What You Need to Know This Week in the Mortgage Industry: Key Insights From Optimal Insights Podcast | Sept. 30, 2024
Optimal Blue
Bridging the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform
Are you prepared for the latest shifts in the mortgage industry?
In the inaugural episode of Optimal Insights, hosted by Jim Glennon , vice president of hedging and trading client services, we are joined by Optimal Blue experts Jeff McCarty , Kevin Foley, CFA , and Alexander Hebner .
Here’s what you need to know this week.
Key Insights and Trends
Understanding the Federal Reserve’s Dual Mandate
? Inflation and Employment: The Fed’s focus has shifted from inflation to employment, with recent data showing a softening job market.
? Impact on Rates: A recent 50 bps cut by the Fed aims to protect economic growth. ?Expectations for future cuts have helped push mortgage rates lower.
Key Market Indicators to Watch
? Personal Consumption Expenditures (PCE): The Fed’s preferred inflation measure came in at 2.2%, close to its target. This indicates a cooling inflation rate, which has significant implications for interest rates and the mortgage market.
? Non-Farm Payroll: This upcoming economic indicator, which highlights the current unemployment rate, is important to watch given its influence on the Fed’s perception of the economy's health.
Current Interest Rate Trends
? OBMMI Data: The Optimal Blue Mortgage Market Index (OBMMI) shows a significant drop in interest rates, nearing 6% from over 7% in the past 90 days.
? Volume Trends: Contrary to typical seasonal patterns, lock volumes have increased steadily, with September on track to be one of the highest in two years.
Analyzing Purchase vs. Refinance Breakdown
? Shift in Volume: The percentage of refinance transactions has increased from 15% to 30% as rates drop, offering opportunities for borrowers to lower their interest rates.
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Practical Actions You Can Take Today
Leverage Data Tools
? OBMMI: Review the OBMMI to track daily interest rate trends and make data-driven, informed decisions.
? PPE Tools: Explore the tools available in the Optimal Blue PPE to analyze market data and optimize your products and pricing strategies.
Focus on Recapture
? Client Engagement: It's time to start executing your strategies to engage past clients who may benefit from refinancing at lower rates.
Stay Informed
? Economic Indicators: Regularly monitor key economic indicators such as PCE and unemployment reports to anticipate market movements.
? FedWatch Tool: Use the CME FedWatch tool to keep track of market expectations for future Fed rate adjustments.
For more information about these topics, listen to the full podcast episode on major platforms or watch the full episode on LinkedIn/YouTube.
The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Optimal Blue, LLC.
How are you navigating the current trends in the mortgage industry? Share your experiences and strategies in the comments, and don’t forget to subscribe to the Optimal Insights podcast .