Editor’s Note: The Mortgage Mix is RISMedia’s highlight reel of need-to-know mortgage-industry happenings. Watch for it every other Friday afternoon.
The numbers: Mortgage rates continue to reach new highs each week, quickly climbing in the 7% range and hitting a “nearly three year high,” as noted by Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit.
According to Freddie Mac, the 30-year fixed-rate mortgage clocked in at an average of 7.40%, and the 15-year fixed-rate mortgage at 6.73%. Both averages are well above their year-ago rates of 6.30% and 5.53%, respectively.
What does this mean: Generally, economists agree that geopolitical conflicts, tariffs and elevated energy costs are the main contributors to high inflation and, in turn, high rates.
Lisa Sturtevant—Bright MLS’s chief economist—described this in a recent report titled, “The New Normal for Mortgage Rates.”
“Today’s rates are obviously higher than they were during the pandemic, but they are also relatively high compared to the early 2000s,” the report stated. “The record-high Federal debt, ongoing geopolitical conflicts, and economic uncertainty have created a new floor for 10-year Treasury yields, which has set a new baseline for mortgage rates.”
She also pointed out how rates and unyielding home prices are pushing homebuyers to the brink of unaffordability.
“With nominal home prices at near record highs in many markets, the uptick in mortgage rates is causing more prospective homebuyers to hit an affordability ceiling,” Sturtevant said.
The Federal Reserve also considered these factors in their deliberation at the September meeting. The notes from the meeting revealed that 18 participants—experts, analysts and economists—generally agreed that they “had not seen sufficient progress on lowering inflation in recent months,” leaving the rate hike as a very likely outcome.
How is the market reacting: In response to heightened mortgage rates, mortgage applications have continued their steady decline. The latest MBA Market Composite Index reveals that the volume of mortgage applications decreased 4.2%.
Joel Kan—MBA’s vice president and deputy chief economist—stated that “very few homeowners have an incentive to refinance at these rates, and the jump in borrowing costs has caused many potential borrowers to step back from the purchase market.”
Garg reigns triumphant: Former Better CEO Vishal Garg celebrated after obtaining over 51% of shareholder votes and announced a 90-day plan to turn the company around. Better had also stated in an official release that they withdrew their challenge to the “preliminary report of the independent inspector of elections regarding the consent solicitation initiated by (Garg).”
This appears to end what was a bitter and public two-month fight over control of the company, with both sides battling it out in court and in the media after Garg was ousted suddenly back in August.
In the 90-day plan, the Garg Group outlines that they would reconstitute the company’s board of directors, appoint an interim chief executive officer, expand operational efficiency targets, accelerate revenue and production, divest non-core assets and authorize a share repurchase program.
Labor market still soft: The September Employment Situation Summary reveals that unemployment continues to sit at the low-4% range, yet MBA SVP and Chief Economist Mike Fratantoni noted that the growth in jobs by category was not equal.
“The three sectors that have contributed most of the job growth in recent months, health care, hospitality and government, showed slower growth in September. The financial sector continues to lose jobs at a slow pace, while construction jobs are increasing, particularly in nonresidential construction,” he said.
eXp and Newrez joint venture: At this year’s eXpcon in Salt Lake City, eXp Realty and Newrez announced their new mortgage joint venture, Revenos Mortgage. Planned to launch in early 2027, Revenos Mortgage will provide eXp agents and their clients with a streamlined lending experience, powered by Newrez.
“By combining eXp’s trusted local market expertise and Newrez’s scaled mortgage platform, including a broad range of lending solutions, technology and servicing capabilities, we can better support buyers throughout the homeownership journey,” Newrez President Baron Silverstein said. “Together, we can provide value at every step and remain a trusted resource for homeowners long after the initial transaction is complete.”
UWM reveals credit score policy: Mortgage lender United Wholesale Mortgage (UWM) announced a process enhancement that automatically selects the best credit score returned for a consumer by obtaining FICO® Scores and VantageScore® 4.0 on all credit pulls. According to their release, the enhancement is one step in an effort toward making credit evaluations simpler and more “borrower-friendly.”
“Our goal is simple: Put borrowers in the best possible position while making it easier for brokers to do business,” UWM President and CEO Mat Ishbia said.
