In recent months, when interest rates have declined even slightly, loan applications have jumped, indicating that potential borrowers are keeping a close eye on interest rates. There could also be some relief on affordability as the inventory of homes for sale increased in February.

The CFPB survey found that large credit card issuers offered worse interest rates than smaller issuers across credit score buckets.

Federal Reserve Chair Jerome Powell acknowledged that housing sector activity has been largely subdued due to high interest rates. However, he said the central bank is “not targeting housing price inflation.”

Five Democrats in the Senate wrote to the Fed this week pushing for a reduction in interest rates. The senators made their case by citing high costs for mortgages and a limited supply of homes for sale.

An uptick in home sales is helping lenders to have a rosier outlook for 2024, but the mortgage lock-in effect could put a cap on expected growth.

FHA and VA lenders are gearing up for an uptick in purchase, refinance and renovation loans in the new year.

Industry and consumer groups want the VA’s upcoming Veterans Assistance Servicing Purchase loss-mitigation program to target borrower payment reduction, not a single interest rate target.

Endorsements of FHA and VA insured loans increased by 9.2% in the third quarter while total first-lien originations declined. (Includes three data tables.)

Economists project a modest uptick in mortgage originations next year as interest rates are expected to continue to fall. But the decline in rates will depend on how quickly inflation comes under control.

The Federal Reserve’s push to run MBS off of its balance sheet may cause interest rates to stay high even after quantitative tightening measures cease.