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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. Last week, the average 30-year fixed mortgage rate tracked by Freddie Mac hit a calendar-year low of 6.35%. Its likely this weeks reading could come in even lower given that the daily rate reported by Mortgage News Daily was 6.13% on Tuesday. In recent months, the average 30-year fixed mortgage rate has edged down. Part of the decline can be attributed to a continued gradual compression of the mortgage spreadthe difference between the 10-year Treasury yield and the average 30-year fixed mortgage rateas some investors slowly regain their appetite for mortgage-backed securities (MBS) and help fill the void left by the Federal Reserve when it stopped buying MBS in spring 2022. The other factor putting downward pressure on mortgage ratesand long-term yieldshas been a recent stretch of softer-than-expected labor market data and financial markets growing expectation that the Fed will shift policy from restrictive to neutral. Even though the Feds expected short-term rate cuts havent happened yet (a 25 bps Fed cut is expected tomorrow), analysts at Bank of America believe that most of the 2025 decline well see in mortgage rates is already baked in. In fact, in a forecast Bank of America published on Tuesday, they project that the average 30-year fixed mortgage rate will likely end 2025 at 6.25%. What would it take to get the average 30-year fixed mortgage rate to 5.0%? The MBS team [at Bank of America] does see a path to a 5% mortgage rate if the Fed does MBS quantitative easing and yield curve control, driving the 10-year [Treasury yield] down to 3.00%-3.25%, wrote Bank of America analysts in a report published on Tuesday. When Bank of America says MBS quantitative easing, they mean the Federal Reserve going out and buying mortgage-backed securitiessomething it has done in recent decades when the economy and labor market have weakened. Long-term yieldssuch as the 10-year Treasury yield and the average 30-year fixed mortgage rateare determined by demand (or lack of demand) for the underlying bond. Yields move inversely to bond prices. If demand for long-term bonds rises, bond prices go up and yields/mortgage rates fall. If bond demand falls, bond prices drop and yields/mortgage rates rise. Hypothetically, if the unemployment rate were to spike and the economy weakened, financial markets could respond with a flight to safetydriving up demand for Treasuries, which would push bond prices higher and yields/mortgage rates lower. At the same time, the Fed could respond with emergency cuts to the federal funds rate and, if the downturn were severe enough, potentially resume purchases of mortgage-backed securities (MBS), adding further downward pressure on mortgage rates. Big picture: IF the average 30-year fixed mortgage rate falls to 5.0% anytime soon, Bank of America believes it would likely be because the economy has taken a negative turnor perhaps because the central bank adopted a new policy approachand resumed buying mortgage-backed securities.
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An experimental GLP-1 pill from Eli Lilly just outperformed Novo Nordisk’s oral semaglutide. In a new study, Eli Lilly’s oral pill, orforglipron, helped lower diabetes patients blood sugar more and weight better than Novo Nordisks (sold under brand names Ozempic, Rybelsus, and Wegovy). According to a Sept. 16 press release, three separate doses of the new drug (6 mg, 12 mg, and 36 mg) demonstrated “significant improvements” in body weight reduction compared to a placebo at 72 weeks. “Obesity is a complex, global health challenge and patients need treatment options that are both effective and easy to integrate into everyday life,” Sean Wharton, M.D., director at Wharton Medical Clinic and lead investigator, said in the release. Wharton continued, “In this Phase 3 study, orforglipron demonstrated strong efficacy results and safety consistent with the GLP-1 class, reinforcing its potential as a first-line treatment in primary care. Additionally, orforglipron could help reduce known markers of cardiovascular risk associated with obesity and support meaningful improvements in public health.” Notably, the highest dose of the new drug lowered A1C more than Novo Nordisk’s drug, semaglutide, bringing it down by 1.9 percentage points compared to 1.5 percentage points. Similarly, the new drug worked better for weight loss, with a 8.2% reduction, compared to 5.3%. According to the release, the company is advancing the drug toward regulatory submissions. It said it anticipates it will be submitted for treatment of type two diabetes next year. However, experts say the new drug could be fast tracked under the Food and Drug Administration’s (FDA) new Commissioner’s National Priority Voucher Pilot Program. The standard review takes 10 months, but under the pilot program, it could be available in two. “People living with obesity have broad and varied needs whether it’s improving weight, A1C, lipids, blood pressure, or other health markers that primary care physicians routinely address with their patients,” said Kenneth Custer, Ph.D., executive vice president and president of Lilly Cardiometabolic Health. Custer continued, “We’re encouraged to see orforglipron improve many of these areas in ATTAIN-1. As a convenient, once-daily pill that can be scaled globally, orforglipron could be ideally suited for early adoption in primary care where proactive intervention has the potential to lead to meaningful, long-term health improvements.”
