Jordan Keck delivers a concise weekly briefing for mortgage professionals and home‑buyers. He opens with a modest decline in the national average conventional mortgage rate (from 7.08% to 6.82%). He then provides a practical tip on condo financing, outlining the hurdles for FHA/VA loans, the importance of project‑wide approval, and the utility of the eight‑page Fannie Mae condo questionnaire for conventional loans. Keck explains how June’s Consumer Price Index (CPI) came in cooler than expected (‑0.1% month‑over‑month, headline 3.0% YoY, core 3.3% YoY) and how that eased inflation concerns, supporting expectations of Federal Reserve rate cuts (≈93% probability of a 0.25% cut in September). He contrasts this with the June Producer Price Index (PPI), which rose modestly above forecasts, but notes the market’s focus remains on CPI. He reviews labor market data: initial jobless claims fell to 222,000 (‑17k) while continuing claims stayed high at 1.852 million, signaling potential stickiness in unemployment. Finally, he discusses housing inventory, which rose 6.7% month‑over‑month and 37% YoY, driven largely by Texas and Florida; despite the rise, most regions remain well below pre‑pandemic levels, keeping the market tight. Throughout, Keck maintains a conversational, advisory tone, offering to share resources and encouraging listeners to pass the information on.
Chapters
Good morning and happy Friday! Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, we got a nice little break on interest rates this week, dropping down from 7.08% to 6.82% for the average conventional rate across the country for top-tier loan scenarios according to Mortgage News Daily. As far as our mortgage tip for today, I want to talk about financing condos. For whatever reason, I don't know if it's just me, but I just have a wave of condos in the last few weeks here where people are interested or wanting to put in offers or getting offers in. And condos can be really tricky for a number of reasons. First one is if you are looking at an FHA or a VA loan, often those have to be approved for the entire project before you can even get financing on them. So if you are looking at an FHA or VA loan, there are websites you can go to to be able to see which condos are approved. And at least within the main Willamette Valley, not a whole lot of them are. I think there's only a couple of them that are. So let me know if you would like a copy of those lists. I can send you the websites so we can see those up to date. If you're doing conventional, then you can often— you don't have to have the entire project approved, but but there are a lot of factors that they look at, such as how many investors are there versus owner-occupied. Does any one single entity own more than 2% or 20% of the units, depending on how many there are? Are there enough money being collected in reserves? So there's a lot of potential gotchas that you may not know until you're already involved in the transaction. So one way you can get around that, especially if you are the listing agent on a condo, is have them fill out, have somebody at the HOA fill out the Fannie Mae condo questionnaire. It's about 8 pages long, but they can use that anytime somebody is looking to finance it and provide that same information. So that way you know if somebody's looking to buy it upfront, or if you're a buyer looking to get that done, you want to have that questionnaire as soon as possible. If you have time, ideally even before putting in the offer, so you know if that condo is going to be financeable. Because even if you have one entity owning too many of the units, that alone can make it unfinanceable in some cases. Where if they sell off a couple, now it's financeable again. So definitely tricky. It's a moving target for sure. So let me know if I can be of any help on that side for you. And going into our update here, the main reason we saw interest rates lower was due to the Consumer Price Index, the CPI, coming in for June. And that reading was cooler than expected, actually showed a -0.1%, which is much cooler than the 0.1% gain that was expected, so coming in about 0.2% lower than what the estimate was. This is great for softening inflation, which is of course the Fed's main metric they're looking at for lowering their overnight rates, which could give a little bit of relief on mortgage rates as well. Year over year, that dropped from 3.3% to 3.0% for the headline number, and then core rate, which strips out food and energy prices, That increased only 0.1%, below estimates of a 0.2% reading, and year-over-year dropped from 3.4% to 3.3%, which is the lowest reading since April of 2021. Shelter costs, which is a component of the CPI, that makes up 45.5%. Almost half of all CPI is made up of that. That was a big reason we saw lower is because we're finally getting a lower number on shelter coming in only at 0.2% up for the month. Which the Fed noted was very encouraging when they're looking at inflation. And then the PPI, the Producer Price Index for wholesale inflation, also came in for June. That beat expectations the other direction. It was up 0.2% versus 0.1% expected. May was also revised higher from a -0.2% to flat at 0%, and year-over-year rose from 2.4% to 2.6%. The core rate rose 0.4% above estimates of 0.2%. And rose year over year from 2.6 to 3.0. So even though the PPI did end up beating expectations, because the CPI is the more important one for the markets right now, we still saw all of the gains in mortgage interest rates from the CPI hold steady, even though the June Producer Price Index inflation came in afterwards. And as a result of this, Fed Chair Powell, he expressed a lot of optimism, as well as a couple of other Fed members, that inflation is continuing to head lower, so we may see rate cuts coming sooner than later. The market right now is currently factoring in about a 93% chance that we see the Fed cut rates by about a quarter of a percent at their September meeting, and another possibility for a rate cut in their December meeting as well. So long as we continue to get weaker job reports and the inflation readings continuing to trend lower like we're seeing, that's going to give them the fuel that they need to make those rate cuts. If we get any surprise higher readings, that might push it back even farther. Next up, initial jobless claims fell 17,000 to 222,000 for the week. This is the lowest reading in a while, but because of the holiday July 4th in there, the numbers can always get a little bit skewed. Continuing claims also fell, but only by about 4,000, so the continuing claims total is still around the highest since November of 2021 at 1.852 million. So this is the number that we really want to pay more attention to, because it's going to show if people are on unemployment, how long are they staying there? How quickly are they getting back into the workforce? And of course, as we see a lot, I think last week with the unemployment numbers going up, it's just harder and harder for people to get back into the labor force once they are on unemployment. And lastly here, active inventory up 6.7% for the month of June. Up 37% year over year. And there's been some headlines around this because people are talking about this big amount of inventory coming on the market, how it's bad for, you know, bad for demand, all of these things. But take it with a grain of salt. We're coming off some very, very low levels trending-wise, and we're still 57% below pre-pandemic levels in the Northeast. Midwest is 49% below pre-pandemic levels. And this big month-over-month gain we saw, 6.7%, 2, about a full third of that gain was just from Texas and Florida alone. So when you take those out, then tempered quite a bit on it. A lot of the country still very, very tight in inventory than where we used to be. So yes, bigger numbers, seeing more inventory come on board. Honestly, right now that's a very good thing because we were just so low. So as always, hopefully this is helpful for you. Feel free to pass it along to anyone that may find it useful. Look forward to seeing you next time. Take care.
