Yes, yes. The Fed bumped rates. Unanimously. The first since July 2023. It's not a surprise or exciting when everyone predicted it.
The dot plots were the more interesting thing. We're now at greater than even odds for a hike next month and about 92% chance of a a bump in December. The dot plot shows 8 votes for another hike in 2027, 6 for a hold, and only 4 for cuts.
The silver lining is the markets liked it. It restored confidence in the Fed's ability to control inflation, and so bond markets calmed and rates actually dropped. We called it!
What's interesting is that you could argue this was a "headline bump". 25BPS isn't enough to control inflation, and if they were serious about it they would have done 50BPS off the start, even following their own shared rhetoric. Instead, I believe this was predominantly a bump done for the markets to let them know they're watching inflation and trying to be independent of political pressure.
How independent? Well, I'm not betting on those greater-than-even odds on another bump right before midterms. I think that'll come after during the December run.
How'd the market do? Well, rates bumped up 19BPS to 6.95%, and have recovered some since then. Refinances dropped 9% for the week, and purchases only down 1%.
NAHB's housing index fell 3 more points for a fresh 12 month low. Future expectations took a big drop, and we're up another 3% of builders cutting prices (total: 38%).
Housing starts fell by 2.6%. However, it's worth noting that single family starts actually bumped up 7.6% for the month, it was multifamily dropping the sector down.
Vantage is struggling to meet the "available immediately". LOS providers are still working to support multiple providers, so IMBs or banks not using custom software are unlikely to see widescale adoption. A majority of investors have still not confirmed positive or negative on their takes, and those that are have also introduced overlays (such as primary only).
UAD continues to loom. November is rapidly approaching, but we're seeing still a large number of appraisers not adopting. Suburban and urban areas are likely to be okay, but rural areas should be prepared for things to get ugly. Anecdotal reporting from talks with several lenders indicate rural reports taking up to a week longer and $500 more per appraisal.
Appraisers are sharing that since it's 4x the data points, they'll just stick to FHA/VA appraisals for now and do conventional as they need to pay the bills. Others are pointing the finger at appraisal software problems and glitches for their non-readiness. It'll be fun.