Rates, builder sentiment, household debt strain, job growth, jobless claims, and existing home sales

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates moving slightly sideways here week over week, up from 7.02% last week to 7.04% this week. So pretty similar, not a whole lot of volatility this week, which is nice. So any stability, any kind of drop in rates is great. So right now it just seems like we're holding steady. We want to also remind you that next week is Thanksgiving on Thursday. So that is a federal holiday, no closings. I wouldn't really plan on too many for Friday unless you absolutely have to, seeing a lot of companies might either be closed or recording time might be messed up with that. So just plan accordingly. We will not be doing our weekly market update next week. Still be available if you need me. But obviously, I'm sure a lot of people are going to be staying at home with families. So again, no market update and no closings next Thursday. As far as our weekly mortgage tip, I want to talk about how to get your clients approved and closed faster. You might have heard one of the phrases that we often talk about is that time kills deals. You might remember a few years ago when it was taking 2 months, you know, a month or 2 to get an appraisal back, especially on VA. And the longer things went, the harder it was to keep them together. There's emotions involved, people get frustrated, people get bored. So to try and get things— clients moved as quickly as possible through the process is going to ultimately help your conversion rates. And personally, I found one of the best ways to do this, and my internal little secret, is starting with the referral process. If you're getting your clients referred over to a lender to get pre-approved, to an insurance agent, whatever it may be, the 3 forms you really have to do that are telling somebody over email, giving contact information on the phone or in person, or through text. So when I'm reaching out to a client, I find the number 1 highest conversion rate way to do that is a group text introduction. If it's through an email, very low response rate. Phone call can be a little intrusive and you're trying to get them at the right time. But a group text introduction has a few benefits to it. First one is they know that you're introducing, so there's automatically some implied trust there. Second piece is there's accountability, both for me as the lender and for the client, that if I respond back and they don't, the client doesn't, they know that you're also on that text and you see that they have been ghosting me. And then the last piece of it is it makes it a lot easier for the phone call. My personal approach to this is I'm going to send over a text. I also send over a video that they can watch and know exactly what to expect on our first phone call. You may have seen that the group video for this, the group text template, if you want to use it, is in the email down below. But I've just again found this over and over and over again is a way to help get people pre-approved much quicker, be comfortable reaching out, and move through that process so you can get them closed at the end of the day. So try it out, great response rate from it. And again, you'll see if you're working with me that I'm going to immediately respond back on that one, get a date set for a call, and be able to start moving them through the process. Next up, as far as information this week, the NAHB Builder Sentiment Index for November overall rose 3 points to 46, still into the contraction zone. Anything 50, you know, 50 is neutral. So below that is contraction, above 50 signals expansion. And this is a second report in a row that did see an increase after months and months of declines. This also stronger than estimates than anticipating a 1-point drop for the month. So coming in 3 points stronger is quite a bit better. One of the biggest reasons for that is because of the election. The NAHB chairman has expressed optimism that because of the Republican control of the presidency, the House, and the Senate, that they're going to likely see less regulations moving forward, making it easier to build. and leading to more apartments and to more single-family homes in the coming years. Within the report, current sales rose 2 points to 49, almost breaking into expansion. Future expectations rose 7 points to 64, the highest point in the report, and buyer traffic rose 3 points to 32. Next up, the New York Fed survey showed about 14% of households are unable to stay current on their debt obligations. This hasn't happened since about March to April of 2020, and almost 40% of the people who responded in the survey said that their situation is worse this year than it was last year. Now, this is in contrast to the Fed Chair Powell saying recently that they see strength in the economy and are not really in a hurry to lower interest rates. And you also add in information— Walmart came out recently and said that 75% of their total market share was to households that made over $100,000 a year in income. And this is going into continued weakness in the economy, showing that even those in wealthier, wealthier households are continuing to trade down for less expensive things just because costs continue to go up. Next up, the BLS's quarterly census data showed a big drop in wage growth that's been reported year over year. Now, the monthly BLS jobs reports that come out these only take into account a small survey sample size of about 700,000 businesses and are using modeling to determine how that affects the overall economy. And that census— but the census data looks at about 12 million businesses, taking into account about 95% of all businesses. So this doesn't use a lot of modeling. This is just the actual data. And with that, the original BLS jobs report showed about 2.5 million job gains from Q2 2023 to Q2 2024. The census data that came out showed only about half of that at 1.246 million jobs, meaning that the monthly data that came out with the BLS headline reports is likely overstating job growth by about 100,000 a month. And this is even after the two different monthly revisions that happened with those BLS reports. So interesting again to see all all of this data pointing to more and more weakness that the Fed hasn't really acknowledged yet. So seeing if the Fed comes out and acknowledges this report and takes it into account with their rate cut expectations. Next up, we also saw another indication of weakness here with the initial jobless claims. Now, initial job claims fell 6,213, which on its own is actually a fairly low number, but continuing claims is more of the concerning number here. Rising $36,000 to $1.9 million. And this is the highest that we've seen in about 3 years. While initial claims again have remained relatively low, the continuing claims continuing to rise means that those who've been laid off or those who have left work are having a harder time finding work, going back to work. And remember that this benefit only lasts for 26 weeks. So as people fall off, they're no longer going to be counted in that when whether or not they go back to work. And similarly with the unemployment rate, those who have not been on or aren't on that anymore typically aren't counted. So things like the continuing claims and the unemployment rate might be a little bit understated because they're not taking those into account that are no longer receiving those benefits. And lastly here, existing home sales for October rose 3.4%, which is stronger than estimates. To an annualized pace of 3.96 million home sales per year. So while stronger an estimate, existing sales for October were likely helped by seeing lower interest rates in September. Now, since we've seen rates move up in October, November, that's likely going to make an impact in existing home sales for the month of November and for December for this year. So we'll see how those shake out. As always, hopefully this is helpful for you. Again, remember, we will not be doing a market update next week. Hope you have a fantastic Thanksgiving. We'll see you next time. Take care.