In this weekly market update, Jordan Keck reports a sharp rise in mortgage rates from 7.01% to 7.37%, attributing the jump primarily to hotter‑than‑expected CPI data and the resulting shift in expectations for Federal Reserve rate cuts. He offers a practical mortgage tip: paying off existing debts at closing can improve a borrower’s qualification by removing monthly payment obligations without harming credit scores. Keck then reviews the NFIB Small Business Optimism Index, which fell to its weakest level since December 2012, highlighting a decline in hiring plans and rising inflation pressures on businesses. He breaks down the March Consumer Price Index, noting a 0.4% month‑over‑month increase (0.1% above expectations), with energy, gas, motor‑vehicle insurance, and especially shelter driving the headline. The Producer Price Index is also discussed, showing modest growth and a smaller influence on mortgage rates. Finally, he examines initial and continuing jobless claims, indicating a slight drop in new claims but persistently high continuing claims, and concludes with a promotion for his book club on "Unreasonable Hospitality," encouraging listeners to join the discussion. The video blends data analysis, borrower advice, and personal engagement.
Chapters
Good morning and happy Thursday! Jordan Keck here, your lender buddy, with your weekly market update. Coming to you a little bit early since I'll be out of the office traveling tomorrow through Monday for a coaching trip in Nashville, so hopefully have some fun times, pictures, and experiences to share with that after I get back. So if you're interested in hearing what we're talking about, let me know. Always some great wisdom on these trips, do them a few times a year. As far as interest rates go this week, moving up, up from 7.01% last week to 7.37% this week. Big jump. A lot of it has to do with the inflation reports we got this week. We'll touch on a little bit both from CPI and PPI because they're readjusting the rate expectations for the Fed rate cuts this year, and the market is not reacting to that well. Uh, first, before we get into that, the weekly mortgage tip. I wanted to talk about paying off debts in order to qualify for a mortgage. So a lot of times if somebody is looking to see what they get pre-approved for, one of the biggest hindrances can often be their current debts. Because when we qualify, we qualify you less for a total dollar amount and more for a total monthly payment. But if you have a car loan, let's say that's $700 a month, that equates to about $100,000 difference in price range you can qualify for with or without that monthly payment. That doesn't matter if the balance is $5,000 or if the balance is $50,000. What matters is the minimum monthly payment on that debt. So what do you do? Well, you can pay that debt off either before you get started or at closing to be able to qualify for a new mortgage. My preferred method is usually paying it off at closing so it doesn't hurt your credit score by paying off the debt, and it's a lot simpler because you don't have to document it ahead of time. The way that this works is, during the process, I would mark in my system that that car loan will be paid off at closing. So the underwriter basically ignores the monthly payment and takes whatever the balance is on that loan and adds it to whatever the buyer's cash-to-close number would be. Let's say it's $5,000. So at closing, we would make sure that we verified enough money for them to bring in their down payment, their closing costs, and the $5,000 for that car loan payoff. At closing on the settlement statement, the escrow company will actually send a check to that car loan company on their behalf. So we know it's going to be paid off and closed. And because of that, we know the check's in the mail. We don't have to account for that payment and can help them qualify with that. Next up here, going into our updates, the NFIB Small Business Optimism Index came out for the month of March, falling from 89.4 to 88.5. This is the weakest reading since December of 2012, and one of the main parts of the weak point was the labor market. Plans to hire fell 11% in this month alone, which is the 4th month in a row that we've seen declines in the plans to hire metric. Inflation component also rose 7 points to a 5-month high, as more businesses are facing the inflationary pressures and having to raise prices as a result, or end up eating the difference and having smaller and smaller margins, which obviously you have to have some kind of margin to be able to stay in business. Next up in here, the CPI. This was the big one. The Consumer Price Index inflation report for March came in hotter than expected by 0.1%. And even though it wasn't a huge deviation— again, 0.1% isn't massive— because it was expected to come in at 0.3% but it came in at 0.4%, that was enough to signal the markets that maybe we're not getting the relief that we had expected. Maybe it was just cyclical, end of the year, wintertime, but going into spring, if that continues to stay hotter, the Federal Reserve will continue changing their tune, lowering the chances of seeing 3 rate cuts this year. So all those people talking about, oh, we're going to see lower rates, we're going to get rate cuts from the Fed. There might be rate cuts this year, but definitely not as aggressive and definitely not as fast as we had expected. And the market readjusting to that new reality. We are seeing those interest rates coming higher. Because remember, it's not the reality of a rate cut, it's the expectation of a rate cut that changes mortgage rates now. And as that expectation changes, so do mortgage rates. The core rate also rose 0.4 versus the 0.3 that was expected. Year over year remained at 3.8, but was expected to drop to 3.7. The biggest factors on this are the energy rose 1.1 for the month. Gas specifically rose 1.7% month over month. Motor vehicle insurance rose 2.6% month over month in cost. Biggest one as well is shelter, which rose 0.4%, but it makes up 45% of the total CPI calculation. So it's a huge impact in that overall headline and core number. Next up, PPI, which is wholesale inflation number. This came in up 0.2% for March, which was slightly below estimates by 0.1%, and year over year rose from 1.6% to 2.1%. But the core rate, which strips out food and energy prices, this rose 0.2%, which is in line with estimates. But the year-over-year rose from 2 to 2.4, which was slightly above estimates. Wholesale inflation isn't looked at as heavily as consumer inflation as far as the impact it has on rates. So again, it wasn't a fantastic report, wasn't a bad report, but with CPI really going in higher than expected, that was the one that took the cake and one of the biggest reasons this week why saw those higher mortgage rates. And lastly here, initial jobless claims. We've been following for a while. Initial claims dropped 11,000 to 211,000 new claims for the week. And then these are people filing for unemployment for the first time. And then continuing claims, those being on more than one week, rose from 28,000 to 1.817 million. We've been watching these numbers for a while now, and we've continued to see them stay elevated, obviously a little higher, a little lower. but not any major changes. And this is a fairly elevated continuing claims number. So again, something to continue watching on here, especially with labor market optimism index not as good as it used to, falling a little bit. So again, we'll continue to track it and keep you informed along the way. Hope you have a fantastic weekend. And last thing I will leave you with as well here is if you haven't already checked out the book club we started, had our first meeting here this week on Unreasonable Hospitality. And pull out so many incredible lessons about implementing into your business, increasing the level of service and hospitality you're providing to your clients to set yourself apart in a very difficult timeframe here. So if you want to join us, we're going to be going through chapters 8 through 14 of the book next month. Love to see you there. Check out the link below to join and join us on the Marco Polo channel as well. Again, have a wonderful weekend. We'll see you next time. Take care.
