In this weekly market update, Jordan Keck reminds lenders and borrowers about the upcoming Juneteenth federal holiday and its effect on loan closing dates. He reports that mortgage rates fell from 7.29% to 7.03% but rose again due to stronger‑than‑expected job numbers. Keck offers two mortgage tips: (1) financing mixed‑use properties depends on an appraiser’s determination of the property’s highest‑and‑best‑use, and (2) income‑producing agricultural properties are generally acceptable only if they are hobby farms, not active farms or leased agricultural operations. He then reviews key labor‑market data – the April JOLTS report (8.059 M job openings, below expectations), ADP May jobs (152 k, below expectations), and the BLS May report (headline 272 k jobs added, household survey showing 408 k job losses and unemployment rising to 4%). He explains how the headline strength pushed rates higher despite the unemployment increase. Keck also shares housing‑market data: Black Knight reports 1.1% month‑over‑month home price appreciation in April (5.3% YoY) and CoreLogic forecasts a 0.8% rise in May and 3.4% growth over the next year. Finally, he promotes a community poker night on June 28 with a $10 buy‑in, offering beginner and experienced tables.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. I want a reminder as well that coming up in a couple of weeks on the 19th is Juneteenth, which as of just a year or two ago has become a federal holiday. So no closings that day, doesn't count for CD period. So just make sure to take that into account with your closing dates. If you do happen to have a closing scheduled for the 19th, might want to make sure everybody's on board with either closing a day earlier on the 18th or moving that to the 20th. So again, just want to make sure not any surprises there. First, interest rates this week moving down last week from 7.29% to 7.03%. Of course, that was as of first thing this morning. Does look like markets jumped up higher due to some of the job numbers we're going to get into today, which were an unexpected surprise. But at least for a while, we had some good progress, might see a little bit of that undone today. As far as our weekly mortgage tip, we want to talk about mixed-use properties. This can be a really tricky one for people because if you've got a property that, let's say, is in an area that's zoned for mixed-use, primarily it's a single-family house, but maybe there is a dentist office that's operating out of it, or, you know, some other kind of business. Maybe there's a mechanic operating out of the garage. Can that get residential financing? The answer is a little bit complicated, and it usually comes down to what an appraiser would consider highest and best use of the property. Now, if they decide that the highest and best use of the property is as a business in its current form and function, then you're not going to be able to get residential financing on it. If, however, they do say that the best use, the highest and best use, is residential, then you'd be okay. And then what they use to determine that is often one of, is it legally allowable? Is it feasible financially and physically? You know, would there have to be a lot of changes to the space that wouldn't make it feasible financially to do what the business could be doing? So there's a lot of factors that go into that. You know, sometimes it's a pretty cut and dry yes, sometimes it's a cut and dry no, and oftentimes there's a little gray area that's going to be determined by an appraiser. So just know, if you're running into those, feel free to always pre-flight them by me. I have some great appraisers I can reach out to for stuff like that and get their advice before we go into making a decision that's going to put an inspection and an appraisal cost on the line. And last one I'll just touch on here is, as far as income-producing properties, if you've got anything that's agricultural, you know, if it's a hobby farm type setup, that's usually fine. But if there's any kind of active full-on farming being done on the property, or any kind of lease that you have on it. That's often a big no-no for lenders who say that they cannot be an active farm, even though if it's just a hobby farm, you may be planning to do that. They don't want to see it currently being done for any kind of agricultural use. Next up, the April JOLTS report showed, which is the job openings report, showed 8.059 million job openings, which is below the 8.34 million that was expected, almost about 300,000 below. This is the lowest level since February of 2021, and March was also revised lower from 8.488 to 8.355 million job openings. Next up, Black Knight, their home appreciation report came out showing homes were up 1.1% in April alone after being up 1.2% in March. So some really big numbers there coming out of spring months. Year over year, homes are up 5.3%. And CoreLogic also came out with their report showing that they forecasted May home prices to be up 0.8% and anticipates a 3.4% growth over the next 12 months. So strong numbers still on the home side. Next up for jobs, ADP's jobs report for May showed 152,000 job creations, which was lower than the 175,000 expected. April was also revised lower from 192,000 to 188,000 jobs created. This came out a couple of days ago earlier in the week. And so this helped out with the market for interest rates. But unfortunately, the thing that came in today which hurt us was the BLS jobs report. Now they have two components. They have a headline number and they have the household survey number. The household number is more of an estimate. They use a lot of models in this. And the headline showed 272,000 jobs created versus the 185,000 that was expected. So they beat it by almost 100,000 jobs. That shift from the expectations is the thing that really hurt the rates this morning, hurt the markets on it because it showed this unusual strength. There were also some negative revisions to the previous 2 months, but the total for those were only about 15,000. So still a really big beat on the headline number. The unfortunate part is when you look at the household survey, which is where the unemployment rate comes from, they actually showed 408,000 job losses in the same report, and the labor force decreased by 250,000. Because there were more job losses than the labor force decreased, the unemployment rate did move up from 3.9% to 4%. So how can you get an increase in the unemployment rate while showing 272,000 jobs created? The BLS numbers, don't understand them, but because that headline number was so strong, that is why the markets reacted negatively. See a little bit higher interest rates even though the unemployment rate increased. And last piece here as well, there are still a couple of spots available for the poker night coming up here June 28th. So if you or somebody you know is interested, would like to play, even if you don't know how, we will have a beginner's table that's able to pair you up, you know, teach as well as get people with a similar level of experience, as well as having 1 to 2 tables with people with a little bit more experience. There'll be a really great time, only $10 buy-in. So let me know if you're interested. It is invite only, but ultimately, at the end of the day, good people having good times is what it's all about. So if that's something you're interested in, let me know. We'll give you spots there. I'll talk to you later. Have a great weekend. See you next time.
