Calls for Big Rate Cut in September!

I spent the weekend at Norris Lake, Tennessee—a perfect way to wrap up the summer, which always seems to fly by too quickly. Hard to believe school is starting this week! While I’m a little sad to see summer go, I’m equally excited for football season kicking off in just a couple of weeks. Add in the potential for Fed rate cuts, and September is shaping up to be an exciting month! Let’s dive into the latest and greatest in the economy and mortgage market!

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Read time: ~5 minutes

Rates ended FLAT compared to last week, and volatility was MODERATE. Rates remain in the mid 6% to high 6% range for most loan types without paying discount points. Paying discount points can get you in the low/mid 6's.

Calls for Big Rate Cut in September!

Not long ago, Nick and I were sweating bullets as mortgage rates were hovering around 7% with no relief in sight. Fast forward just a few weeks, and we’re now seeing some of the lowest rates in nearly a year! So, what changed? A growing belief that the Federal Reserve could soon step in with rate cuts just as the leaves start to change and football begins.

As we’ve said many times, markets move on anticipation. That old phrase, “buy the rumor, sell the news,” is currently in full effect. The hint of a potential Fed move has already started pushing rates lower.

Recently, U.S. Treasury Secretary Scott Bessent suggested the Fed should cut interest rates by half a percent at its September meeting. His argument is simple: today’s rates are too high for the economy, and lowering borrowing costs would help keep growth on track.

Here’s what that could mean for mortgages:

• Potential for Lower Rates: As we have said a number of times, while the Fed doesn’t directly set mortgage rates, its moves often influence them. A rate cut could put downward pressure on mortgage rates, offering more relief in the months ahead.

• Greater Affordability: Even a modest drop in rates can ease monthly payments—not just on mortgages, but also on credit cards, auto loans, and HELOCs. This can help more buyers qualify and make homeownership more attainable.

• Stronger Market Activity: News of falling rates tends to spark buyer interest quickly. We’re already seeing a surge of calls from clients eager to jump into the market as of late. More activity in the market will lead to increased sales and stronger competition for homes.

Obviously, nothing is official until the Fed makes its move, but markets are already responding as if lower rates are coming. And we are here for it!

Buy Now, Pay Later Wreaking Havoc!

When news broke that the "Buy Now, Pay Later" loans were going to start reporting to the credit bureaus, Nick and I honestly didn't think they would have much of an impact on our mortgage deals. Boy, were we wrong!

The reality hit when we started seeing these loans show up on credit reports. As of 2024, about 15% of Americans use BNPL services—and we experienced our first deal potentially "blow up" because of these loans.

Last week, a borrower was set to close on Friday when we were alerted a new $2,000 debt had popped up on his credit report right before closing. He swore he hadn’t opened any new accounts—his only recent purchase was a fridge, which he claimed he bought outright, but got set up on a repayment plan. Unfortunately, we had to break the news that his "Buy Now, Pay Later" purchase just became a "Buy Now, Pay Now" purchase 🙁 He had to pay the debt in full in order for ratios to be back in line and close on the house.

The moral of the story is these Buy Now, Pay Later plans have become a common way for clients to manage purchases, but many don’t realize the impact it can have on their credit and mortgage eligibility. If our borrower hadn’t had the funds to pay off that $2,000 fridge, the deal wouldn’t have closed. It’s a reminder that even “simple” payment plans can have serious consequences in the homebuying process.

Trump Eyes Intel Investment—Big Impact for Ohio!

We all know the Intel project in Ohio has been nothing short of a disappointment. A promise of a multi-billion-dollar project that has come to a near screeching halt. The project looks more like a construction disaster site than a potential cutting-edge tech hub. But this past week, the project got a potential lifeline: the Trump administration is considering using CHIPS Act funds to take a stake in Intel!

Many believe it's Trumps way of forcing giants like Nvidia, AMD, Qualcomm, Apple and Broadcom to shift their chip orders from Taiwanese owned TSM to Intel. If Trump gets his way, the Ohio plant could finally get back on track—creating jobs, speeding construction, and strengthening the U.S. semiconductor industry. Investors are already pumped, with Intel’s stock jumping over 20% on Thursday. While long-term success still depends on competing globally and satisfying major clients, Ohio residents could see immediate benefits: more construction, more jobs, and a huge boost to the local economy!

Instagram Reels from the Week

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Don’t hesitate to reach out if you need anything at all. Have a wonderful week!