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Fed prepares to pivot balance sheet, with potential ripple effects for mortgages

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A growing number of economists believe that the Federal Reserve is close to announcing the end of its quantitative tightening (QT) program — a move that could have wide-reaching implications for the mortgage industry.

Over the past few weeks, central bank officials have signaled they are prepared to wind down the policy aimed at shrinking the Fed’s balance sheet, prompting expectations of an announcement as soon as Wednesday.

Earlier this month, Fed Chair Jerome Powell said the winding down of QT could happen “in the coming months,” while other officials have shifted their language from describing reserves as “abundant” to “ample.”

The Fed’s balance sheet has expanded dramatically over the past decade, doubling from about $2.2 trillion in 2008 to $4.2 trillion in 2020, just before the COVID-19 pandemic.

It peaked near $9 trillion in 2022 when QT began, but it has since declined to $6.5 trillion — composed of roughly $4.2 trillion in Treasury securities and $2.1 trillion in mortgage-backed securities (MBS).

Questions remain about how the Fed will manage the end of QT. The prevailing view is that the central bank will use mortgage repayments to reinvest primarily — if not entirely — into short-term Treasurys.

“Our house forecast is that they take the MBS paydowns, which are roughly about $16 billion a month, and reinvest those into Treasury bills,” said Jeana Curro, managing director and head of agency MBS research at Bank of America. “That aligns with a lot of the rhetoric from this Fed. They’ve said they ideally want to hold a Treasury-only portfolio.”

BofA analysts expect the Fed to announce the end of QT on Wednesday, paving the way to begin the transition by late October. The shift from MBS to Treasurys should be $10 billion to $20 billion per month.

If that’s the case, Curro said, the market reaction will likely be muted, as the change is “largely priced in.”

In the mortgage sector, secondary market executives expect a positive impact, largely due a decline in 10-year Treasury yields. These tend to move in tandem with 30-year mortgage rates due to their similar long-term nature.

“I do believe this will be a rising tide that lifts all boats,” said Scott Ferrell, executive vice president and director of capital markets at AnnieMac Home Mortgage.

“Mortgages should follow along nicely. It’s sort of Econ 101: There will be less supply out there with an equivalent demand. The overall implications for the mortgage market is there will be some decrease in rates, which, of course, would be favorable for refinance activity.”

Winding down QT for MBS later?

Some market participants floated the idea earlier this year that the Fed might reinvest MBS paydowns into new MBS, citing housing market pressures and the need to lower rates. But most economists don’t see that as a base-case scenario.

“I think there’s a preference to have the balance sheet at zero MBS, from what a couple of the Fed speakers have said in the past and all of their holdings in Treasury at some point in time,” Ferrell said. “I don’t think they’re rushing to get to that point, but I believe that’s the ultimate desire.”

Others question whether the Fed might first end QT for Treasurys while maintaining its MBS runoff for longer.

Nash Paradise, director of sales at UMortgage, said the end of QT will nevertheless be a boost for the mortgage industry, which has faced a wide spread of about 2.2% between 10-year Treasury yields and overnight 30-year mortgage rates.

“We’ve already seen the 10-year yield drop, and that’s what we need — to hold below 4%,” Paradise said. “As we get to the end of QT on MBS, we will start to see that margin between the 10-year yield and the overnight average on the 30-year really tighten up.”

Rick Roque, corporate vice president of new growth at NFM Lending, said it remains uncertain whether the Fed will reinvest halted MBS runoff proceeds back into MBS or shift entirely to Treasurys. The first option, he said, would be more favorable for mortgage rates, but the latter seems more likely.

“Overall, this development is a net positive for the bond market,” Roque said. “It could bring the 10-year yield down to test technical floors in the 3.6% to 3.8% (range). With spreads normalizing toward 1.8%, the 30-year mortgage rate could move closer to 5.5%.”

Curro added that ending QT could also signal a return of domestic banks as MBS buyers, which would help narrow spreads. She remains cautious, saying that banks have been anticipated to reenter the market for a while, but it hasn’t happened.

Read more at Housingwire

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10 Signs Your Home Might Actually Be Haunted

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Maybe it’s a flickering light. A sudden drop in temperature. A random waft of...wait, is that aftershave? Whatever it is, something seems to be off, but how do you know whether that unsettled feeling you’re experiencing is the result of an honest-to-goodness ghost?

If you are feeling spooked, you’re not alone. According to a 2024 survey by Angi (formerly Angie’s List), the home improvement platform, 60 percent of homeowners suspect their house may be haunted. But even if those suspicions are correct, not all hauntings are created equal.

