Issue 42. September 18th, 2023

Happy Monday💸

Another great weekend of NFL football, and awesome weather here in Northern CA. I hope everyone had a relaxing time, especially as we head into FED WEEK.

We spent the entire weekend (finally) painting all of our interior doors at our house.

That “EZ-UP” almost launched into the neighbor’s yard (twice) when the wind picked up. Kids thought it was hilarious. Parents, not so much. LOL

If you’d like to test your communication skills and how strong your relationship is with your spouse, try a 2-day weekend project where not everything goes according to plan. That should get you to an answer pretty quickly, lol.

Shout out to my lovely wife, Jamie. Thank you for all the heavy lifting and boat load of work you did this weekend. Couldn’t have done it without you… Even though you frustrate the hell out of me sometimes ❤️

There is a bunch of news below, including a rehash of a First Time Home Buyer (FTHB) perk that hasn’t been talked about a whole ton, but we have used every single time we have had the opportunity this year!

Have a wonderful week.

– Glenn T. Groves

TLDR (Too Long Didn’t Read) Summary:

• ↔️ RATES – 3 Week Trend

  Verify my mortgage eligibility (Oct 3rd, 2023)

• 📊 TECHNICALS – Time For A Break

• 💰 INDUSTRY– First Time Home Buyers Access Cheaper Rates

• 🕰️ INSPIRATION – Gary Vee

  Verify my mortgage eligibility (Oct 3rd, 2023)

RATES

Product Rate / APR Weekly Change

↔️ Conventional (Zero Point) 7.375% / 7.341% -.000%

Conventional (One Point) 6.950% / 7.065%

↔️ Conv. HB (Zero Point) 7.625% / 7.635% -.000%

Conv. HB (One Point) 7.125% / 7.250%

⬇️ JUMBO (Zero Point) 7.500% / 7.552% -.125%

JUMBO (One Point) 7.000% / 7.160%

↔️ FHA 3.5% Down (Zero Point) 6.625% / 7.357% –.000%

FHA 3.5% Down (One Point) 6.250% / 7.086%

↔️ VA 0% Down (Zero Point) 6.750% / 6.997% –.000%

VA 0% Down (One Point) 6.375% / 6.723%

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: 3rd straight week of stagnating, boring rate movement. And here is why that is a good thing:

  • Gives the media a chance to catch up on what is going on. We don’t have to deal with nearly as much “I heard rates did this” from consumers. Then I have to provide them with the news that their info is inaccurate.

  • Buyers and sellers can get acclimated to what the rate market is doing rather than attempting to keep a finger on the pulse of a volatile market.

    Verify my mortgage eligibility (Oct 3rd, 2023)
  • Re-enforces that with rates hovering in the mid to low 7s and now seemingly stable (ish), savvy borrowers can make a move before the hoards of fence-sitting pre-approved buyers jump when rates eventually retreat to the 6s. The longer we sit here, the bigger the flood will be when rates make a .375% – .675% move downward.

Stay sharp. All this stability could be turned on its head Wednesday.

TECHNICALS

Ready For A Rate Brake

Jerome Powell – Chair of the Federal Reserve of the United States

Signs are pointing to a potential break in rate hikes. This could signal that the Fed realized that the unprecedented rate hike cycle for the last 18 months is finally taking hold. The next issue could be that they over-corrected with how aggressive they were, and we’re just at the beginning of a bullwhip effect. Time will tell.

Friendly reminder: The Fed Funds Rate (what we are talking about here) are NOT mortgage rates but can affect them.

📈 Consumer Inflation Overview 📊

• August’s CPI Increase: Inflation rose by 0.6%. Annually, it jumped from 3.2% to 3.7%.
  • Why? 🚗 Surging energy and gasoline prices took the lead.
  • The Good News: Food and shelter costs remained steady, and used car
    prices even declined.
• A Closer Look: This rise isn't as bad as it seems, given last year’s high of 9.1%. New York Fed's John Williams even hinted at lower inflation if housing costs were better accounted for.

📦 Wholesale Inflation: Should We Worry? 💼

• August’s PPI Data: It went up by 0.7%. Annually, it’s gone from 0.8% to 1.6%.
• What’s Behind the Numbers: Like with consumer inflation, energy prices are driving the numbers up.
• The Bigger
  Picture: The Fed has been hiking rates to keep inflation in check. Recent statements from key figures hint at a potential break from this trend. Mark your calendars for Wednesday’s Fed meeting conclusion! 📅

🏡 Home Price Appreciation: Reaching New Heights 📈

• CoreLogic’s Insight: Home prices increased for the 6th consecutive month, rising 0.4% from June to July. The forecast suggests a rise of 0.4% in August and 3.5% annually.
• Zillow’s Two Cents: They’ve reported a 4.5% increase in home values since January, indicating a potential 7% appreciation this year.
• What Does It Mean?: Consistent growth across multiple sources (CoreLogic, Zillow, Case-Shiller, and more) emphasizes the robustness of the real estate market. Owning a home remains a strong investment choice. 💰

📊 Jobless Claims: A Closer Look 👩‍💼

• Latest Numbers: Initial Jobless Claims increased by 3,000 last week. Continuing Claims saw a hike of 4,000.
• The Larger Context: While the increase might suggest a healthy job market, the holiday-shortened week might have influenced these numbers. Furthermore, given the recent trend in job postings, hirings, and working hours, layoffs might be on the horizon.

👀 This Week’s Watchlist 📌

• 🏗 Housing Reports: Updates from the National Association of Home Builders, Housing Starts, Building Permits, and Existing Home Sales.
• 🏦 Federal Reserve: Their meeting kicks off on Tuesday, with a public statement, rate decision, and press conference coming on Wednesday.
• 📈 Other Key Data: Stay tuned for the latest Jobless Claims and September's manufacturing details for Philadelphia.

🔍 Deep Dive: The 10-Year Technical Analysis 📉

The 10-year is often seen as a benchmark in the financial world, influencing various rates and financial instruments. Here’s what has been happening recently:

• 📈 Recent Movement: The 10-year has breached a significant resistance level, moving past the 4.29% mark.

  Verify my mortgage eligibility (Oct 3rd, 2023)
  • What Does This Mean? Resistance levels in technical analysis are like barriers. Once they’re broken, it can indicate a strong move in the direction of the breach. In this case, the move upwards could signal higher rates ahead.

• 🎯 Next
  Target: The next technical ceiling (or resistance) for the 10-year stands at 4.36%.

  • Why Is This Important? If the 10-year touches and retreats from this point, it might indicate a short-term peak. However, if it breaks through, the 10-year could continue its upward trajectory.

• 💡 Historical Context: The
  recent movement is significant because it has pushed the 10-year to levels not seen in a while. For those in the mortgage industry, a rising 10-year can sometimes hint at rising mortgage rates, though the relationship isn’t always one-to-one.

• 🌐 Broader Implications: For real estate agents, a rising 10-year might mean costlier borrowing. Potential homeowners could face higher mortgage rates, which might affect the buying appetite.

  Verify my mortgage eligibility (Oct 3rd, 2023)

10Y T Note 09.18.2023

Stay informed, stay ahead. Best wishes for the week! 🌟🏠

Note: Data and insights sourced from various industry publications and expert analyses.