Latest / Markets with Megan: A Quick Financial Markets Update / Did the Fed Rate Cut Just Save Housing? | S2 E080 | 09-24-25

Transcript

Did the Fed Rate Cut Just Save Housing? | S2 E080 | 09-24-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The housing market is starting to show some signs of life.
• 0:03
  Megan Horneman: It is Wednesday, september the 24th, and this is Markets with Megan.
• 0:07
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• 0:09
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• 0:13
  Megan Horneman: But we're here today to break down that economic data, specifically since we got that Fed rate cut last week that everyone was anticipating and now we're starting to see, does this have any impact on the housing market?
• 0:25
  Megan Horneman: The housing market's been struggling for years with high interest rates and low inventory, so let's break down a couple of the pieces of information we got this morning.
• 0:33
  Megan Horneman: First of all, the weekly mortgage application so this comes out every week and this is more of a real-time may be impacted by that Fed rate cut.
• 0:43
  Megan Horneman: Last week we did see a modest increase in mortgage applications, but this is on the back of the prior week, which jumped almost 30%, so it's okay to see a little bit of a slowdown there.
• 0:55
  Megan Horneman: The mortgage rate last week or the mortgage rate currently, I'm sorry has come down with what the Fed has done.
• 1:02
  Megan Horneman: It's about 6.3% and this is the lowest mortgage rate since the month of October.
• 1:07
  Megan Horneman: So we're seeing people more inclined to take out mortgages and then also refinance some of the mortgages that they may have.
• 1:14
  Megan Horneman: Realtorcom did report that at the end of 2024, there was about 20% of the outstanding mortgages that had a rate more than 6%.
• 1:24
  Megan Horneman: So we're starting to get into that nice refinancing activity Now.
• 1:29
  Megan Horneman: We also got information on both building permits and new home sales.
• 1:32
  Megan Horneman: These are for the month of August, so we're not really going to be able to say this is because of the lower mortgage rate At this time.
• 1:41
  Megan Horneman: We'll get more information in the coming months on that.
• 1:43
  Megan Horneman: But good news from this front.
• 1:45
  Megan Horneman: Specifically on the new home sales, building permits declined slightly, but when you look at new home sales, they rose 20.5% for the month.
• 1:55
  Megan Horneman: That's a big increase.
• 1:57
  Megan Horneman: All of the regions that we looked at did increase the median price, though this did jump to a three-month high and it's up 5% on a year-over-year basis.
• 2:08
  Megan Horneman: So people are still inclined to go out and buy these new homes, these new homes with the mortgage rates that haven't seen the full benefit of the decline from the Fed funds rate.
• 2:19
  Megan Horneman: And also keep in mind mortgage rates are based off of long-term interest rates and we've seen some volatility there from the long end of the curve.
• 2:27
  Megan Horneman: The month's supply now of new home sales is at the lowest level we've seen in more than two years.
• 2:33
  Megan Horneman: So we will keep watching this in the coming months.
• 2:37
  Megan Horneman: But keep in mind prices are higher, inventory is lower.
• 2:40
  Megan Horneman: We're seeing more activity, though.
• 2:42
  Megan Horneman: That's a good sign.
• 2:43
  Megan Horneman: That's all that we have today.
• 2:45
  Megan Horneman: We'll be back this week.
• 2:47
  Megan Horneman: We'll get the Fed's preferred inflation indicator tomorrow, that PCE core plus.
• 2:52
  Megan Horneman: We'll get the third reading on GDP for the second quarter of this year.
• 2:57
  Megan Horneman: If you want to see a history of our podcast, you can go to marketswithmeganfm.
• 3:01
  Megan Horneman: Thank you,