In this weekly market update, lender Jordan Keck reports that mortgage rates have nudged higher, moving from 6.84% to 6.87% with a possible rise toward 7%. He provides a mortgage tip on VA loans, explaining that co‑borrowers who won’t occupy the property are prohibited, but an exception can be made if a non‑veteran co‑borrower contributes at least a 12.5% down payment. Keck then cites CoreLogic data showing mortgaged homes added about $425 billion in equity year‑over‑year, with an average equity of $311 k per home and total U.S. home equity of $37 trillion. He reviews November inflation numbers: CPI rose 0.3% month‑over‑month (headline 2.7% YoY, core 3.3% YoY) and PPI rose 0.4% month‑over‑month (3.0% YoY headline, core 3.4% YoY), driven largely by sharp increases in wholesale fruits, vegetables, and eggs. Finally, he notes that initial jobless claims increased by 17,242, exceeding expectations, while continuing claims rose to 1.886 million, a three‑year high, indicating labor market softness. He closes with a friendly sign‑off.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Starting off, interest rates moving back higher after we saw a little bit of reprieve, but all of this last week they've been moving pretty steadily higher here. Last week at 6.84, this week at 6.87, and looks like by the end of today probably going to see that even higher. Maybe even touching back up into the 7s. Every scenario is different, so some clients are still getting down in the low 6s, some are going to be seeing into the 7s, but in general, just seeing that trend moving a little bit higher this week. As far as our weekly mortgage tip, wanted to talk about VA loans and having co-borrowers or co-signers. So VA does not allow any co-signers who won't be living in the property, so that's flat out. But when you have somebody on the loan, typically VA only allows the loan to be under the name of the veteran and at most the veteran's spouse. If they aren't married, or if you wanted to have somebody else living in the property with them that wasn't married to the veteran, VA typically says that that is a no-go. There are some exceptions though. So when VA guarantees the loan for somebody, they guarantee 25% of their total loan amount. So if you have somebody else with them, maybe it's a family member that's not married, VA will make exceptions on occasion with a 12.5% down payment, because that's essentially covering the non-veteran's portion of that loan. Doesn't always happen. I have successfully gotten exceptions on these a few scenarios if somebody has a down payment of 12.5% or more. So if you're running into a scenario where the veteran themselves isn't married but want to have somebody else on the loan with them who will be occupying the property, let me know. We can run through it, but you're going to have to at least meet that 12.5% down payment minimum. Next up, CoreLogic reported that homes with mortgages gained about $425 billion in equity year over year. This isn't taking into account homes that have been paid off free and clear, so this is just the portion of homes with mortgages, which are about 62% of all homes, meaning 38% do not have any mortgages at all. About 34.5 million homes are owned free and clear in the U.S. Those with mortgages have a total have an average equity of about $311,000 overall, and total equity for all homes, including those paid off, in the US is $37 trillion with a T. Next up, we got CPI consumer inflation and PPI wholesale inflation. CPI, you know, for November rose 0.3% for both the headline and the core numbers, both pretty much as expected. The headline number was a little bit above expectations, but the core came in right where we expected it to. Year-over-year headline number decreased from 2.5— excuse me, went up from 2.5 to 2.7%. And then core CPI year-over-year remained at 3.3%. The biggest components of these were used cars, which rose 2% for the month, and hotels or lodging away from home rose 3.2%, leading to some of the big changes in this month's CPI number. The other thing that was really helpful was the rent component of the CPI, which makes up about 27% of the total. Came in pretty modest for the month, finally catching up after we've seen some lagging numbers for quite a while which haven't really been keeping up with the market. And similarly for PPI for November, the wholesale number, that one beat expectations coming in at 0.4%, twice the number expected at 0.2%. Year-over-year, PPI rose from 2.6% to 3.0%, and the core rate rose 0.2%, which matched estimates for the core. Year-over-year core rose 3.4% overall, mostly due to upward revisions from the previous report, even though it originally came in at 3.1%. Now, of that, there was a 31% rise in the cost of fruits and vegetables on the wholesale side for the month alone, and a 55% rise in the cost of chicken eggs. These two items alone accounted for about half of the overall headline inflation number, So if it wasn't for those two, would have come in pretty much right in line with expectations. And lastly here for the week, initial jobless claims rose 17,242 for those filing for the first time, above estimates of 220,000. Continuing claims rose 15,000 to 1.886, with this number being pretty stubbornly high. We've been following this for a while. Anything above about 1.8 is pretty high, and it's been that way for a very long time now. Right now, been at the highest level it's seen in about 3 years. So just showing harder for people to get back into the workforce after being let go or leaving. And this isn't even counting people who have expired their benefits after, I believe, 24 to 26 weeks. So it'd be interesting to continue to watch that as we go into the new year and don't see as many holiday hirings as well. As always, hopefully this is helpful for you. I hope you have a wonderful day. We'll see you next week. Take care.