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The Food and Drug Administrations guidance on who needs the COVID-19 booster shot has changed, but many insurers will still be covering the costs for enrolleesat least through the end of the year. AHIP (formerly known as Americas Health Insurance Plans), the largest U.S. health insurance association, said Tuesday that its members will continue to cover vaccines with no cost-sharing for patients, following recommendations issued by the Centers for Disease Control and Preventions vaccine advisory committee as of September 1. Late last month, the FDA dramatically altered its approval for the COVID vaccines, clearing the shots only for people 65 and older or who have underlying health conditions. Those changes sowed confusion among people seeking the shot and could make it more difficult to obtain in the future. Health plans are committed to maintaining and ensuring affordable access to vaccines, the group wrote in a press release. “While health plans continue to operate in an environment shaped by federal and state laws, as well as program and customer requirements, the evidence-based approach to coverage of immunizations will remain consistent. The statement from AHIP is notable due to the massive number of Americans covered by its member companies. They include Aetna, Elevance Health, Kaiser Permanente, Cigna, CVS Health, Centene, and many Blue Cross Blue Shield state providers. The groups full member list is available on its website and illuminates which insurance providers say they will cover recommended vaccines through the end of the year. AHIPs members account for coverage of more than 200 million Americans, though the countrys largest insurer, UnitedHealth, left the association in 2015. According to the insurers website, most UnitedHealthcare plans include COVID-19 vaccines at no additional cost, but patients could be responsible for a co-pay if receiving a vaccine during an office visit. Fast Company reached out to UnitedHealth about its COVID-19 vaccine coverage and will update this story when we receive a response. A vaccine advisory panel is at the center of controversy The health insurance associations announcement comes during a week of health policy unpredictability. On Monday, the federal government announced that five new members selected by Health and Human Services Secretary Robert F. Kennedy Jr. would be added to the CDC advisory panel that sets national recommendations for vaccines. The Advisory Committee on Immunization Practices, also known as ACIP, has been a particular nexus of concern in light of Kennedys history of sowing vaccine skepticism and spreading anti-vaccine misinformation. ACIP safeguards the health of Americans by issuing objective, evidence-based vaccine recommendations, Kennedy said in a press release on Monday. Its new members bring diverse expertise that strengthens the committee and ensures it fulfills its mission with transparency, independence, and gold-standard science. Kennedy has moved quickly to reshape the committee, firing all of its previous members in June and accusing the group of corruption, which he said necessitated a clean sweep. Over the coming days, I will use this platform to announce new members to populate ACIP, Kennedy wrote on X in June, claiming that none of the new members would be ideological anti-vaxxers. We should care as much about every child who could be injured by one of these products as we do every child who could be injured by an infectious disease, Kennedy wrote, referencing a common anti-vaccine talking point. Kennedys remade advisory panel, which includes vaccine skeptics and members with no prior vaccine expertise, meets late this week and may vote on recommendations for the hepatitis B vaccine, COVID-19 shots, and the childhood vaccine schedule. The panel is expected to delay the hepatitis B vaccine given to newborns until age 4, according to former CDC officials. The ACIP vote could impact what vaccines are covered for Americans next year. Former CDC Director Susan Monarez testified in the Senate on Wednesday, issuing grave warnings about Kennedys influence on U.S. health policy. Kennedy ousted Monarez last month after she declined to fire CDC leadership and refused to green-light the remade panels changes to U.S. vaccine recommendations. “Given what I have seen, if we continue down this path, we are not preparednot just for pandemics, but for preventing chronic health disease. And we’re going to see kids dying of vaccine-preventable diseases,” Monarez said.
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