“Many hauntings seem to be residual energy, sort of like a recording playing on a loop,” says Amy Bruni, a professional paranormal investigator, television host (“Ghost Hunters,” “Kindred Spirits”), podcaster (Haunted Road), and author (Life with the Afterlife). Other hauntings seem to be more interactive. “Those usually stem from the classic idea of unfinished business,” but not necessarily anything sinister, she says. “I once investigated a home where the family had an old headstone in their backyard. It turned out it had been made years prior to correct a misspelling on a grave at a local cemetery. The spirit of that man would not rest until the correct headstone was finally put on his grave.”

Another reason a ghost might be lingering: fondness for their old home. “Spirits and ghosts tend to like to spend time in the same spaces they enjoyed while they were alive,” says Lesley Ann Hyde, medium, paranormal investigator, and founder and owner of The Southern Ghost Girls. “In my team’s research, we have found that theaters, libraries, and even restaurants have a lot of ghostly paranormal phenomenon that occurs. We think they just want to be where they were the happiest in life.”

Before you work yourself into a sage-burning tizzy, remember that those weird sounds may just be a squirrel. “I always suggest that people try to first figure out the natural causes for these experiences, like old pipes or animals in the attic,” says author Adam Berry, who is also co-star and Executive Producer of “Kindred Spirits”. “However, when you can’t naturally explain it away, then you never know if someone has decided to reach out to you from the afterlife.”

Here, according to experts in the paranormal field, are a few common indicators that you’re dealing with more than a rodent.

1) You feel like you’re being watched.

This is one of the most commonly cited disturbances of homeowners who suspect their homes are haunted. “People tell me and my team this all of the time,” says Lesley. (Is this song stuck in your head now? You’re welcome.)

2) You hear weird noises.

Strange knocks, creaky doors, unexplained footsteps, unsettling sounds in the walls—it could be as simple as that aforementioned squirrel, but then again...maybe not? “Some people report hearing conversations of people in their basement or attic and clearly no one is down there,” says Adam. “I know one person who actually caught disembodied voices on recording devices,” says Lesley. “The final straw, however, was an apparition of a boy in the house, which convinced the guy to move into a rental home.”

3) You notice odd electrical glitches.

Flickering lights may be a staple of haunted houses, but that hardly scratches the surface. of electronic interruption. “Televisions turning on by themselves, computers freezing up, and batteries draining quickly without explanation can also be signs of a paranormal presence,” says Lesley.

4) Strange things happen when you renovate.

“We find that home renovations really stir up paranormal activity,” says Lesley. “It’s like the ghosts make themselves more known and are acting up. I feel that more activity during renovations occurs because they are protesting the person or persons making the changes. The ghost or spirit liked the way things were when they were alive, and they think they still live there and are the ones in charge.”

Adam has observed the same: “We have seen upticks in activity when people renovate their home. This was fairly prominent during the pandemic, when people were at their house doing all those projects they never got time to do before. I am not 100% sure what a spirit sees on the other side, but I do know that when you change your home, you’re changing the energy of the space, and I think that can have an effect on those otherworldly spirits that might still be living in your house.”

Amy, for the record, says she kinda sides with the ghosts on this one. “I can’t blame them—the number of gorgeous Victorians I’ve seen turned into plain gray or white modern interiors inside would probably drive me back from the grave also!”

5) Items seem to mysteriously move around.

If things are getting moved and showing up in places you didn’t put them, that’s another sign a house may be haunted.

6) There are strange smells.

“Atypical odors such as perfume, cigar smoke, or tobacco may signify the presence of a spirit from the past is near by,” says Lesley.

7) It suddenly feels cold.

Spirits are said to draw energy from the environment, which is what many say accounts for these sudden cold spots.

8) Your pet senses something is off.

“There is no doubt that dogs and cats can sense ghosts on a different plane or dimension than we can,” says Lesley. “Dogs will bark at what seems to be nothing; cats will bristle up and hiss or chatter.”

“I also believe that spirits are more attracted to pets,” says Amy. “Us living people can’t walk by a cute dog or cat without squatting down and saying hello—I think it’s the same for ghosts. We had a case where something showed up on one of our night cameras, and in the room opposite, there was a cat, and that cat stopped what it was doing looked toward where the anomaly showed up on our camera walked into that room curled up and sat down, right where the anomaly appeared. So I believe that cat saw what we caught on camera and wasn’t threatened by it, but actually welcomed the attention.”

9) You live in a Victorian house.

