Orion, ourbrokers, and your clients continue to face the prospect of higher mortgage rates. Sure, there will be days, and weeks, where rates may drop, but few dispute that the trend is higher. But Orion’s management believes that it isworth while to take a look at last week’s markets to see if there might be some good news for borrowers.

For example, stocks surged, and U.S. Treasury yields fell Friday after Federal Reserve Bankof San Francisco President Mary Daly said future interest rate increases could come in smaller increments to achieve the Fed’s target neutral rate. Our brokers know that the Fed doesn’t determine mortgage rates, but the same factors that influence it also influence long term rates, like mortgages.

While the Fed seems set to again lift its benchmark rate by 75 basis points at theNovember policy meeting, there may be some debate among Fed officials over whether to slow down aggressive rate hikes there after. In terms of the general economy, more than 70% of S&P 500 companies so far have reported a"positive" surprise in terms of earnings per share. This is good news for anyone fearing a recession is impending.

And last week’s economic data showed industrial production increased higher than expected in September and capacity utilization was a little above the long-term average. This will continue to add inflationary pressure to the economy along with continued low unemployment claims.

Housing, near and dear to our brokers and your clients, continues to be the most affected by the Fed’s aggressive monetary stance and the National Association of Home builders’ Housing Market Index fell to its lowest level since 2012 inOctober as expectations for sales and buyer traffic fell. Looking back over the past year, building permits for multifamily housing are up 25.5 percent while permits for single-family homes are 17.3 percent lower. There is some hope that as those new multifamily units come online, upwards price pressure on rents will begin to subside.

Existing home sales fell month-over-month for the eighth consecutive month to an annual pace of 4.71 million units as mortgage rates hover near the 7 percent range. However, due to limited supply, nearly one-quarter of homes are still selling above list price and the average sale price continued its streak of 127 consecutive months of year-over-year increases.

To sum things up, we will continue to receive mixed economic news. And regardless of what mortgage rates do, Orion continues to offer some great products and very competitive rates. Ask your AE what’s new!

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