Ongoing market uncertainty surrounding the Federal Reserve’s interest rate trajectory has led to recent spikes and fluctuations in rates, according to a joint letter from industry leaders. The Mortgage Bankers Association, National Association of Realtors, and National Association of Home Builders have appealed to Fed chairman Jerome Powell and the Board of Governors to refrain from further increases in the federal funds rate.
The letter also emphasizes the importance for Powell to clarify that there will be no selling off of MBS holdings until stability is achieved in the housing finance market and mortgage-to-Treasury spreads return to normal levels. This would provide greater certainty regarding future rate changes as well as plans for managing MBS portfolios.
In conclusion, with housing activity accounting for approximately 16% of GDP according NAHB estimates, it is crucial that these measures are taken by the Fed in order prevent any potential negative impact on this sector.