While it’s true that a lot of Victorian-style homes mistakenly fall victim to the “it’s gotta be haunted” stereotype, Amy does note that the idea of a haunted Victorian makes a lot of sense. “Many people during the Victorian era were very into spiritualism, conducting séances and such. I think it’s why we see so many Victorian ghosts—they’re from the era that was most obsessed with the afterlife and spirits. They *expected* to become ghosts.”

10) Your house has a haunted backstory.

If you suspect paranormal activity, research your home’s history. “In addition to public records, seek out records from your real estate agency,” says Lesley. “In a lot of states, homeowners must disclose if they have had any hauntings or unusual activity.”

“I always tell people to start with old deeds and land records,” says Amy. “That gives you a set of names to research associated with the house. Also, don’t be afraid to knock on the neighbors’ doors. If your house has a history of a haunting, many times people in the neighborhood will know about it.” Adam also recommends the aptly named website diedinhouse.com. “I know it sounds silly, but it lists anyone who’s ever actually died in your property.”

Read more at Country Living

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Most potential homebuyers expect mortgage rates to drop. That’s why they’re waiting

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The majority of would-be homebuyers expect mortgage rates to continue their recent decline, and it’s one of the main reasons why they’re waiting to make a purchase, according to the findings of a new CNBC Housing Market Survey.

Rates have been creeping down over the last few months and are hovering around the lowest level in a year, with the average rate on the popular 30-year fixed loan now sitting at 6.17%, according to Mortgage News Daily. But nearly three-quarters of real estate agents surveyed by CNBC said most of their buyers think rates will come down further.

“My biggest challenge is when buyers hear predictions of future rate decreases, which in turn have buyers sit on the sidelines and wait to see how low they will go instead of getting out there and buying now,” said Maureen States, a real estate agent in Pittsburgh.

The CNBC Housing Market Survey is a national inquiry of real estate agents selected randomly across the United States. Responses were collected between Sept. 22 and Sept. 30. This quarter, 54 agents shared what they’re seeing in their market.

Most agents said they consider the current conditions to favor buyers over sellers, but they still listed affordability as the No. 1 reason why buyers are delaying their purchases.

Despite optimism that mortgage rates will continue to fall, agents said rates are still buyers’ top concern. That was followed by uncertainty in the economy and then just overall affordability.

That sentiment appears at least somewhat divorced from reality, however: 44% of agents reported prices are decreasing in their areas, and just 20% said they are rising.

“Sellers are still pricing for a seller’s market, and buyers are willing to wait for prices and rates to drop. It is a bit of a standoff, and folks are only moving if they absolutely must,” said Katie Kosnar, an agent in North Carolina serving Raleigh and Durham. “Right-sizing used to be a driving factor, but most sellers I’ve encountered will be paying a higher mortgage for a smaller house and just aren’t willing to make that move.”

As a result, buyers are using interest rate buydowns or turning to adjustable-rate mortgages, which offer lower interest rates, in order to offset price pressures.

Roughly 40% of survey respondents said their buyers are borrowing money from family or friends in order to afford a home. Buyers are also compromising on home size, location or features in order to bring the price down, agents said.

The vast majority of agents in CNBC’s survey said they expect home sales to either improve slightly or stay about the same in the next quarter, and about 17% expected sales to drop. Of course this varies by location, with some of the markets that heated up the most during the pandemic seeing the steepest declines, and other more affordable markets seeing bigger gains.

As for sellers, agents reported the biggest concern among that group is how long it will take to find a buyer. Some are concerned they’re pricing their home too low, and sellers, too, are watching mortgage rates closely, agents said.

About 89% of agents who took CNBC’s survey reported having at least one seller reduce their asking price, and nearly a third said more than half their sellers dropped prices.

Roughly 40% of agents said they had at least one seller delist their home, hoping to get a better price later.

Home prices continued to rise on an annual basis through August, according to several other national indexes, but the price gains are shrinking. Prices are gaining most in the Northeast and Midwest and weakening most in the South and West.

The supply of homes for sale in September was higher than it was a year ago, as were new listings after a particularly slow August, according to Zillow.

New listings usually drop from August to September, and while that was true this year — with new listings down 2% month to month — it was a smaller decline than the average 9% monthly tumble seen over the past seven years, also according to Zillow.

Inventory has made solid gains over the past year, but it is still historically tight, especially for more affordable properties.

“For buyers, low inventory and mortgage rates, from an affordability standpoint, are still a challenge,” said Holly David, an agent in Richmond, Virginia. “For sellers who are locked in to a 3% [mortgage] rate, even though they may have a housing want or need, they may not be willing or able to make a move.”

