Market Update - Rates, BLS jobs, JOLTS job openings, ISM services, and home price forecasts

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Starting off, interest rates continuing to move a little bit higher here this week, going from 7.07% last week to 7.15% as of today. Likely might see that move a little bit higher as well. Got some more jobs data today that markets are not liking. For that, kicking off with our weekly mortgage tip, I want to talk about community property states versus non-community property states. So especially if you have anybody who's looking to buy in Washington, in Idaho, kind of surrounding areas, California, Oregon is one of very few states that are non-community property, meaning that when you are married, you are not automatically responsible for the debts of your spouse. In a community property state such as California, Washington, Idaho, if you are going to be, you know, if you get married, you are automatically responsible for your spouse's debts. And on a mortgage, that can impact you. So if you're doing a government loan, you're doing FHA, you're doing VA, anything like that, you know, conventional loan, this doesn't really take into account, mostly it's VA and FHA. Even if you're buying a home by yourself, we will still need to pull a credit report on your spouse, even if they're not on the mortgage, because we need to factor their debts against your income. We don't take into account their credit score. If they're not on the loan, we're not counting any income, but we do still count those monthly payments against you when you're qualifying. So again, big difference, especially if you've got somebody who's looking between Portland and Vancouver— happens a lot— or if somebody is looking to move down to California. Make sure you keep that in mind and have their lender do that pre-approval upfront. Especially somebody who's just used to Oregon, they might not be as familiar with that and getting their spouse to have a credit report even though they're not going to be on the loan. So hopefully that helps you prevent some surprises. As far as our data this week, the big one that just came out today was the December BLS jobs report. It's the Bureau of Labor Statistics, and they come out with two reports. They come out with their headline report, and then they also come out with their household survey report, which is where the unemployment numbers come from. The overall number came in showing 256,000 jobs created, which is quite a bit above the 160,000 that was expected. There were some downward revisions over the last 2 months of reports, but that only shaved off about 8,000. So we're still significantly above where we are expecting. The stronger the jobs numbers and the stronger the employment data, the higher interest rates are typically going to go for the mortgage market. Remember, weakness in the economic market means good things or better rates on the mortgage side. The household survey component of it showed about 478,000 total job gains, while the labor force increased by 243,000, leading to a lower unemployment rate from 4.2 to 4.1. So very strong report. The next one, we also saw the JOLTS jobs openings report come in at 8.098 million, also above estimates of 7.7 million job openings. It was an increase from an upwardly revised 7.839 last month after an initial reading of 7.74. So not only did this month come in stronger, but last month revised higher. The quit and hiring rate still showed a little bit of weakness, with quits decreasing from 2.1% to 1.9%, which is the lowest since 2014 when excluding COVID. And hiring fell from 3.4% to 3.3%. Also the lowest since about 2013 when excluding COVID. Between these two strong jobs reports this week here, the Fed meeting minutes in December from their meeting showed that the Fed's really not looking to do a whole lot of cutting in 2025. They're likely going to pause at their next meeting given the strong data here, with only two interest rate cuts projected throughout the entire year. Each one of those probably going to be 25 basis points or 0.25%. So maybe looking at half a point in total cuts for this following year. Next up, the ISM Services report went from 51.1 to 54.1, well above estimates of 53.3. The prices paid component also rose from 58.2 to 64.4, which is a huge beat versus expectations of a decline to 57.5, and a measure of inflation which markets do not like. So just keep getting bad news for rates this week. And lastly here, CoreLogic's Home Price Index for November was flat, but their forecast for '25 rose from 2.4% gains in prices to 3.8% increase overall in home values. Their month over month was pretty much right on target with their estimates at 0.02%, so essentially flat, and year over year gains are still up 3.4%. Which is unchanged from the previous two reports. So still seeing those, uh, consistent home value gains. They anticipate December will be another flat month overall, but that 2025 will show that 3.8% gain, which again, big, big change because they were previously just anticipating that 2.4% for the year. So between last report and this report, increased their projections 1.4% for home price gains. So good news for those in the market or getting into the market, showing that there's gains. In home value will likely continue moving forward. I hope you have a wonderful weekend. As always, talk to you next time. Take care.