June 23, 2026 – The New Look Fed

Economic Commentary

Last week we had the first meeting of the Federal Reserve Board’s Open Market Committee under a new Chairman – Kevin Warsh.  Though Kevin Warsh replaces Jerome Powell as the Chairman, Powell still remains a Board of Governor as his term does not expire until early in 2028.  Expecting big changes in the direction of interest rates due to the leadership of a new Chairman?  The first meeting resulted in no change in the Fed’s benchmark interest rate, which was expected.

The statement released by the Fed was simpler and featured the removal of language regarding future projections. But included in this simplified format was the removal of the bias towards lowering rates. Though the decision not to change rates was unanimous, the market read the atmosphere as leaning towards future rate increases based upon recent inflation trends. We will find out more about the tone of the meeting when the minutes are released in a few weeks.  But generally, those who are expecting immediate relief from high interest rates are likely to be disappointed.  There are generally two reasons for this likelihood. 

First, Chairman Warsh has indicated a preference for shrinking the Fed’s $6.7 trillion dollar balance sheet. This activity is known as quantitative tightening and can put upward pressure upon interest rates. Secondly, it is not likely that the Fed will be disposed to lower interest rates anytime soon due to the fact that inflation is currently elevated. The recent strong jobs report gives the Fed room to stay neutral at this juncture because the economy is showing no signs of slipping into a recession.  Of course, geopolitical events in places such as Iran could always alter this scenario.

Weekly Interest Rate Overview

The Markets. Mortgage rates fell slightly in a very volatile week influenced by the Iran “agreement” and the Fed meeting.  According to the Freddie Mac weekly survey, 30-year fixed rates eased to 6.47% last week from 6.52% the previous week. In addition, 15-year loans also decreased to 5.81%. A year ago, 30-year fixed rates averaged 6.81%, 0.34% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage decreased this week averaging 6.47%. Incoming data continues to reflect a resilient consumer, with retail sales improving and pending home sales strengthening, suggesting purchase demand is continuing to modestly improve.”  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

For parents, helping a child buy their first home used to be a question: Should you step in, or should they do it on their own? But after years of first-time buyers being priced out, a new consensus seems to be forming: If you can help, you probably should. Nearly three-quarters of parents with children at home (74%) say they would consider or have already started financially planning to help their kids buy a home one day, according to a recent Northwestern Mutual survey. For cash-rich parents, that help may come through “giving while living”—passing liquid assets to children now, rather than waiting for an inheritance later. The practice is already having a measurable effect on the housing market. In 2025, 22% of first-time buyers said they used a gift or loan from a friend or relative for their down payment, according to the National Association of Realtors®. But not every parent has a large pile of cash to hand over. What many do have, however, is home equity. And that raises a more complicated question: Should parents use the value they’ve built up in their own home to help their child buy one of their own? As Jacob Dayan, managing partner at Dayan Capital LLC, puts it, the decision has two parts: “First, how do you obtain the money, and second, how do you transfer the money?”  Dayan says parents typically have three main ways to pull money from their home: a home equity loan, a home equity line of credit, or a cash-out refinance. Part of parents’ decision on how to protect their home equity is how to transfer funds once they tap them. Dayan says families generally have two options: a documented gift or a documented intrafamily loan. A gift is often the simpler route, especially if the goal is to help a child with a down payment or closing costs without adding another monthly obligation. But larger gifts can come with tax-reporting considerations, so parents should speak with a tax adviser before moving money. An intrafamily loan can make sense if parents want the child to repay them over time. But it should be treated like a real loan, with written terms, a repayment schedule, and an interest rate that satisfies IRS rules.  Source: Realtor.com

The median age of first-time homebuyers hit a record high of 40 last year, according to data from the National Association of Realtors. To make housing more affordable, some people are embracing a nontraditional path to owning a home: co-buying with a friend. “This is a new and interesting way to get into real estate,” says Brett Humphrey, CEO of Joynt, a platform that helps people buy and manage property together. “I firmly believe this is a viable way to get into the housing market.” Six in 10 renters say they are open to the idea of purchasing a home with a friend, according to a survey of nearly 2,000 renters conducted by Rocket Mortgage. Of those, 64% say affordability is what drives them to consider this route. About two-thirds of those who would buy a home with a friend are from the Gen X and millennial generations, perhaps signaling that middle-aged Americans are tired of waiting for the time when they can afford a house on their own.  Here’s what you should know if you want to buy a house with a friend:

• You should fully disclose all your finances first.
• It’s smart to rent together before buying together.
• There should be a written agreement for shared expenses, taxes and house rules.
• Having an exit strategy in place before making the purchase is essential.
• Both applicants’ financial information will be reviewed.
• You can buy a house as an LLC, although mortgage options may be limited. Source: US News and World Report
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Existing-home sales increased by 0.2% month-over-month in April, according to the National Association of REALTORS® Existing-Home Sales report. The report provides the real estate ecosystem—including agents, homebuyers and sellers—with data on the level of home sales, price, and inventory. “Despite mixed macroeconomic signals—including a record-high stock market and historically low consumer confidence—home sales were modestly boosted by the continued improvement in housing affordability,” said NAR Chief Economist Dr. Lawrence Yun. “Mortgage rates are lower from a year ago, and average income growth is outpacing home price gains.” “Inventory still remains tight,” Yun added. “Multiple offers, though not as intense as a few years ago, are still occurring. At the same time, days on market are lengthening on average, implying that consumers are taking their time before making decisions.”  Source: NAR