Issue 45. October 10th, 2023

Happy Monday Tuesday💸

Welcome back if you had a long weekend, and if you didn’t, don’t act surprised when people tell you, “It sure feels like Monday!”.

The big news over the weekend was the terrible attacks in Israel. We did not know what to expect with the markets re-opening this morning. Money flooded to bonds for safety. As a result, the increase we felt over the last week was erased.

In personal news, I played tourist this weekend with some of my wife’s family visiting from Michigan. It’s always fun to re-experience all our area offers and try some new things!

🌲Armstrong Woods and a few 🍷 wine tastings were among the highlights!

Have a wonderful week.

– Glenn T. Groves

TLDR (Too Long Didn’t Read) Summary:

• ↔️ RATES – Up, then down this morning, so even.

  Verify my mortgage eligibility (Dec 5th, 2023)

• 📊 TECHNICALS – September Review of Jobs Reports

RATES
➡️ OCTOBER 10TH, 2023

Product                                            Rate / APR                                   Weekly Change

↔️ Conventional (Zero Point)          7.625% / 7.641%                                   +.000%

Conventional (One Point)                      7.250% / 7.383%

⬇️ Conv. HB (Zero Point)                    7.875% / 7.921%                                    -.375%

Conv. HB (One Point)                       7.500% / 7.649%

↔️ JUMBO (Zero Point)                   7.750% / 7.799%                                    +.000%

JUMBO (One Point)                          7.375% / 7.513%

↔️ FHA 3.5% Down (Zero Point)     7.000% / 7.737%                                    +.000%

FHA 3.5% Down (One Point)          6.625% / 7.457%

⬇️ VA 0% Down (Zero Point)           7.000% / 7.248%                                     –.125%

VA 0% Down (One Point)                6.625% / 6.972%

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year Fixed mortgage, Purchase & R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment .Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification.

Rates highlighted in this color have the same metrics as above, but would incur one discount point charge.

• 📊 Mortgage Rates: After last week’s published rates, we saw a rapid market deterioration because of various financial and job reports. Rates shot up and down as a bit of a rollercoaster.

• With the markets re-opening today after the holiday yesterday, there was a rush to safety (bonds) because of the Israeli / Hamas news, and the resulting rate movement brought us right back to where we were last Monday, the 2nd.

  Verify my mortgage eligibility (Dec 5th, 2023)

TECHNICALS

Balancing Job Trends with Real Estate Ripples

Recap of the September reports. All eyes are now on the 2 global conflicts between 🇺🇦 Ukraine / 🇷🇺 Russia and 🇮🇱 Israel / 🇵🇸 Hamas. We could see significant movements in the markets moving forward as events unfold. Stay informed!

1️⃣ Soaring September Job Growth Defies Expectations

📊 BLS Report Highlights:

• 336K jobs created in September.
• The unemployment rate remains steady at 3.8%.

🧐 Deep Dive:

• Household Survey suggests only 86K job creations.
• Noticeable increases in part-time workers and multiple job holders, while full-time workers saw a dip.
• Implication: Watch out! The Fed may consider another rate hike on
  November 1st.

2️⃣ Private Payrolls at Weakest Pace in Almost Three Years

📊 ADP Report Highlights:

• Only 89K jobs added in September.
• +92K jobs in hospitality but losses in other sectors.

🧐 Deep Dive:

• Annual pay increases have cooled down, hinting at reduced wage-pressured inflation.

3️⃣ Job Openings Take a "JOLT" Forward

📊 JOLTS Report Highlights:

• Job openings rose to 9.61 million in August.

🧐 Deep Dive:

• Openings are down by 6% YoY, suggesting some overcounting due to remote job listings.

4️⃣ Tame Unemployment Claims Paint a Different Picture

📊 Claims Report Highlights:

• Initial Jobless Claims: 207K.
• Continuing Claims reached their lowest since January.

🧐 Deep Dive:

• Job cuts year-to-date are at their highest since 2009, with the exception of 2020.

📅 What’s On The Horizon?

• Keep an eye on the upcoming inflation reports: the Producer Price Index and the Consumer Price Index.
• The Fed's minutes releasing on Wednesday could stir the market waters.
• Mortgage Bonds are currently resting on support, with potential
  for growth.

🔗 Sources:

1. Bureau of Labor Statistics
2. ADP Employment Report
3. Job Openings and Labor Turnover Survey
4. CoreLogic
5. Black Knight

INDUSTRY

🌕 Home Prices To The Moon?

Skyrocketing Home Prices: What’s Driving the Surge?

📊 Housing Report Highlights:

• Record Peaks: Home prices have hit new highs for four consecutive months.
• Growth Pace: CoreLogic and Black Knight both signal strong appreciation, with projections of around 8% for 2023.

🧐 Deep
Dive:

Market Dynamics: The current demand continues to outstrip supply. With historically low mortgage rates, many first-time homebuyers have entered the market, and this surge in demand, coupled with a limited supply of homes, has propelled prices upwards.

Location Shift: The pandemic has reshaped where people want to live. With the rise of remote work, many are looking for homes in suburban or rural areas, pushing up prices in previously less sought-after locations.

Investor Activity: Institutional investors are purchasing homes, especially in hotspot areas, driving up prices. Their presence in the market, combined with their ability to make cash offers, often places them at an advantage over individual homebuyers.

Construction Costs: Lumber prices and overall construction costs have seen significant increases. This directly impacts the cost of new homes, leading builders to either pass on the increased costs to buyers or halt projects, thus reducing the supply further.

Future Outlook: While CoreLogic’s forecast hints at a 3.4% appreciation in the coming year, it’s essential to note that these predictions are historically conservative. Given the current monthly data, we’re potentially looking at figures closer to 8% appreciation.

🔗 Sources:

1. CoreLogic's Home Price Index
2. Black Knight Home Price Index
3. Zillow Home Value Index
4. Federal Housing Finance Agency Reports

Created by Glenn Groves

Loan Scenario Question?

• Email the team: TeamGlenn@gtgfi.com

  Verify my mortgage eligibility (Dec 5th, 2023)

Options For Your Clients

• Schedule Call: 1 on 1 with Glenn

• Apply Now: Online Application