Welcome back to Mortgage Porter Weekly! This week we’re covering last week’s Fed and housing headlines, where mortgage rates stand, a packed economic calendar, and a spotlight on home equity lines of credit. Watch the video above, then read on for the details.
Recap From Last Week
Markets were volatile last week, with Fed comments and geopolitical headlines both in play.
Several Fed members suggested another rate hike may be needed to bring inflation toward the 2% target, and markets raised the odds of a hike at the October meeting. The Fed has two meetings left this year, October and December. Remember, the Fed Funds Rate is the overnight borrowing rate for banks, not a mortgage rate.
Comments from President Trump and Iran’s president at the U.N. added uncertainty around the conflict and negotiations, with markets watching oil prices.
In housing, new home sales rose 6.4% in August to an annualized pace of 684,000, and July was revised higher. The median new home price fell 5.8% from a year ago, but that doesn’t necessarily mean home values are falling — the median can shift with the mix of homes sold, and sales under $500,000 increased notably.
Locally, Northwest MLS home sales were down 7.6% from a year ago in August, while active listings jumped 22%. King County’s median sale price was $845,000, so buyers here have more choices and more room to negotiate.
Where Are Mortgage Rates Right Now?
Optimal Blue reports that the average 30-year fixed rate as of last Friday, September 25th, came in at 7.225%, continuing the trend higher.
A quick reminder: this index is an average drawn from about 35% of mortgage transactions — the lenders who use Optimal Blue. It’s not a rate quote, and you can’t lock last week’s rates today. Your credit score, loan-to-value, and other factors all affect what you may qualify for. This is simply here to give you a sense of which way rates are trending.
Economic Calendar
This week’s calendar is packed.
On Wednesday, we get the Fed’s favorite inflation gauge, the Personal Consumption Expenditures report, or PCE. The market expects August to come in between 0.3 and 0.4%.
We also have jobs data. ADP reports Wednesday, with markets expecting about 72,000 jobs added. Then the BLS Jobs Report comes out Friday, with expectations of about 84,000 jobs and unemployment holding steady. I’ll be watching for revisions to the previous report, which came in hot.
Looking ahead, the next Fed meeting is October 27th and 28th, and CME FedWatch currently shows 70% odds of a rate increase.
Mortgage-Backed Securities Update
It’s a tough day: MBS are down 53 basis points at the time I’m preparing this update. You can see how rough this month has been for mortgage rates.
Spotlight: Home Equity Lines of Credit
This week’s spotlight is home equity lines of credit, or HELOCs — a flexible way to tap the equity in your home. Rates can be variable, following prime, or fixed, and some are interest-only for a set period. Some replace your first mortgage, while others sit in second position and leave your existing first mortgage intact. How much you can qualify for depends on your credit score and your combined loan-to-value, and most lenders won’t place a HELOC behind two existing mortgages.
If you’ve been thinking about using your equity, or want a credit line in place for a “just in case” moment, let’s talk through your options.
Let’s Talk
If you have questions about your specific scenario — whether you’re buying, refinancing, considering a retirement mortgage, or just trying to figure out your options — I’d love to hear from you.
The Optimal Blue index reflects approximately 35% of mortgage transactions nationwide and is not a rate quote. Rates and programs are subject to change without notice.
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