Housing industry groups call on the Fed to ease up on rates

Plus, a peaceful desert retreat

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  October 21, 2023 • Issue #114 Happy Saturday! This week, we’re discussing why trade groups are asking the Federal Reserve to clarify its stance on future rate hikes — plus, a California home straight outta Tatooine.

Industry leaders call for more clarity from the Fed

Getty Images In a world where mortgage rates are flirting with 8%, a group of housing industry trade associations have banded together to ask the Federal Reserve to stop waffling about what it plans to do about it.  Last Monday, October 9, the Mortgage Bankers Association (MBA), National Association of Home Builders (NAHB) and National Association of Realtors (NAR) sent a letter to Fed Chairman Jerome Powell expressing concern that the central bank’s reticence to say outright whether it will or won't hike rates again this year has exacerbated a "real estate market that is already straining." To bring stability back to the market, the groups write, the Fed needs to:  Publicly acknowledge that the central bank isn’t contemplating further rate hikes Promise not to sell any mortgage-backed securities (MBS) until the market has stabilized and the mortgage-to-treasury yield spread has normalized The first point is pretty self-explanatory, but the authors' request concerning mortgage-to-treasury yields is a little murkier. Mortgage rates are loosely tied to the movement of the 10-year Treasury note — an investment security issued by the U.S. government that is often used as a benchmark for other interest rates, including mortgages.  Usually, the "spread" (or difference) between the 10-year yield is about 1.8 percentage points lower than mortgage rates but right now it's at about 2.6  percentage points. If the spread were at its normal range, mortgage rates would be about 0.80 percentage points lower than they are now. The next Fed meeting, and the next opportunity for the central bank to say something definitive about future interest rate hikes, is set for October 31/November 1. The only certainty? Rates won't be dropping anytime soon.

Why Fed Rate Hikes May Be on Hold for the Rest of 2023

Listing of the week

Trent Teigen An out-of-this-world home in Joshua Tree, California This house, which looks a bit like the Airbnb version of Luke Skywalker’s childhood home, seamlessly coexists with the desert surrounding it. Known locally as the “Bonita Domes,” for obvious reasons, the property is just a five-minute walk from Joshua Tree National Park. Amenities include a newly built pool, an outdoor kitchen and a "communal bath dome." And if you feel the need to withdraw even further from society, you can retreat to the detached temple included as part of the property. There are a total of five bedrooms and three bathrooms, and the home is currently being used as an income-generating property. Listed by James Bianco of Coldwell Banker Realty, you can own this unique dome-home for an extra special $1.8 million. Trent Teigen

’Til next time, P.S. Have you seen a unique listing on social media I should feature in this newsletter? Or have a question about housing or mortgages you desperately want answered? Let me know on Twitter at @LeslieLCook or via email at leslie@money.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page.

Money’s Essential Home Buying Resources: Fall

On the hunt? Check out Money’s Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates. Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips. Key question: How much house can I afford?

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