HUD slashes staff amid government shutdown

Plus: Mortgage application volume dropped 4.7% last week

October 15, 2025

😄 Welcome back, it's Wednesday already. Today’s newsletter is a 3-minute read.

Disclaimer: Average mortgage rates as of October 14, 2025. © MND Daily Rate Index.

1. HUD slashes staff amid government shutdown

The HUD is preparing to lay off around 442 employees on December 9, following weeks of furloughs and disruptions caused by the ongoing government shutdown, according to Bisnow.

The layoffs span several divisions, with the Office of Fair Housing and Equal Opportunity hit hardest. Entire Fair Housing teams will be eliminated in Denver and San Francisco, leaving large portions of the west without local staff to investigate housing discrimination complaints.

HUD said the layoffs are meant to “align our programs with the administration’s priorities and the appropriations available.” However, internal concerns are mounting.

A whistleblower complaint filed in August claims the agency has significantly weakened civil rights enforcement. One key policy shift deprioritizes “disparate impact” cases, where housing practices harm protected groups even if not overtly discriminatory.

2. Mortgage application volume dropped 4.7% last week

Mortgage demand overall weakened again last week, even as interest rates fell slightly. For those still in the market, though, they are looking increasingly to adjustable-rate loans to get the lowest interest rate possible.

Total mortgage application volume dropped 4.7% last week compared with the previous week, according to the MBA’s seasonally adjusted index.

  • The average interest rate for a 30-year fixed-rate mortgage decreased to 6.43% from 6.46%.

  • Applications for a mortgage to purchase a home fell 1% for the week and were 14% higher year over year.

  • Applications to refinance a home loan fell further last week, down 8%. Refinance demand is still 18% higher than it was the same week one year ago.

  • The ARM share increased to 9.5% last week from 8.4% the prior week

“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” said Mike Fratantoni, senior vice president and chief economist at the MBA.

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3. More Nuggets

💸 Experian makes VantageScore 4.0 free for mortgage lenders. (HousingWire)

🏚️ Foreclosure rates by state – september 2025. (ATTOM)

📰 LendingTree founder, CEO Doug Lebda dies in ATV accident. (inman)

📝 loanDepot claims WCL used illegal playbook to become a top brokerage. (smry)

⚖️ Suspected $100M real estate fraud scheme uncovered in Baltimore. (HM)

🏦 The scammiest states in America. (theHustle)

4.  Zillow says it would take an 'unrealistic' mortgage rate decline to restore housing affordability

Zillow: "Holding incomes, home prices and all other housing-related costs equal, mortgage rates would need to drop to 4.43% in order for a typical U.S. home to be affordable to a buyer making the median income, assuming they put 20% down.

Are we likely to see an average 30-year fixed mortgage rate of 4.43% anytime soon? Zillow economists say that scenario is “unrealistic”—at least in the short term.

“If buyers are waiting for big drops in mortgage rates or [U.S. home] prices to help affordability, they’re in for a rude awakening. Just like falling rates, that kind of correction in house prices won’t happen without a serious slowdown in economic growth and income growth, and a rise in the unemployment rate.” - writes Zillow economists

5. Senate passes ROAD to Housing Act

The U.S. Senate has approved the Renewing Opportunity in the American Dream (ROAD) to Housing Act of 2025 (S.2651), a sweeping bipartisan package tucked inside this year’s National Defense Authorization Act.

  • The legislation includes more than 40 provisions intended to expand housing supply, simplify federal housing programs, and improve access to affordable mortgage credit. Key measures address small-dollar loan availability, appraisal modernization, interagency coordination among HUD, USDA, and the VA, and streamlined reviews for new housing construction.

The bill was introduced by Sen. Tim Scott of South Carolina and Sen. Elizabeth Warren of Massachusetts. Industry groups, such as MBA, have expressed support for the bill’s passage. “The Senate’s passage of the ROAD to Housing Act is a win for housing affordability and consumers,” said MBA President and CEO Bob Broeksmit.

☀️ You’re all caught up. See you on Friday!

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