The Mortgage Game Just Changed for 33 Million Americans

Politics, War, and the Fed. Oh My!

This week is not for the faint of heart. We had another assassination attempt at the White House, a war still raging, and Jerome Powell chairing his last Fed meeting. We are here to break it all down for you. Let's goooo!

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Read time: ~5 minutes

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

Warsh Hearing Officially Ended Rate Cuts for 2026

I’ll be honest...zero rate cuts in 2026 doesn’t shock me.

Coming into the year, most people (counting 👋) expected the Fed to cut rates once or twice in 2026. But after Kevin Warsh’s Senate Banking Committee hearing last week, that outlook is dead in the water. The market is now pricing in no cuts in 2026… and not even favoring a cut until September 2027 (see chart below)!

What really stood out to me was how Warsh addressed the elephant in the room. There’s been a lot of talk that he’d come in and start slashing rates, especially with political pressure from Trump. He shut that down quickly, saying the president never asked him to commit to rate cuts. Basically, he's letting us know now, he’s not coming in to “save” the market with lower rates.

If you were banking on a new Fed chair to step in and drive rates down quickly, it’s probably time to reset expectations. Warsh made it pretty clear he’s not going to roll over and start cutting just for the sake of it.

It's time for us all to get comfortable with this rate environment. The Fed isn’t riding in on a white horse anytime soon.

The Mortgage Game Just Changed for 33 Million Americans

This is arguably the most impactful structural change to mortgage underwriting in decades, and it happened last week.

On Wednesday, Fannie Mae, Freddie Mac, and FHA all announced they are now accepting VantageScore 4.0, effective immediately. This is the first new credit scoring model allowed in the mortgage market in decades, and everyone is calling it an absolute game-changer. They're not wrong, but let's be real about what it actually means.

The upside is indeed legit. VantageScore 4.0 scores 33 million more people than traditional FICO models by factoring in rent payments, utilities, and trended credit data. The renter who's been paying on time for five years but has a thin credit file now has a legit chance at qualifying. And since over 80% of FHA-insured mortgages went to first-time homebuyers in 2024, this change is squarely aimed at the buyers we fight hardest for.

But here's the part nobody's talking about yet...expect these loans to be priced higher. The secondary market has 30+ years of history pricing risk through the FICO model. That's the data investors know, trust, and trade on. VantageScore is completely new to this arena, and when Wall Street doesn't have a long track record to lean on, they charge for that uncertainty. Higher risk = higher rate, plain and simple.

And don't expect this to roll out overnight. The mortgage industry is notoriously slow to implement change. Automated underwriting systems have to be updated. Loan officers have to learn how to price these loans. Investors have to get comfortable enough to actually buy them. "Effective immediately" in a government press release and "effective immediately" in your local lender's office are two very different things. Nick and I expect a 12+ months before this is implemented with all lenders.

So yes, more buyers will qualify. That's genuinely good news. Just make sure your clients understand that qualifying under VantageScore and getting the best rate aren't necessarily the same conversation, and that it may be a while before every lender at your closing table is ready to go.

The rules changed. Knowing how to use them is the next step for us all.

The End of an Era at the Fed

This week marks Jerome Powell's final Fed meeting, scheduled for April 28th and 29th. It’s the closing chapter of an eight-year run as one of the most influential economic leaders in the country, and arguably the most impactful Fed chair for the housing market in our lifetime.

Think about what happened on his watch....A global pandemic. Emergency rate cuts to near zero. A massive housing boom that pushed affordability out of reach for millions. Then came the most aggressive rate hiking cycle in over 40 years, with mortgage rates climbing from around 2.5% to over 7%. He also faced intense pressure from Trump to remove him, along with public demands to cut rates. Through it all, Powell held his ground.

Powell's term ends in May, and assuming Kevin Warsh gets confirmed, we'll be talking about Warsh's first Fed meeting in June.

As for this week, don't expect any fireworks. Absolutely zero chance of a rate cut and everybody knows it. Powell's last chapter will end quietly.

But here is the thing I really want you to take away from all of this. Whether it is Powell or Warsh sitting in that chair, the Fed does not dictate mortgage rates. Never has. The real driver is the 10-year Treasury. The bond market calls the shots. Leadership changes at the Fed can shift expectations and shape the conversation, but mortgage rates are ultimately set by bond market investors, not the Fed chair.

The next chapter is just getting started. And volatility is likely along for the ride.

Instagram Reels of the Week

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