In this weekly market update, Jordan Keck reminds viewers that Labor Day is a holiday and will not count toward loan closing timelines. He notes that mortgage rates have edged slightly lower from 6.46% to 6.41% and cites the Federal Reserve’s indication of a possible rate cut next month, emphasizing the benefit of a gradual decline. Keck then explains the new FHA "spot approval" option for individual condo units, outlining the three key eligibility criteria (≤10% of units with FHA financing, no single owner >10% ownership, and ≥50% primary occupancy). He reports July pending home sales falling 5.5% month‑over‑month and 8.5% year‑over‑year, quoting NAR chief economist Lawrence Yun on the expected rebound as rates ease. Rental market data from Apartment List shows new rents slipping 0.1% month‑over‑month and 0.7% year‑over‑year, with vacancy rising to 6.7%, the highest in four years. Home‑price indices reveal modest month‑over‑month changes (Case‑Shiller +0.2%, FHFA –0.1%) but decelerating year‑over‑year gains (Case‑Shiller +5.4%, FHFA +5.1%). Finally, July PCE inflation came in slightly below expectations (overall 0.155% vs 0.2% expected; core 0.161% vs 0.2% expected), supporting the Fed’s case for lowering the federal funds rate. Keck concludes with a hopeful tone for the upcoming long weekend.
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Good morning and happy Friday! Jordan Keck here, your lender buddy, with your weekly market update. Starting off with— I want to remind you that this Monday is a holiday, it's Labor Day, and so will not be counted for closings or as a waiting day for loan estimates and closing disclosures. As far as interest rates kicking us off, very little movement from week over week. We were at 6 6.46% last week, this week at 6.41%. So fairly steady right direction on it. And of course, Federal Reserve already said they're going to lower their Federal Reserve rates next month. So hopefully we continue to see improvement in that direction. And honestly, a nice slow, steady, slow and steady decline is going to be really healthy for the market. I think there would be a lot of problems created if we move down too fast. So this could be exactly what we're needing right now. As far as the weekly mortgage tip, I want to talk about FHA financing on condos. So traditionally, this has been something where the entire project would have to have FHA approval in order to get financing for any one individual unit within that condominium project. Most condominium associations just didn't want to do the extra paperwork, and so I know within Marion County, there's only two that are actually FHA approved currently. But something that's been news to me, you can actually do what's called an FHA spot approval, meaning FHA will finance an individual unit in a project if it meets certain criteria. And so if you have something you're interested in, let me know. But the biggest ones, there are 3 things, are that they can be no more than 10% of the units currently have FHA financing. They don't want to see that any one individual owner or unit has more than 10% ownership. So if you've got, you know, less than 20 units, really looking at if somebody owns more than one might be ineligible. And the last one is they don't— they want to see at least 50% primary occupancy. So they don't want to see a whole lot of people just renting out their units. There's a few other requirements, but those are the big ones. And so if you have a client who is FHA approved looking at potentially getting a condo, let me know. We can work through that and see if that might be an option to do. Next up, pending home sales for July fell 5.5% for the month, below expectations it was going to be a flat reading month over month. Year over year, pending sales are down 8.5%. And NAR Chief Economist Lawrence Yun talked about this saying, with current lower falling mortgage rates, it will no doubt bring buyers into the market, so likely going to see future pending and closed home sales reflect that higher trend, because those who went pending in July, again, likely started looking at mortgage rates a month or two ago when they're a little higher. Now that they started lowering, likely to see that improvement in the coming months. And as far as rents go, Apartment List's National Rent Report showed that new rents fell 0.1% for the month of August. And this is for units that did not have a current renter there. So it's not an existing renter. This is on new people coming in. Year-over-year new rents are down 0.7% and have been negative since last August. Part of that is the national vacancy rate has been moving higher. It's up at 6.7%, which is the highest in 4 years since August of 2020, and it's expected to remain high due to a lot of the multi-family building that's been going on the last few years and is either coming on or already on the market. So giving renters more options so they can be able to have those rents lower than if there's not enough units. Next up, Case-Shiller and FHFA home price appreciation came in for the month of June showing prices up 0.2% and down 0.1% respectively. Prices on Case-Shiller are now up 5.4% year over year, which is down from the previous report of 5.9%. So we're seeing prices start to decelerate there, but still moving higher. And FHFA, which doesn't include cash or jumbo buyers, so typically lower priced homes, showed prices fell 0.1% for the month, up 5.1% year over year, which is down from 5.7%. So still showing that year over year prices have increased, but month over month, a small, small decrease there and is definitely decelerating from the pace that it was. And lastly here, PCE, which is the personal consumption expenditures inflation data for the month of July, coming in pretty close to expectations, but a little bit in our favor. For the month only rose 0.155%, slightly below the 2%— or excuse me, the 0.2% that was expected. Year-over-year remained at 2.5%, which is lower than 2.6% expected. And the core reading, which strips out food and energy prices— this is the one that the Federal Reserve is really looking to— that only rose 0.161%, also below the 0.2% that was expected. And year-over-year core remained at 2.6%. So again, these are good signals for the Federal Reserve. Low inflation and high unemployment rates are the signals they need to feel confident in lowering the federal funds rate, lowering that interest rate, and potentially moving faster or bigger amounts than we were hoping. As always, hopefully this is helpful. Hope you have a great 3-day weekend. We'll see you next time. Take care.
