Market Update -Rates, existing home sales, housing starts, DOM drop, and jobs reports

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Sorry for missing you for a couple of weeks here, but back at it. Looking forward to a new month here, starting to feel like spring out. And so some good news, I mean, rates, especially since the last couple of weeks ago, significantly lower than they've been, now hovering around that 6 3/4 range. It did move up a little bit week over week, but not too bad, from 6.74 to 6.79. And again, remember, this is an indicator of conventional rates for top-tier scenarios, uh, with a little bit of buydown amount— not a huge amount, but just standard origination charges— across lenders throughout the country. So every situation is going to be different, especially for government loans. If you're looking at VA, USDA, or FHA, a lot of those seeing in the low 6s, if not the high 5s right now, so great place to be. Good tip this week, USDA actually finally came out and said they will be doing loans for existing manufactured homes. Traditionally, they've only done them on brand new manufactured homes built within the last 12 months and never lived in. A couple years ago, they started a pilot program for homes that were built within the last 20 years, and now they're rolling that out to everybody. So the only restrictions on this really come down to the same ones that you'd require for FHA. Has to be on a permanent foundation, has to be the, uh, no alterations or modifications to it except for porches and, um, you know, decks, which have to be confirmed by an engineering report. Really, the main difference on this is that it has to be built within the last 20 years of the funding date of the loan, whereas FHA, they just require be built newer than 1976. So as long as it's newer USDA now able to lend on manufactured homes. Next up, reports for existing homes for January. Existing home sales fell 4.9%, which was below estimates. Year over year, it's up 2%, with a current annualized pace of 4.08 million units for sales if you annualize it out. Inventory did rise 3.5% last month, which is up 16.8% year over year, but it's still significantly below pre-pandemic levels. Based on some of the information we've already seen from February, likely to see that number continue to pick up month over month. Housing starts and permits were down, both of them for January, in both single-family and multi-family housing. So starts fell almost 10%, with single-family down 8.4% and multi-family starts down 13.5% month over month. These are off of the highest readings of 2024 in December, though. So the 3-month and 6-month averages are still right in line with where they are. We're just coming off some very high numbers, so a bit of a drop like that to be expected. While single-family starts have remained steady the last few years, multifamily did see a big increase in 2021, 2022, and 2023, but they saw a big drop-off in 2024. With an average of 2 years from starts to completion, especially on the multifamily side, this will likely mean less multifamily completions in 2025 and 2026, which could lead to rents rising if demand continues to outpace supply in that situation. So could be seeing some increases on the horizon over the next couple years. Next, realtor.com reported that February saw a 10% drop in days on market for listings. This is an indication of things starting to heat up with the spring buying season. While January did see an increase in days on market from 35 to 41, similar to that existing home sales number we saw dropping for the month, we may see that number continue to drop, go down, the days on market in February and in the coming months as things are heating up. Next, job reports. ADP employment report came in showing 77,000 jobs created for February, lower than the 140,000 expected. There was a small 3K positive revision to January as well, bringing it in at 186,000, but there was a negative 215,000 jobs revision for 2024's figure, which is pretty significant. And lastly, the February BLS jobs report number came in at 151,000 jobs created, slightly below the 160,000 expected. So not a huge difference there. What was different, though, was the household survey component, which is where the unemployment rate comes from. This showed 588,000 job losses in the same month, while the labor force decreased by 385,000. Because the jobs decreased more than the labor force decreased, that meant as a result, the unemployment rate moved up from 4% to 4.1%. Always, hopefully this is helpful for you. Let me know if there's any additional information or tips you'd like me to cover, and hope you have a fantastic weekend. See you next time. Take care.