expectation that the Fed will go up a little bit more until there’s a way to figure out how to tame inflation a little bit,” Amendola said.

Fed Chair Kevin Warsh said the central bank will move to fewer policy votes over the next two years. The Federal Open Market Committee (FOMC) currently meets eight times a year, with a vote after each meeting, but that total is set to fall to seven and then possibly six in the following years.

The change stood out to Amendola.

“I think it puts a little bit more weight on each of the meetings,” he said. “I also think it’s interesting, because as Warsh kicks over, you’re kind of wondering if it’ll be like, ‘Let’s break everything and see what happens and figure it out later,’ or are we going to continue to really look at the data and do what the data tells us?

“I think what I’ve seen so far is, it’s still a wait-and-see approach. Let’s see what the data says, and that’s kind of why I think this particular decision that came out [last week] was expected, because the data is saying, ‘Slow down.’”

Reaction to Trump’s executive order

Last month, President Donald Trump signed an executive order aimed at lowering costs across several parts of housing finance. The measures include proactive mortgage insurance cancellations for conventional loan servicers, an expanded title waiver program through the Federal Housing Finance Agency (FHFA), reduced rates on some government-backed loans and the creation of a manufactured housing task force.

Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM), said in his monthly “3 Points” video that “housing affordability continues to be front and center in Washington D.C. There’s a real focus right now on finding ways to lower the cost of homeownership, reduce friction in the mortgage process and make financing more accessible.”

He pointed specifically to the proposal to make the title insurance waiver pilot a permanent program, saying that earlier waivers on some low-risk refinances have been “saving consumers thousands of dollars.”

“Some of these ideas will help; some of them won’t help,” Ishbia said of the executive order. “We’ll see how it all shakes out. But I think these are good things they’re looking at doing.”

Amendola said his company has “always been big proponents” of waiving title insurance on refinance transactions with loan-to-value ratios below 80%. “Like, what are we really doing? It’s the same consumer. You know, all that stuff is still coming up,” he remarked.

He also said that allowing servicers of Fannie Mae and Freddie Mac loans to help borrowers cancel their mortgage insurance premiums once they reach the statutory threshold “is a bigger deal than people think.” U.S. Mortgage Insurers have expressed support for the move, while some analysts have described it as “fairly benign” for the financial performance of mortgage insurers.

“That’s extra revenue that they’re making right now that they, honestly, probably shouldn’t be making — and suddenly they’re going to have an impact on their end,” Amendola said. “But it’s going to be really good for the homeowner to free up some of that cash that can then turn into something else for them.”