In this weekly market update, lender Jordan Keck greets viewers, notes a brief holiday weekend, and then covers several key topics for borrowers and real‑estate investors. He reports that average mortgage rates have slipped back to 6.96% after a mid‑week spike, marking the first time the “6” prefix has appeared in a while. Keck then explains a DSCR (debt‑service‑coverage‑ratio) or no‑income loan product for investors buying 1‑10 unit properties, highlighting that cash‑flow alone can satisfy underwriting, with typical down payments of 20‑25% and the option to include renovation allowances. The economic data segment reviews January CPI (headline up 0.5% month‑over‑month, year‑over‑year 3.0%, core 0.4% month‑over‑month, 3.3% YoY) and its negative impact on rates, followed by January PPI (wholesale inflation up 0.4% MoM, 3.5% YoY, core 0.3% MoM, 3.6% YoY) and how its component revisions are expected to ease future PCE inflation. Retail sales data showed a 0.9% decline, the biggest drop in two years, with online sales down 2%, suggesting consumer strain amid high credit‑card debt. Keck summarizes Fed Chair Jerome Powell’s semi‑annual congressional testimony, noting that inflation expectations appear anchored but tariffs could pose risk, and that markets now anticipate rates staying higher longer. Finally, he reports modest changes in initial (213k) and continuing (1.85 million) jobless claims, cautioning that benefit expirations may affect the numbers. He closes by encouraging viewers to share the video and stay safe.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. And happy Valentine's Day. A lot of snow out there. Hopefully you're staying safe and warm, able to just relax and do a lot of work from home here in this long weekend because we also have Monday as President's Day for another day off as a holiday. So if you have anything comes up over the weekend, let me know, be available. But again, hopefully you'll be able to stay safe and warm and get right back to it this next week. Some good news kicking off for the market update. We have interest rates moving down a little bit. Wednesday they had spiked up, but then Thursday and Friday gained back quite a bit of that and actually even better levels than when we were at before, moving from 7.03 on average last Friday, going up even higher than that this Wednesday. And of course today, moving down to 6.96. Nice to see 6 in front of that number for the first time in a while here. And for our weekly mortgage tip, wanting to talk about something that it's becoming a lot more relevant, especially for investors. I've talked about being on the commercial side here. And one of the loans is a no income loan for investors or a DSCR, debt service coverage ratio loan. Now this loan, if you're buying a property from 1 to 10 units, and that property's cash flow is able to cover the mortgage payment itself, we don't need to verify individual income. We still need a credit score on that, but we're not going to look at tax returns. We're not going to look at pay stubs because the property is cash flowing itself. Ideally, cash flow is 25% more than the payment itself will be, but I have investors who were able to go as little as 0.8%, meaning even if the property doesn't completely cash flow, In certain circumstances with a strong borrower, they can make that work. These are going to be anywhere from 20 to 25% down or more for most occasions, can even include renovation as part of that. So some great programs available. Let me know if you have any clients that are interested in those who are investors or looking at multiple units. Again, you can do this on a fixed 30-year loan up to a 30-year period for up to 10 units. If it's mixed use or outside of that, I can help on the commercial side as well. So Great programs there for investors, especially if they have a lot of write-offs on their tax returns, haven't had a lot of time in business. This is a great program for investors to get some more properties. Next up, as far as data goes, January CPI, Consumer Price Index inflation, was up a big 0.5% or half a full percent, which is a big jump above the expected 0.3%. This coming in earlier in the week is the reason why rates were moving higher around Wednesday. Because the market did not like that data. Year-over-year inflation increased from 2.9% to 3%, which is also above expectations. As within the report, energy rose 1.1% for the month alone, accounting for the majority of that headline number increase. Food was also up 0.4% for the month. Used car and vehicle insurance rose 2%. And shelter, which is the biggest component of the report, shows a 4/10% monthly increase, significantly above where the rest of the market is showing that to be. The core rate, which strips out food and energy prices, rose 0.4%, which is double market estimates of, uh, 0.2%. And year-over-year core rose from 3.2% to 3.3% when it was expected to drop to 3.1%. So very strong report, not good for mortgage rates, and that's again why we saw a big spike up on rates. Wednesday. The reports that did help us this week though were next to— we're talking about January's PPI, or the Producer Price Index inflation report for wholesale inflation. That showed wholesale inflation up 0.4% in January with a lot of revisions in the past months. And overall, the reports actually came in stronger than expected, but the market reaction to them was positive. Year over year, wholesale inflation is up 3.5%. Core is up 0.3% for the month and up 3.6% year over year, which is down from 3.7%. And the reason for a lot of the revisions is every January, PPI comes out and does some benchmark revisions for the year and for the past several months. And a lot of the benefit that we saw in the market reaction has to do with the internal components, which get factored into the producer price or the producer personal consumption expenditures inflation report. A lot of inflation reports. And the PCE reports, which should be coming out soon, which is what most people look at as the heaviest factor in determining the Federal Reserve interest rates, those components indicate that PCE inflation should be moving lower. So that's why even though the headline numbers for PPI didn't look great, it's the internal components which get factored into PCE inflation, which should be helpful for us moving forward. And then today, retail sales. For January came in very weak, and this was further fuel to the fire of rates in our favor. They showed a decrease of 0.9%, quite a bit below the expected 0.1% decline in January retail sales. There were also some positive revisions to December, but still overall a very soft reading and the biggest drop we've seen in about 2 years. While this may have been impacted to some, you know, a little bit of the retail sales numbers may have been impacted by harsher weather, by the fires in California. What we also saw was that online sales fell 2% for the month, which shouldn't have been impacted. So this may be an indication of broader consumers trending, running out of funds, stretching themselves to the max. As we've talked a lot about credit card debt being over $1.2 trillion, about 41% above pre-COVID credit card debt levels, and people just may be getting tapped out. And next up here, Federal Reserve Chair Jerome Powell had his semiannual testimony in front of congressional testimony, assuring lawmakers that inflation is in check. With that, he said inflation expectations appear to remain well anchored, but there is some uncertainty about the effect that tariffs may have moving forward, as they could have a potentially inflationary effect. Likelihood of Fed rate cuts as a result has gone down, with markets expecting rates to stay higher for longer. And lastly here, initial jobless claims fell 7,000 for first-time filers for the week. Continuing claims fell 36,000. Continuing claims now at 1.85 million and initial claims at 213,000. Not a whole lot of changes on that side. We see them go up, we see them go down. The unknown factor is how many people are getting off of continuing claims because they are having the expiration of their benefits rather than getting back into the workforce. Tough to say, but again, not seeing any major changes one way or the other on that. As always, hopefully this is helpful. If you know somebody that would— you think would benefit, feel free to pass this along. They can get subscribed down below. Hope you have a wonderful weekend. Again, stay safe out there. We'll see you next week. Take care.
