Mortgage News

This is a big deal. For a typical FHA loan 3.5% down the Monthly mortgage insurance is 0.85% or for a $500k home that would be $341 monthly. The new annual premium will change to 0.55% or $221 monthly.

There are other premium changes for high balance loans, shorter amortization and larger down payment. This change will take effect on March 20th.

More than 80% of FHA borrowers are first-time homebuyers.

With regards to yesterday’s blog regarding the PCE report due out today, inflation rose 0.6% in January, Hotter than estimates. Y/Y readings were above estimates and moving in the wrong direction.

On a positive note, New Home Sales rose 7.2% in January.

Have a great weekend and always available if you have any questions.

Prices for goods and services constantly change. the PCE index tracks what a consumer pays and represents that as a number.

You have a basket of goods and services, each with a Different weight. If gas prices go up, that would have a larger impact on the PCE than the price of tomato’s because gasoline represents a larger portion of your total spending.

This is the preferred way the Federal Reserve measuring inflation. There are forecasting models that point to lower inflation by June 2023. Lower inflation typically translates to lower rates.

Stay tuned CPE numbers come out tomorrow.

From Germanic source it’s an Old High German bank or bench, moneylender’s exchange table.

Back to business: Bond Market is rebounding this morning after a tough couple of days. The unemployment rate is now at a 50-year low. The Fed may need to hike another 3 times.

Mortgage applications are down mainly because the interest rates ticked up the last week.

There is less competition for an already tight housing inventory which is good for buyers.

We are half way through the week, we can do this….

Have you wondered what Mardi Gras means? Well it literally is French for Fat Tuesday.

I was at John Wayne Airport May 4th last year and overheard one businessman asking the other “so when is Cinco de Mayo anyway”..

Sometimes what we are looking for is right in front of us. There is so much focus on the pending recession, earthquakes, layoffs, Murder Bees (ok that was a few years ago), but the point is there.

I am not seeing a slowdown in purchases. In fact we are seeing the opposite. Multiple offers and typically at or above list price. The unemployment rate is historically low and Spring is right around the corner.

Rates are what they are. We need to play the cards we are dealt and don’t throw away the aces.

Have a great week and always here to help.

Todays post is about how to keep moving forward in a rate sensitive environment. As a buyer or seller purchasing or selling can be scary. Is it the right time to buy, is it the right time to sell. I want to get the best deal or the highest price for my home.

A lack of decision is its own decision. Inventory is low keeping home prices up. Interest rates are historically not high – Freddie Mac 30y data.

To many buyers are on the fence not getting back in the market. If you wait for the right moment you’ll be confronted by everyone else. Same with sellers. The opportunity to sell in a tight market is exactly what you want.

Enough of my ranting, go watch Glengarry Glen Ross and get back out there.

I Speak for home buyers trying to get qualified for a mortgage. With the bond yields up, rates are also up. Qualified borrowers need to double check with their lender. What a difference a week makes.

On a positive note, Builder Confidence increased 7 points from 35 to 42 from a scale 1-100. To fully appreciate the increase, put yourself in the builders shoes. Existing home owners benefit as they are living in their home even if they can’t sell.

Builders on the other hand hold the inventory from start to finish and beyond. They have all the skin in the game and take all the risks. To see positive movement is a huge plus.

We are floating our clients locks as we feel the bond market is oversold and will rebound next week.

Consumers continue to spend. No category saw a decline. Food Services up 7.2%, Motor Vehicle and parts dealers up 5.9%, Furniture and home furnishings stores increase 4.4%.

Recap: Consumer spending makes up about two-thirds of all economic activity in the U.S.. The purpose of the Fed rate hikes are to reduce demand as supply tries to catch up. I am sure Jerome Powell is scratching his head thinking, what to do what to do.

The bond market yield continues to go up and that is not good for rates.

There is only 33 more days until Spring. Hang in there.

If the Bond Market truly loved me, it would not be misbehaving.

The January (CPI) Consumer Price Index showed overall inflation increased 0.5% but Y/Y only declined from 6.5% to 6.4%. Not what we expected.

Digging deeper, Used car prices went down 1.9% but energy prices went up 1.9%. Shelter contributed by far the most with a rise by 0.7% to 7.9%.

Bottom line is we are not out of the woods yet.

Have a fantastic rest of your week.

Words are important, words convey meaning and intent, but words can be confusing.

When you purchase a home you are inundated with documents; contract, addendums, loan disclosures, Title report and the home inspection.

We are the professionals traveling at 100 miles an hour on a train and expect the borrower to run at our speed. We have to slow down and let them on.

Flammable and Inflammable mean the same thing.

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

Its Friday, I’m going to keep this light…

Pig-Pen may be Patty’s Jungian Shadow. the dark side of the fifties suburban ideal. In 1956, Charlie Brown describes Pig-Pen as “the only person I know who can raise a cloud of dust on a clean sidewalk.” It’s a subtly disorienting moment.

If the sidewalk was clean… where did the dust come from? In 1956, Pig-Pen is describes as “a Human Soil Bank”. Part of the Agricultural Act of 1956, the Soil Bank incentivized farmers, threatened by drought and manufacturing boom, to remove farmland from production. – Elif Batuman

You woke up this morning wondering, what am I going to learn today. Well I solved that for you.

Lock-em if you Got-em. Bond Market is not cooperating this week. Though I’m sad, I will not allow the Bond market to define who I am.

Oh and I had to look up what Jungian meant. Interesting read.