In this weekly market update, Jordan Keck reminds lenders of upcoming holidays (Veterans Day on Nov 11 and Thanksgiving on Nov 27‑28) that may affect loan closings and advises planning for rescissions and disclosure waiting periods. He notes a modest week‑over‑week rise in mortgage rates from 6.28% to 6.38%, attributing it to limited Fed rate‑cut momentum. Keck then explains Debt Service Coverage Ratio (DSCR) loans, a product aimed at real‑estate investors—detailing eligibility (investment‑only properties, use of rent‑based income, credit‑score focus), documentation (no tax returns, credit report, payment history) and typical down‑payment ranges (20‑30% depending on unit count). The segment shifts to labor‑market data, highlighting record WARN act layoff notices (202,612 in a six‑month rolling total, highest since 2009), Challenger’s 153,000 job cuts in October (22‑year high), ADP’s modest 42,000 job gains, and declining hiring plans, all suggesting continued labor‑market weakness. Finally, Keck reports Cotality’s home‑price figures: a 0.2% month‑over‑month decline for September, a 1.2% year‑over‑year gain, and a 12‑month price forecast of +4.1% driven by lower rates and expected demand. The update concludes with a courteous sign‑off.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, I do want to remind you that this coming Tuesday, November 11th, is a holiday. We got Veterans Day here and then also Thanksgiving here at the end of the month, Thursday the 27th. But keep in mind, the 28th is most likely going to be a day that companies are either closed or they're going to be shutting down early. So probably planning on both the 27th and the 28th being holidays. Plan accordingly for your closes, write a rescission for refinances, and waiting period for closing disclosures. As far as interest rates, going up slightly week over week from 6.28% to 6.38%. So a little bit of fallout from the Fed rate cut that we saw earlier in the month, or early here this last month. In the commentary about not necessarily cutting rates again at their December meeting. So for mortgage tip this week, want to talk about DSCR loans for investors, or debt service coverage ratio. Now these are great loans for borrowers who are maybe self-employed, who don't have a long enough history to be able to count their income, or who don't show enough on paper because they've got great accountants and want to write a lot off but still make good money. Internally. So debt service coverage ratio loans are basically loans where they're just for investment properties. They're not for primary residence or second home where you're living in it, but they'll use in-place rents or market estimate of rents to be able to show if it meets or exceeds the current mortgage obligation, then that is income enough to be able to be approved. We don't look at income, we don't look at tax returns, just take a credit report for their scores, confirm that their current payments, if they're refinanced, have been on time or paid. And then down payment, it's going to be based on the number of units, typically 20% up to maybe 30% down from 1 unit all the way up to 8 to 10 units. So this kind of crosses over that 1 to 4 limit threshold for residential. So if you have a client who's looking at buying or refinancing a 5, 6, 7, 8 unit property, this can be a great program for them. Then next up, as far as news here for this week, In October, we saw the highest number of layoff notices since 2009. The Worker Adjustment and Retraining Notification Act, or the WARN Act, requires employers with 100 or more employees to provide at least 60 calendar days advance notice, written, of a plant closure or mass layoff affecting 50 or more employees at a single site. And as of October, the 6-month rolling total of these WARN notices increased to 202,612, which again, the highest that we've seen since 2009. MacroEdge's October report showed job cuts at a 25-month high. These are the announcements, so these may not have taken place yet, as systems like the WARN Act require advance notice to be given before employees are actually impacted. Job placement stocks are also down 20% for the month of June, while the S&P 500 was up 17%. Showing job placement stocks not doing well and hints at continued weakness in the labor market. We're looking at some of these alternative reports here to things like the BLS report that we'd normally get for unemployment and for job creation because of the government shutdown. So we're not getting them and having to focus on alternative reports. Next, the Challenger Job Cuts report showed 153,000 job cuts in October, which is the highest in 22 years. Year to date, there have been over 1 million job cut announcements, the highest 10-month period since 2009. We'll see if that continues here over the next couple months to finish out the year. For perspective, there's 7.4 million people who are unemployed, so having 1 million job cut announcements is very, very significant in relation to the total number of those who are unemployed. Plans to hire are also down 35% from this time last year, and year-to-date plans to hire is the lowest number since 2011. ADP's October report showed 42,000 job gains. It's above the 24,000 that was expected, but still pretty low overall. You look at the last 3 months, there was a total cumulatively of 10,000 job gains because we've seen negative numbers out of 3 out of the last 4 months. Both small and medium-sized businesses lost jobs, so all of the job gains for the month were in large businesses, those with 500 employees or more. Lastly, Cotality reported home prices declined 0.2% for September. They're still up 1.2% year over year, a slight deceleration from the 1.3% that we saw for the month of August. The forecast for the coming 12 months though is higher at 4.1%, likely due to the lower interest rates we've seen. They're factoring in that's going to be increasing demand and pushing home prices higher. As always, hopefully this is helpful. Have a great weekend. And we'll see you next time. Take care.
