Market Update - Rates, Home Sales, Inventory, Rents, Gov Shutdown, and CPI

Good morning and happy Friday. Jordan Keck, your lender buddy, with your weekly market update. Kicking off, interest rates moving down slightly again from 6.23% to 6.19%. This is according to Mortgage News Daily for average lenders across the country for the top tier client scenarios with at least 25% down, conventional, owner-occupied, $800 credit scores, big loan amounts, and a small amount in points. So remember, this is not a rate quote. This is just an indication of where rates are moving in general with, uh, the entire market. Next, as far as our weekly mortgage tip, wanting to chat through the maximum allowed seller credit on a purchase transaction. So for government loan programs, FHA, VA, USDA, this is a pretty standard number. VA is going to be 4% of the sales price. FHA is 6%, and then USDA often mirrors that as well at 6% of the sales price. Now, that being said, conventional is going to be different depending on the circumstances. If it's owner-occupied, then it's less than 10% down, it's 3% allowed maximum. If it's between 10% and 25% down payment owner-occupied, then it's allowed to be 6% of the sales price, and 25% down or more owner-occupied is 9% of the sales price is allowed. If it's non-owner occupied, so an investment property purchase, in that situation the max is only 2% of the sales price regardless of down payment. So hopefully this is helpful to avoid situations where you're asking for more than is allowed and later have to come back and revise those numbers. As far as news this week, existing home sales for September rose 1.5% for the month, so slightly below the 2.5% that's expected. Year over year is now up 4.1%. We're at a 4.06 million annualized pace of sales, and this is still roughly quite a bit below the roughly 5 to 5.5 million normal pace of sales, meaning there's a continually building up of pent-up demand. So hopefully over time, we continue to see those continue back into the market with new buyers. September's inventory was 1.55 million units nationally, up 1.3% from August. That's about a 14% year-over-year increase, and as we naturally see inventory build during the summer, we're likely going to see that drop off here in the next coming months as well. We're at about a 4.6-month supply now with an average days on market of 33, up from 31 in August and 28 in September of last year. Quotality's rent index for August rose 1.4%, which is the slowest growth in the last 15 years. This is a significant deceleration from the 2.3% we saw in July and 2.9% in June. This doesn't mean that rents are going backwards, just that they're going forward at the slowest rate they've seen in some time. The government shutdown now is the second longest on record. We're at day 24 of the shutdown and entering into a time when civilian federal employees are not going to be receiving a paycheck. This is— there are concerns about the military and air traffic controllers not being able to be paid either. There's currently about 13,000 air traffic controllers and 50,000 TSA agents now about to be working without pay. This could be a catalyst for things to end soon. We're seeing a combination between flights getting delayed, TSA issues with bags getting lost, which I can personally attest to here this last week, and dozens of flights getting changed. Um, and lastly, I also say with the IRS shutdown, a lot of clients, if they're looking to do tax transcripts. I've seen that being issues with certain clients. And then of course, USDA loans and FEMA flood insurance also being delayed from those impacts. So hopefully we're going to be seeing the shutdown end soon. But again, second longest on record for the moment at over 3 weeks. And lastly here, September CPI, Consumer Price Index inflation report came in at 0.3%, just below expectations of 0.4%. So good for markets there. Year-over-year inflation rose from 2.9% to 3%, which is still below where the market was expecting at 3.1%. Within the report, energy prices rose 1.5%, all due to gasoline, which was up 4.1% for the month alone. As always, hopefully this is helpful. You have a great weekend, and we'll see you next time. Take care. Mm-hmm.