🚨 Rates eased 15 bps week-over-week, reviving activity across refinance and purchase channels. Refi apps jumped 12.2%, while purchases rose 6.6%. The shift aligns with Fed cut expectations, setting up cheaper debt into Q4.
30-yr fixed avg: 6.49% (–15 bps WoW)
Mortgage apps: +9.2% WoW
Refis: +12.2% WoW
Purchases: +6.6% WoW
Loan Performance
Refi volumes confirm households are rate-sensitive. Early cures on higher-rate loans could accelerate, reducing extension risk. However, default pipelines remain unchanged until broader employment data stabilize.
Demand Dynamics
Purchase applications rising signals incremental stabilization in housing demand. Supply constraints remain, but affordability is easing slightly, allowing more households to re-enter the buyer pool. Multifamily demand could cool marginally if buyers shift back toward ownership.
Asset Strategies
Owners can reposition refi candidates earlier than expected. Developers should re-run condo and SFR-BTR absorption models, as marginal ownership demand could lift take-out velocity. Operators should calibrate leasing concessions as household mobility rises.
Capital Markets
CRE debt pricing should track this rate move with a lag. Agencies may quote 25–50 bps tighter spreads for top assets, but investors remain cautious. Loan-to-cost limits and DSCR floors will hold until the Fed decision is confirmed.
📉 Rate relief fragile, not guaranteed.
🔄 Refis lead the rebound; purchases catching up.
⚠️ Don’t overstate rent growth on one print.
🏦 CRE debt savings materialize with lag.
🛠 Operator’s Lens
Lock insurance/utilities early to capture cost savings.
Pull forward rate-lock talks with lenders, include break-funding clauses.
Use cash flow relief to stabilize operations, not overextend on rent assumptions.
The Fed meets next week with markets pricing a 25 bps cut, small odds of 50. A hotter CPI/PPI could trim cut odds, pressuring yields back toward 6.75–7.00%. CRE borrowers should expect bank and agency pass-through only after warehouse funding resets. Strategic timing of refis in the next 30–60 days is critical.
Reuters — link
Chart 1 - MBA Mortgage Applications Index (Refi vs Purchase)
Chart 2 - Market-Implied Odds of September Rate Cut
