Market Update- Rates, BLS and ADP jobs reports, Q2 GDP Estimate, and home prices

Good morning, happy Friday, and happy late Independence Day. Jordan Keck here, your lender buddy, with your weekly market update. Hope everybody had a great and safe time yesterday, and if you're taking today's a longer weekend, hope you get plenty of sunshine. It's hot out there, so staying cool as well. Anyway, wanted to kick off this week's market update interest rates moving up slightly from 7.05% to 7.08% month, week over week, according to Mortgage News Daily. That being said, it looks like there's some developments the last couple days that might start shifting that a little bit more in our favor. Again, I did one day at a time, so we'll take stability for anything that we can get. Next up here, I want to talk our weekly mortgage tip here about flood zones. So flood zones are a really interesting thing because it can change how much you're qualified for In the same way that when you're in a condo, the homeowners association dues can change your monthly payment, and that therefore affects how much you qualify for. So really important to know if a property is in a flood zone upfront, so we can factor in an estimated amount for flood insurance as far as how much that client can get approved for. And then as far as a great resource for you, if you don't already have it, the FEMA flood map search site is fantastic. Has basically a Google Maps search function where you can type in an address and be able to see a real-time overlay of the flood zone with that particular property. I have a link to it in the email down below. It's msc.fema.gov/portal/search. Super easy to use, takes a little bit of time to load sometimes, so if you're not seeing the overlay, give it a couple of seconds. But an interesting thing to note is that if the flood zone is only covering a portion of the property, but not the house itself, it might come back saying it's in a flood zone. But we can manually dispute that and almost always get that overturned. So you don't require flood insurance. But if any part of the actual living structure itself is covered, even if it's just a corner of the house, that's usually meaning you're going to have to have flood insurance on it unless you have a letter of map amendment or a LOMA from FEMA directly, manually removing it from that flood zone. So a lot of tricky stuff. So if you have any questions about this, always happy to help. Also note that if an insurance agent says it's not in a flood zone, doesn't necessarily mean that the lender isn't going to say that it is. They use different systems for determining it. So just know that one doesn't always equal the other. As far as information this week, it was jobs week. So we start off with the BLS jobs report. The Bureau of Labor Statistics came in for June. Showing 206,000 jobs created versus the 190,000 to 200,000 expected. So pretty close, a little bit higher. But there were negative revisions for the previous 2 months totaling 111,000 negative revisions. If you've been following my updates, you know that the BLS has had really big issues as far as posting really high numbers, but almost always posting negative revisions the following 2 months. Unfortunately, a lot of the mortgage rates in the news headlines they're going to react to the new data more so than the negative revisions. But if you look back, I mean, some of these revisions are averaging 50 to $100,000— excuse me, 50 to 100,000 jobs off every single month, which would be very, very different news changing in the market. As far as seeing this more and more of a trend, again, June's numbers revised lower. We might— we're probably going to see June and maybe even May revised lower again in the coming months. So definitely take these with a grain of sand. In the component, the household survey showed only 116,000 jobs created, but the labor force increased by 277,000. So the unemployment rate moved up from 4% to 4.1%. And this is the highest it's been since November of 2021. We also got the ADP jobs report coming in showing 150,000 jobs created for June, below the 160,000 estimate. May was also revised slightly higher, but only by about $5,000. So this one coming in pretty much flat across the board. They also reported income for job stayers, those who stayed in the same job, was up 5— excuse me, 4.9% year over year, which is down from the 5% increase in the previous report, showing it's still going up, but just decelerating a little bit. And then same thing for income job changers, those who changed jobs from last year to this year, income was up from, excuse me, down from 7.8% year-over-year increase to 7.7%. So still increasing, but not going up as fast as it was. Next up, we had the Atlanta Fed Q2 GDP estimate. They always come out and estimate what they think GDP is going to come in for for the next quarter. And they changed their estimate in one week from 3% annual growth to 1.7%. This is a huge change in the course of just a week and equates to about a $400 billion adjustment over the course of the entire US economy. Certain Fed members are also beginning to voice a softening in their stance on rates, noting that with unemployment rates starting to tick higher, inflation on track right now about 2.5%, so very close to their 2% goal, and seeing these, you know, GDP number estimates going down quite a bit, is starting to get them softening that tone, is looking at potentially softening on interest rates. Still a little bit too soon right now. We definitely need to stay this course continually, but this is what the Fed has been saying they've been wanting is lower spending, higher unemployment rates, and lower inflation numbers. So starting to see those things coming about. And lastly here, CoreLogic reported that home prices rose 0.6% for May, slightly below their estimates of 0.8%. This does come off the heels of rising 1.2% in March and 1.1% in April, which are huge numbers just for those months. And so year over year, home prices now up 4.9%, a little bit down from the previous report of 5.3%. Hopefully again, you have a phenomenal weekend. Stay cool out there. It's going to be really hot. If you need anything, let me know. I'll be available for you. Whether again that's a second opinion on a lending situation or just a scenario you need some help with to try and brainstorm on what the best course of action is. Hopefully you have a fantastic weekend. We'll see you next time. Take care.