Mortgage News

2PM EST (Eastern Standard Time) Fed Chair Jerome Powell will speak at a press conference post todays statement release. 25bp hike is in the bag but what will Mr. Powell say about inflation, recession, job growth and how many hikes are left.

We are still Floating our clients but very aware of the Time Zone…

Have a great rest of your week and here to help.

I have clients that are waiting for the other shoe to drop. Remember 2008, I do and this is not it. All the Data points to home prices up 7.7 to 8.2% y/y. It’s about inventory and demand. Don’t Wait, the train is leaving the station.

A quote from FHFA “U.S. House prices were largely unchanged in the last four months and remain near the peak levels reached over the summer of 2022, while higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”

Today is National Fun at Work Day and Hot Chocolate Day.

We have allot going on this week. Earnings reports, Feds and Debt Ceiling.

Apple, AMD and Google lead the busiest week of reports. The Feds will have their first meeting and a rate decision of 2023. And let’s not forget about the Jobs report.

The US has already hit its statutory limit on debt earlier this month but we can prevent a default. The important take away is the Debt Ceiling posturing will remain a threat for months to come. Stay tuned.

On a side note… my two teams lost their bid to the Super Bowl Sunday.

That sums it up… PCE or Personal Consumption Expenditures – Inflation Report was slightly higher but Y/Y fell from 5.5% to 5%. This was expected.

Consumers i.e. you and I are spending less, this is good for inflation and rates. Pending home sales are up 2.5%. even though sales are down compared to last year it is moving in the right direction.

We are slowly crawling out of the hole.

Have a great weekend and happy to take your calls and emails.

We hear the word Recession but do we really know what it means. Technically its “a contraction in economic activity”.

To be more specific its “a Significant decline in Economic activity that spreads across the economy and last more than a few months”.

Think about how you spend money now compared to last year. If you are pulling back, fewer dinners out, keeping the car or that dishwasher that needs replacing, you are part of the indicator of a recession.

Consumer spending makes up about 70% of the U.S economy. As you spend less so goes the industry with layoffs and downsizing.

Recessions are generally short lived and not always a bad thing. It slows down that speeding train not derails it.

I’m feeling like a broken record but I’ll take it… Rates drifting lower, mortgage applications are up including refinance. Inflation moving the right direction.

Friday is the day the PCE comes out, Personal Consumption Expenditures. This is the value of goods and services purchased by U.S residents. Feds are watching this closely.

We are going to float our clients for now.

Have a great rest of your week.

In our industry but really in every industry, technical language can be intimidating or a put-off. As Einstein once said, “Anyone can make something sound complicated. It takes true genius to make it sound simple”.

I’ll give this a shot: Lets say you want to invest some money and you decide to buy bonds, specifically a 10y Treasury vs a 2y Treasury. The expectation is if you invest in a longer term, your yield or return on investment would be greater. Normally that is true but not now.

The 2y Treasury is outperforming the 10y meaning the “Yield Curve” is reversed or “Inverted”. This historically is a strong indicator of a recession a weakness of the economy.

Well, maybe I get an A for effort… Have a great week.

Hiring Plans fell to a negative number, the first time since the Pandemic. There is an easing of labor and material shortages, half reporting no shortages. Capital expenditures/investments on business fell to lowest level since the pandemic. Profit margins also fell third month in a row. -source NABE Jan report.

In a nut shell, rates should continue to decline. Seems counter intuitive but think of the bond market as a cozy fire in a nice warm house where you can go to feel safe. More peeps in the house, the lower the interest rate.

Have a great week and always feel free to reach out.

Headlines in the media are filled with the latest statistics regarding the Housing market and anything else you can think of. be careful of their seduction.

It’s not all doom and gloom but it’s not a bed or roses either. Life moves on, life finds a way. It’s time to get to getting.

Have a fantastic weekend.

Washington D.C. has 22 residence per 100k, but Washington State has the highest at 100 per 100k. Go figure…. source stacker.com

Back to business at hand; Inventory is up, Mortgage applications are up and the interest rates are down. We may not be out of the woods just yet, but I can see the clearing and the Sun is out.