FOMC pauses target federal funds rate increases

After meeting this month, the Federal Reserve Board of Governors' Federal Open Market Committee agreed to hold the current target federal funds rate steady at 5-5.25%. The interest rate pause is the first after ten consecutive increases. During the resulting press conference, Federal Reserve Chair Jerome Powell clarified that the decision did not imply that a pause would continue in July. May's inflation data showing that the Consumer Price Index (CPI) rose only 4% year over year helped influence the decision.

"Considering how far and how fast we've moved, we judged it prudent to hold the target range steady to allow the committee to assess additional information and its implications for monetary policy," said Powell. "In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."

Powell noted that inflation and the resulting rate hikes strongly impacted the housing market. CPI data shows that housing costs comprise a significant portion of core inflation, which rose 0.5% in May and is up 8.2% over the past year. When asked specifically about whether there has been sufficient cooling in the housing market to bring inflation down, Powell responded, “I do think we will see rents and house prices filtering into housing services inflation. And I don’t see them coming up quickly. I do see them kind of wandering around at a relatively low level now. And that’s appropriate.”

Guild Mortgage offers new down payment assistance program

Guild Mortgage introduced a new 1% Down Payment Advantage program allowing homebuyers to purchase a home with a minimal payment. The move could address barriers to homeownership. Under the program, homebuyers provide 1% of a home's down payment. Guild Mortgage will cover 2%, bringing the total down payment to 3%. Guild will also cover 1% of the mortgage's interest rate for the first year with a lender-paid temporary buydown to keep monthly payments lower for buyers.

Guild designed the program to address three things that prevent some people from becoming homeowners: the upfront cost to purchase, the monthly cost to stay in the home, and the ability to afford unexpected financial shocks in the first five years of homeownership.

"No matter what is happening in the housing market, we want to get people into homes and help keep them there," said Mary Ann McGarry, Guild Mortgage CEO. "With our new 1% Down Payment Advantage program, we are meeting our clients where they are and addressing head on the accessibility challenges so many Americans are facing in today's housing market."

Rep. Gomez announces renters caucus

Rep. Jimmy Gomez (D-Calif.) announced the formation of a new Congressional Renters Caucus. The caucus intends to serve as a vital platform for legislators to collaborate and propose legislation on issues impacting renters, an important step now that the average American is considered rent burdened. Reps. Ritchie Torres (D-N.Y.) and Ayanna Pressley (D-Mass.) serve as Vice Chairs. The caucus' founding members are Reps. Dan Goldman (D-N.Y.), Rob Menendez (D-N.J.), Maxwell Frost (D-Fla.), Dwight Evans (D-Pa.), Eleanor Holmes Norton (D-D.C. At Large), Sydney Kamlager-Dove (D-Calif.), Lloyd Doggett (D-Texas), Grace Meng (D-N.Y.), Ted Lieu (D-Calif.), and Pramila Jayapal (D-Wash.).

"As the burden of rent has increased significantly, far outpacing the increase in real wages, it's become clear that we need a strong, coordinated effort in Congress to advocate for the millions of renters in our country," said Rep. Gomez. "The unreasonable cost of rent not only affects individual families, in fact economists warn it will have significant impact on the country's GDP, meaning this is an issue that affects everyone."

FHA provides new translated mortgage resources 

The Federal Housing Administration (FHA) launched new translated mortgage resources for lenders and servicers to provide to borrowers with limited English proficiency. Additional translations of more than 30 single-family mortgage documents and related resources are now available in Chinese, Korean, Spanish, Tagalog, and Vietnamese. You can find these resources on FHA's new Translated Mortgage Documents web page.

"Understanding the products, processes, and documents associated with a mortgage transaction is vital to a borrower's ability to become a successful homeowner. These new resources will help prospective homebuyers better understand their transaction and make more informed decisions before they are at the closing table," said FHA Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon.

Terner Labs, HUD partner on technology series  

HUD and the Terner Housing Innovation Labs at UC Berkeley (Terner Labs) are partnering to host an event series on the impact of technology on housing supply, access, equity, and affordability. Housing experts and industry leaders will explore technological advances and challenges communities face to identify solutions and move communities forward. The events will occur in locations across the country over the coming year, ending with HUD’s 2024 Innovative Housing Showcase.

"In light of recent advances in the technology landscape and increasingly dire housing affordability challenges, the timing could not be better for this event series. We need to harness emerging innovations and incorporate new technology if we hope to ensure that housing is available and accessible for as many Americans as possible," said Ben Metcalf, Terner Labs CEO.