Market Update -Rates, CPI, jobless claims, mortgage applications, and home values

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Quick reminder as well that this coming Monday is a bank holiday, so I'll still be available for anything you need, but it does not count for days of closing, doesn't count for loan estimate or CD closing timeframes. So if you have any deals that are maybe getting pushed over to Monday, It's actually going to be looking at Tuesday for closing, so keep that in mind. Interest rates moving up a little bit more this week after the big jump we saw last week, moving from 6.53% to 6.62%. A lot of that has to do with stronger than expected inflation data, stronger than expected employment data last week especially, and the Federal Reserve commentary coming out more and more saying that they're okay not necessarily cutting as aggressively moving forward. A lot of the reasoning they gave behind cutting for 50 basis points rather than 25 in their September meeting was because some of them wanted to cut a little earlier in June or July. Since they didn't, they're kind of making up for lost time. But moving forward, really going to be data dependent. And so as that data comes in stronger, it's less likely we're going to see the Fed move aggressively on those rate cuts. And that's why mortgage rates are responding negatively now. As far as our weekly mortgage tip, wanting to talk— I have a lot of experience lately with condos, and one of the most difficult things I always run into is working with homeowners associations. So I wanted to give you some tips around whether you're the listing agent or buyer's agent on a condo, things you can do to be able to help make that smooth for the buyers on that transaction. So whenever you've got financing on a condo, 9 out of 10 times you're going to need the homeowners association to give some documents over to the financing side. The most common one of that is going to be a homeowner's association questionnaire, and based on the information, that questionnaire may need some additional things as well. One of the most common is going to be a copy of the master insurance policy, copy of the budget, copy of the balance sheet. So those are some things, if you have a good contact with the homeowners association, you can ask for those things ahead of time, especially as a listing agent to make it very simple and easy for potential buyers to not only process the loan, but even to see if it's financeable up front with their loan type. If you're not the listing agent on this transaction, best thing you can do as a buyer's agent is try and get contact information for someone at the HOA as quickly as possible. Often there's very little incentive at the HOA for them to provide this information, but it's going to hold everything up. Sometimes the appraiser may even ask for that before before delivering their report. So hopefully that's helpful. Again, if you're in the process of a transaction with a, with a condo right now, have any questions, let me know. Especially recently, I've had a lot of experience with it, so brushed up and ready to go for the next ones. As far as data this week, we got the September Consumer Price Index report coming in showing consumer inflation up 0.18%, almost twice the estimates of 0.1% for the month on the headline number. Year over year decreased from 2.5% to 2.4%, still higher than the 2.3% expected, and then the core rate, which strips out food and energy prices, that also rose more than expected at 0.31%. Year over year increased from 3.2% to 3.3% when there was estimates it might stay the same or even decrease to 3.1%, so not great for us on the inflation front there. Some of the factors in the higher reading were transportation and vehicle insurance, which especially if you're watching the insurance world right now, a lot of changes there, prices moving up. And so we saw 1.4% and a 1.2% increase in the month alone for those two categories. Next up, initial jobless claims coming in for the first time, spiking up much higher than expected at 33,000 more for first-time claims last week, coming in at 258,000. This is well above the estimates of 230,000. And this matches the high that we saw in August of 2023. Continuing claims also rose significantly, up 42,000 for 1.861 million continuing claims, people filing more than one week in a row for unemployment, near the highest levels that we've seen back to November 2021. The next step, the Mortgage Bankers Association reported that refinance applications, after being up significantly, declined 9% last week which isn't huge though, because they're still up 159% year over year due to the drop in interest rates. They declined week over week because we started to see those rates go a little bit higher. Purchases were flat week over week and are up 8% year over year for new applications. And lastly here, Black Knight came out with their home price index report showing home prices up, or home values up, just a little bit, just barely over flat at up 0.12% for the month in August and are up 3% year over year. This is a decline or a deceleration in the growth we saw in the previous report that showed year over year prices were up 3.6%, showing that there's still growth, it's still continuing to improve, but it is decelerating from the levels that we have been seeing. As always, hopefully these reports are helpful for you. If you do ever want to see me cover anything different, please let me know. Want this to be valuable, so Hopefully you have a fantastic weekend. We'll see you next time. Take care.