Markets in a Minute, Housing Market News, October 12, 2023

This week’s financial and housing market activity update…

The Economy

• Minutes from last month’s Federal Reserve meeting reveal that officials are considering the necessity of implementing a ‘restrictive’ policy with higher interest rates to combat ongoing inflation. 
• While wholesale inflation exceeded expectations last month, consumer inflation has met expectations but remains above the Federal Reserve’s target.
• Encouragingly, jobless claims remained at historically low levels last week, indicating a resilient job market in the face of rising interest rates.

Housing Market News

• Several prominent housing organizations, including the NAHB, NAR, and MBA, have jointly submitted a letter to the Federal Reserve expressing their concerns about the potential adverse effects on the housing market due to ongoing policy rate increases. Included in the letter was a request that the Fed announce that it is not considering further rate hikes and that it will refrain from selling off mortgage-backed securities before the Treasury yield curve normalizes. In addition, the plea stated that “We urge the Fed to take these simple steps to ensure that this sector does not precipitate the hard landing the Fed has tried so hard to avoid”.
  
• Notably, there has been a 15% increase in Adjustable Rate Mortgage (ARM) applications over the past week, accounting for 9.2% of all applications—the highest share since November 2022.

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