Fed Rate Cut was a Nothing Burger… HOWEVER, These Two Guys Could Actually Drop Rates

🏠 Fed Rate Cut was a Nothing Burger… HOWEVER, These Two Guys Could Actually Drop Rates

Everyone’s talking about the Fed’s latest ¼-point “risk-mitigation” rate cut, but here’s the truth:
that move was already priced in — meaning it did virtually nothing to lower mortgage rates.

The real story is what’s happening behind the Fed, where two major housing leaders — Barry Habib and Bill Pulte — are quietly working on changes that could actually bring rates down and make homeownership more affordable for Denver buyers.

⚙️ The Real Driver: The LLPA Review

At the heart of the potential shift is a review of Loan-Level Price Adjustments (LLPAs) — the risk-based fees baked into every conventional loan. They can add anywhere from ½% to 1¼% to the average buyer’s mortgage rate.

That means if you’re being quoted 6.625%, your true qualifying rate might be closer to 5.5% if those extra pricing layers were adjusted.

Barry Habib, founder and CEO of MBS Highway, is one of the mortgage industry’s most trusted voices — known for his accurate market forecasts and deep understanding of rate mechanics. A recent SEC filing confirmed his appointment to Fannie Mae’s Board of Directors effective July 21, where he’s helping re-evaluate how LLPAs are structured, especially for mid-range credit buyers and first-time homeowners.

If his proposed changes move forward, they could reduce rates ¼%–½% overnight — saving buyers $150–$300 per month on a typical Denver home loan, without another Fed cut.

🏛️ The Bigger Play: FHFA’s Push Under Bill Pulte

Meanwhile, Bill Pulte, Director of the Federal Housing Finance Agency (FHFA) — the agency that oversees Fannie Mae and Freddie Mac — is exploring a broader strategy.
He’s considering allowing the GSEs to buy up to $300 billion in mortgage-backed securities, effectively stepping in where the Fed left off.

That move could shrink the spread between the 10-year Treasury and mortgage rates — currently about 220 basis points.
If that spread returned to its historical 170 bps, rates could fall another 0.3% instantly.

Pulte, grandson of homebuilding pioneer William Pulte and founder of Pulte Capital Partners, has also floated the idea of declaring a National Housing Emergency to fast-track housing policy reforms and restore affordability nationwide.

💬 Why This Matters for Denver

Denver’s housing challenge has never been about interest — it’s been about interest rates.
Even modest relief from these administrative changes could reignite affordability, open doors for first-time buyers, and add healthy momentum back into our local market.

So while the headlines fixate on the Fed’s quarter-point cut, remember:
the real rate-moving action is coming from the FHFA — not the FOMC.

Because in real estate, you don’t build wealth by waiting on forecasts — you build it by understanding what truly moves the market.