New home construction falls to five-year low

Plus: Fed leaves rates unchanged, as expected

June 20, 2025

👋 Welcome back. Today's newsletter is 723 words, a 2.5-minute read. Let’s dive in…

Disclaimer: Average mortgage rates as of June 19, 2025. © MND Daily Rate Index.

1. Fed leaves rates unchanged, as expected

The Federal Reserve kept its key interest rate unchanged Wednesday as it waits for additional information on how tariffs and other potential disruptions will affect the economy this year.

  • The Fed’s policymakers signaled they still expect to cut rates twice this year, even as they also project that President Trump’s import duties will push inflation higher.

  • They also expect growth to slow and unemployment to edge up, according to their latest quarterly projections released Wednesday.

“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” Fed Chair Powell said. “This is something we know is coming, we just don’t know the size of it.”

2. FHFA’s Bill Pulte calls on Fed Chair Powell to resign

On Wednesday, the head of the federal agency overseeing Fannie Mae and Freddie Mac called for Federal Reserve Chair Jerome Powell to resign, echoing President Trump’s demand for a sharp 2.5% interest rate cut.

The Fed held rates steady this week, citing tariff uncertainty despite easing inflation and rising unemployment. Critics, including Pulte, argue the Fed’s tight stance is stifling housing and job growth, with construction and builder sentiment back near pandemic lows.

“Because President Trump has crushed inflation, Fed Chairman Jerome Powell needs to lower interest rates today, and if not Chairman Powell needs to resign, immediately. Fannie Mae and Freddie Mac can help so many more Americans if Chair Powell will just do his job and lower rates,” Pulte wrote on social platform X.

🚨 Coach’s Corner

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3. More Nuggets

🏘️ New home construction falls to five-year low. (NAHB)

🔬 Are settlement rules pushing down agent commissions? New survey says the opposite. (HousingWire)

🚀 VA loans are up 45% annually, and Gen Zers are leading the charge. (Fox59)

⏰ Clocked In, Checked Out. Why some LOs are taking a stand against 24/7 service. (NMP)

4. Guild Mortgage to go private in $1.3B deal

Investment firm Bayview Asset Management will buy all shares of Guild Holdings that it does not already own for $1.3 billion in cash, taking the mortgage lender private nearly five years after it was listed.

Under the deal announced on Wednesday, Guild shareholders will receive $20 for each share held. That represents a 56% premium to the stock's closing price on May 23, the last trading day before Bayview disclosed its interest in acquiring the company.

The transaction has already received shareholder approval from McCarthy Capital Mortgage Investors, LLC, which holds the majority of Guild shares, so no further stockholder action is required. However, the deal must go through customary regulatory approvals, including from antitrust and financial regulators..

5. Mortgage applications drop despite lower rates

Applications for a mortgage to purchase a home fell 3% last week compared with the previous week, according to the MBA’s seasonally adjusted index. Volume was still 14% higher than the same week one year ago.

  • This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.84% from 6.93%.

Applications to refinance a home loan declined 2% for the week, despite the drop in rates. They were, however, 25% higher than the same week one year ago.

“Mortgage rates decreased last week, driven by financial market volatility caused by current geopolitical conflict and ongoing tariff uncertainties,” said Joel Kan, deputy chief economist at the MBA. “Even with lower average mortgage rates, applications declined over the week as ongoing economic uncertainty weighed on potential homebuyers’ purchase decisions.”

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

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