Read more at CNBC

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The 20-minute trick that will help a carved pumpkin last for weeks

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Carving a pumpkin is one of the joys of autumn, but they typically only last between three and five days before beginning to rot.

To stop your pumpkin from looking sunken, sad and smelly, experts have recommended a clever 20-minute vinegar trick that could help your carved creations last for weeks in the run-up to Halloween and beyond.

Better still, this simple solution is an eco-friendly alternative to the trend of spraying pumpkins with bleach.

It's also safe for wildlife too, so you don't have to worry if you leave your pumpkin outside.

"The vinegar kills fungus, making it hard for the pumpkin to rot. That's why vinegar-soaked pumpkins look so new; they're unblemished by the grossness that inevitably befalls their untreated peers," says the team at Taste of Home.

How to preserve a carved pumpkin with vinegar

Want to give this trick a go? According to Taste of Home, you can make your fresh pumpkin last longer by using vinegar and water. To do this, follow the steps below:

1. Choose a healthy pumpkin from your local pumpkin patch. "Make sure there are no soft spots or discolored areas, and avoid any gourd that's too bruised," says the team.

2. Next, carve your pumpkin with your desired design. Browse our guide on pumpkin carving ideas for plenty of inspiration.

3. Fill a large bucket with 10 parts water and one part vinegar (the bucket needs to be big enough for your pumpkins). Some experts also suggest doing this in the bath or a large sink.

4. Submerge your pumpkin in the vinegar and water solution, leaving them for 20-30 minutes. Once the time is up, pull them out and let them air-dry. You can then place your carved pumpkins outside for a long-lasting display.

Read more at CountryLiving.com

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Planning To Sell in 2026? Start the Prep Now

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You’ve got big plans for 2026. But what you do this year could be the difference between a smooth sale and a stressful one. If you’re thinking of selling next spring (the busiest season in real estate), the smartest move you can make is to start prepping now. As Realtor.com says:

“If you’re aiming to sell in 2026, now is the time to start preparing, especially if you want to maximize the spring market’s higher buyer activity.”

Because the reality is, from small repairs to touch-ups and decluttering, the earlier you start, the easier it’ll be when you’re ready to list. And, the better your house will look when it’s time for it to hit the market.

Why Starting Now Matters

Talk to any good agent and they’ll tell you that you can’t afford to skip repairs in today’s market. There are more homes for sale right now than there have been in years. And since buyers have more to choose from, your house is going to need to look its best to stand out and get the attention it deserves.

Now, that doesn’t mean you have to do a full-on renovation. But it does mean you’ll want to tackle some projects before you sell. Your house will sell if it’s prepped right. And you don’t want to be left scrambling in the spring to get the work done.

Because here’s the advantage you have now. If you start this year, you’ll be able to space those upgrades and fixes out however you want to. More time. Less stress. No sense of being rushed or racing the clock.

Whether it’s fixing that leaky faucet, repainting your front door, or finally replacing your roof, you can do it right if you start now. And you have the time to find great contractors without blowing your budget or paying extra for rushed jobs.

Get an Agent’s Advice Early

To figure out what’s worth doing and what’s not in your market, you need to talk to a local agent early. That way you’re not wasting your time or money on something that won’t help your bottom line. As Realtor.com explains:

“Respondents overwhelmingly agree that both buyers and sellers enjoy a smoother, more successful experience when they start early. In fact, a recent survey reveals that, for sellers, bringing a real estate agent into the process sooner can pay off significantly.”

A skilled agent can tell you:

  • What buyers in your local area are looking for

  • The repairs or updates you need to do before you list

  • How to prioritize the projects, if you can’t do them all

  • Skilled local contractors who can help you get the work done

And having that information up front is a game changer.

To give you a rough idea of what may come up in that conversation, here are the most common updates agents are recommending today, according to research from the National Association of Realtors (NAR):

Just remember, what’s worth updating really depends on the homes you’re competing with in your market. Some areas don’t have a ton of inventory, so little updates may be all you need to tackle. In other areas, there are far more homes for sale, so you may need to do a bit more to make your house stand out.

Your agent will walk you through what you need to do for your specific house and market. And that’s expertise that’ll really pay off.

Bottom Line

If 2026 is your year to sell, the work starts now. Taking some time to prep means you’ll hit the market confident, ready, and ahead of other sellers who waited until January to get started.

Want to know which projects are getting the biggest return on their investment in your market? Connect with a local agent so you can head into next spring with a solid game plan.

Read more at Keeping Current Matters

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