Daily Newsletter: Freddie Mac Sees Rates Remaining Below 4 Percent Over its Forecast Horizon

Freddie Mac’s first quarterly forecast for 2022 cites the need for improvement in the nation’s employment picture. Even though the December report from the Bureau of Labor Statistics showed the unemployment rate down 0.3 percentage points from the prior month at 3.9 percent, Freddie Mac’s economists say that job openings remain high at 10.6 million and nonfarm payrolls are 3.6 million lower than pre-COVID-19 levels. Even though the Consumer Price Index hit a 40-year annual high of 7.0 percent in December with the core CPI coming in at 5.5 and the Federal Reserve expected to begin to taper its asset purchase and raise the fed funds rate, Freddie Mac does not expect mortgage rates to spiral higher. They forecast the 30-year fixed rate, which hovered around 3.0 percent most of last year, to average 3.6 percent this year and 3.9 percent next year. Home sales were strong in 2021, expected to total 7.1 million units. Freddie Mac expects that demand will be stable this year due to low mortgage rates and the number of first-time buyers and other “demographic tailwinds.” The company is looking for only a small decline to 6.9 million total sales this year and 7.0 million in 2023. The increase in rates will cause some moderation in demand and deceleration of home price increases from the probably 15.9 percent rate last year to 6.2 percent this year and 2.5 percent in 2023. It is only fair to add that appreciation has been predicted to cool rapidly by most analysts for the past several years.

January 24, 2022 Housing News Freddie Mac Sees Rates Remaining Below 4 Percent Over its Forecast Horizon Freddie Mac’s first quarterly forecast for 2022 cites the need for improvement in the nation’s employment picture. Even though the December report from the Bureau of Labor Statistics showed the unemployment rate down 0.3 percentage points from the pr... (read more) Housing News Prices and Selection Are Changing Home Buying Plans The National Association of Home Builders (NAHB) says the effects of higher home prices and tight inventories appear to be weighing on home buying decisions. Rose Quint writes in NAHB’s Eye on Housing blog that the share of adults who said they p... (read more) Rob Chrisman Underwriting, POS, Subservicing, Lead Gen Products; Webinars and Events to Wrap up January Anyone who’s seen 1968’s “2001: A Space Odyssey” remembers the talking computer HAL (whose name was cleverly derived from subtracting one letter from IBM). We need more acronyms, right?! Here’s one I hadn’t heard: BNPL. The buy now, pay later industr... (read more) Mortgage Rates Making Sense of Rising Rates And The Risks Ahead The bond market returned from a 3 day weekend to find yields surging higher on Tuesday. That pushed mortgage rates to fresh 2 year highs and added emphasis to what has already been the sharpest rate spike since late 2016. Why are rates rising so quickly? Mortgage rates are based on mortgage-backed securities (MBS), which are essentially... (read more) 30 Yr. Fixed Rate 3.67% +0.00% Rate Change Points Mortgage News Daily 30 Yr. Fixed 3.67% 0.00 0.40 15 Yr. Fixed 2.93% -0.01 0.00 30 Yr. FHA 3.33% 0.00 0.00 30 Yr. Jumbo 3.32% 0.00 0.00 5/1 ARM 3.61% -0.01 0.50 Updates Daily - Last Update: 1/24 15 Yr. Fixed Rate 2.93% -0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 3.56% +0.11 0.70 15 Yr. Fixed 2.79% +0.17 0.60 5/1 Yr. ARM 2.60% +0.03 0.30 Updates Weekly - Last Update: 1/20 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 3.64% +0.12 0.45 15 Yr. Fixed 2.95% +0.22 0.43 30 Yr. Jumbo 3.54% +0.12 0.47 Updates Weekly - Last Update: 1/19 MBS / Treasuries MBS Live Recap: MBS Flip Script After Treasury Auction; Bonds Refuse to Chase Stocks MBS Flip Script After Treasury Auction; Bonds Refuse to Chase Stocks It was a fairly sloppy day of gains for the bond market with Treasuries noticeably lower in yield early and MBS underperforming. The script was flipped in the afternoon as a strong 2yr auction helped the market narrow down the value of shorter... (read more) UMBS 30YR 3.0 102.22 +0.13 Price / Yield Change MBS UMBS 3.0 102.22 +0.13 UMBS 3.5 104.42 +0.16 GNMA 3.0 102.14 +0.09 GNMA 3.5 103.44 +0.30 Pricing as of: 1/24 5:21PM EST 10 Year US Treasury 1.7742 +0.0037 Price / Yield Change US Treasury 2 YR Treasury 0.973 -0.043 5 YR Treasury 1.549 -0.023 7 YR Treasury 1.720 -0.008 10 YR Treasury 1.774 +0.004 30 YR Treasury 2.116 +0.031 Pricing as of: 1/24 5:21PM EST Latest Video The 2pm Bond Report - January 24, 2022 The 9am Bond Report - January 24, 2022 Treasury auctions $54B in 2-year notes The 2pm Bond Report - January 21, 2022 Around the Web CNBC Fed rate hikes will intensify a global debt crisis, research warns CNBC The stock market slide is unlikely to budge the Fed from tightening Reuters Wall Street closes higher in late market reversal Calculated Risk Blog Six High Frequency Indicators for the Economy Calculated Risk Blog Housing Inventory January 24th Update: Inventory Down 2.4% Week-over-week; New Record Low CNBC 'We are in a very precarious position.' How bond ladders can help fight rising interest rates Calculated Risk Blog Final Look at Local Housing Markets in December CNBC More than 5 million borrowers just missed their chance to save on a mortgage refinance CNBC Treasury yields dip slightly ahead of Fed meeting CFPB Consumer Financial Protection Bureau to Examine Colleges' In-House Lending Practices CNBC Markets are expected to remain on edge as the Fed meets in the week ahead Calculated Risk Blog FOMC Preview: Final Asset Purchase Announcement Expected; Hints at "Liftoff" in March Calculated Risk Blog Hotels: Occupancy Rate Down 16% Compared to Same Week in 2019

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