Market Update - Rates, BLS Jobs Revisions, Home Prices, Wholesale & Consumer Inflation

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates keeping their low trend here, moving from 6.29% average to 6.27%. Lots of refinances happening right now. So if you are working with another lender, suddenly getting slower to respond, not returning your calls, not giving as much attention, let me know. I have a great team here able to take care of the refinances. We always prioritize those purchases. Also note that you might want to factor in a little bit of extra time around title and escrow, around appraisal, because they're still going to be handling multiple transactions here, not just the purchase side. So factoring in those additional timeframes if they're extra busy, just in case. As far as mortgage tip this week, wanted to talk about reverse mortgages and specifically using a reverse mortgage to purchase a home. A lot of people that think about reverse mortgages will think that it's just the refinance of an existing property, but in reality, you can actually use it to buy. So I had a client earlier this week that wanted to buy a property. They got great equity in their current home. They want to sell it, buy another one. Because they're on a small fixed income, would only qualify for a loan amount of about $180,000, and even that was going to put them more than they wanted for their monthly payment. When we looked at the numbers, they're 63 years old. Typically, you just have to be over 62 to qualify for a reverse mortgage, and they were able to get a loan of about $350,000 from doing the reverse mortgage and not have to pay principal and interest payments on that. So not only did it allow them to get into the home with the amount that they needed, but it also allowed them to get into it more comfortably financially with their fixed income. So if you have questions for you, for any clients over 62 years old in an existing home or wanting to buy with a lot of equity, let me know. Happy to run those numbers for you. As far as next up on news, we have the BLS annual jobs revisions. And so the BLS, when they come out with their jobs reports numbers, They're going to show job gains or losses for the month, and then they're going to have 3 different rounds of revisions. The month after, they revise it. The month after that, they revise it. And then once a year, they'll do an annual revision. In this revision, through the 12 months prior to March 2025, they lowered the total number of jobs reported by 911,000, which means on average, each month of those 12 months, they overstated the jobs report by about 76,000 jobs. So 52% of all of the jobs reported during those months never actually happened. They were never created. This is the largest revision on record showing the labor market is much weaker than originally reported, giving further fuel for the Federal Reserve to continue cutting interest rates, which is virtually guaranteed at their next— at their meeting next week, going to drop them about a quarter, most likely again at their October meeting. If we continue getting these weak jobs reports. Next, Cotality's Home Report Insights for July showed that nationally home prices fell 0.2%, weaker than the gain of 0.5% that was expected. They also reported that home prices rose 1.4% year over year, which is still positive, but it's decelerating quickly. They're forecasting a 0.2% gain for the month of August and a 3.9% year moving forward appreciation. Down slightly from their previous forecast of 4.2%. Wholesale PPI inflation numbers came in that fell 0.1% for the month, which is below the 0.3% gain that was expected, further helping us on the inflation side because the lower inflation, the lower the jobs report numbers, the better we're going to see on mortgage rates. The previous reading of 0.9%, which came in very hot, was also revised lower to 0.7%, further adding weakness to this report. Year over year, the numbers fell from 3.1% to 2.6% for PPI inflation, below the 3.3% that was expected. And lastly here, the CPI consumer price inflation report for the month of August rose 0.4%, a little bit above the 0.3% that was expected, but not a huge miss for us. It wasn't really hurting too bad as far as rates go. Year over year rose from 2.7% to 2.9%, mostly due to energy prices rising. Energy rising was 0.7% for the month alone, and gas costs rose 2% just in the month. The core rate, which strips out food and energy prices, rose 0.3%, which was right in line with estimates, and year-over-year remained at 3.1% as expected. As always, hopefully you have a fantastic weekend. I'll see you next time. Take care.