Market Update - Rates, ADU income, Gov Shutdown, Divided Fed, and Home Prices

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates unchanged week over week at 6.34%. Saw rates move up a little bit on Monday, come down a little bit throughout the week, so overall pretty flat. A lot of that has to go with some of the data we're going to be talking about this week the government shutdown and how that's delaying a lot of the market-moving reports. First off, quick reminder as well that we do have Indigenous Peoples Day/Columbus Day on Monday, which is a federal holiday. So no closings, doesn't count for right of rescission period, doesn't count for CD or LE waiting period timeframes. So hopefully you've already planned accordingly for that. If you do have anybody who's looking to get pre-approved, let me know. You know, I'll still be able to touch base. Call, text, email, let me know. I'm happy to help out with that, but hopefully you have a great weekend anyway. As far as weekly mortgage tip, new from Fannie Mae this week is they now are allowing income from an ADU on a single family to be able to qualify, whether this is a purchase or a rate and term refinance. So not a cash out. Couple of the requirements, it does have to be a single family primary residence, and again, be a purchase for a rate-and-term refinance transaction. Now, similar to if you're doing a multifamily transaction, you don't have to have it occupied in order to count rental income, and you can use a rent schedule on an appraisal to determine what those market rents will be, and they can use 75% of those to help qualify. So great news for single-family homes with ADUs, being able to now count that for income, help people qualify for more at the same time. Next up, government shutdown. We are now on day, I believe, 9 or 10, and a big part of this is it's delaying a lot of the jobs reports and data that's coming out that are traditionally market moving. So the BLS jobs report's a big one for these here, as well as unemployment numbers. And without those, because the market's typically going to react to them, the information we would have seen led to a lot of traders on standby, essentially waiting to see what that data will show. Nobody really knows how long we could be delayed. Talking to, you know, some of the members in Congress, some in government, they think it could be potentially into November that the government shutdown lasts until they start seeing more pressure from government employees who've been furloughed, not receiving paychecks. Some of them will, some critical employees will, most of them won't be, or they'll only get half paychecks. Of course, everybody will get retroactive pay once it's finished, But for those living paycheck to paycheck, really big impact here with at least 750,000 federal employees, not including the members of the military. So again, as a result of this, a lot of the data points just on standby. And there's also the Federal Reserve, who is not part of Congress, they're a separate entity, and they often rely on those reports when making their forward decisions. Right now, the market's still pricing in about a 95% chance of the Federal Reserve cutting interest rates another quarter at their meeting the end of this month for October. But if we still don't have a lot of the data points for the month, we don't have the same jobs data, we might get a bit of a hesitant reaction from the Fed in determining what they're going to be doing for their next meetings here at the end of the year. So right now, Congress and the Fed look like very, very different opinions on where to go. Next up here, Cotality's Home Price Index for August showed that home values dropped 0.3%, still up year over year 1.3%, but it is a deceleration from the July number we had of 1.4%. And this is also taking into account before rates fell in September. So this is still higher rates. They forecast that home prices will be increasing by 4% in the coming 12 months, likely taking into account an expected higher amount of demand due to lowered interest rates in September. So it's a bit of a shorter news week here because some of this data again is still just delayed. But as always, hopefully this is helpful. Always happy to be a resource for you. If you have individual questions or scenarios, let me know. That's what I'm here for. Have a fantastic 3-day weekend. We'll see you next time.