In this weekly market update, Jordan Keck reports that mortgage rates edged higher to 6.68% as inflation and consumer spending remain elevated, limiting the Federal Reserve’s ability to cut rates. He announces new commercial lending services, highlighting SBA owner‑occupied loans, large‑ticket HUD financing, and a brokered‑bank approach for hard‑to‑place deals. The CoreLogic Rental Index shows rents up 2.4% year‑over‑year, a slowdown from the prior 2.8% reading, and Keck notes the lag between rent data and CPI/PCE inflation measures. Builder sentiment, measured by the NAHB Housing Index, rose to 43—the first increase in six months—still below the 50 breakeven point. September retail sales exceeded expectations, with overall sales up 0.4% and core retail (GDP‑linked) up 0.6%, indicating continued consumer spending pressure on mortgage rates. Initial jobless claims fell to 241,000 but may be distorted by hurricanes and a holiday, while continuing claims rose modestly. Finally, the Mortgage Bankers Association reported a 26% drop in refinance applications and a 7% decline in purchase applications, though both remain up year‑over‑year, with speculation that election outcomes and potential first‑time‑buyer grants could affect future demand. Keck closes with a friendly sign‑off.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates ticking up a little higher this week. 6.62% last week, up to 6.68% this week. Seeing some movements up, some movements down, but overall the hot trend is higher just due to some stronger reports we're going to get into a little bit today here. Ultimately, we want to see lower levels of inflation, lower levels of consumer spending, and higher levels of unemployment and jobless claims in order for the Federal Reserve to continue justifying lowering the federal funds rate. And we're not seeing that data yet. So as a result of that, markets are responding in anticipation of the Federal Reserve not going to be lowering the rates into the future. But before jumping into that really exciting announcement, Effective this week here, we are now starting to offer commercial lending. So whether it's purchasing, whether it's refinancing, if you have clients or you're looking at opportunities, love to be able to help with that. Whether you're looking at owner-occupied, 51% or more, some great options with SBA commercial lending. If you have larger deals or looking for long-term fixed rate, great low rates that are about $10 million and above, HUD financing is incredible. We're actually connected with the number one HUD lender in the country right now, and there's some fantastic opportunities as well. If you've got unique properties, B-paper, bank turndowns, anything like that, as a commercial broker, we can go through dozens and dozens of banks for the same deal at the same time, find somebody who has an appetite for it. So if you're getting turndowns from traditional banks or credit unions, you have somebody who needs to refinance out of a high rate or they're just not going to get their term renewed at their current bank, please let me know. I would love to be able to take a look at that and help you out. Next up here, the CoreLogic Rental Index for August. This is going to show rents up 2.4% year over year. This is a reduction from the previous report that we saw 2.8%, showing that rates are still continuing to go up but just moderating pretty significantly from the highs that we saw a few years ago. PCI, CPI, and PCE, personal consumption expenditures, and consumer price index inflation reports, they both take into account rents currently showing up 4.85%, nearly double the amounts that we're actually seeing here year over year. And so a big part of that is due to the lag effect. So hopefully over time, that will continually moderate to the reality of where rents are at and lower those inflation numbers for us. Next up, the NAHB Housing Index. This is essentially judging the optimism of builders throughout the country. That index rose 2 points in October to 43. Anything above 50 signals expansion, anything below 50 signals contraction. So we're still in a pessimistic zone but gaining ground on getting that breakeven point in 50. This is the first improvement in about 6 months. 50 again being balanced between growth and decline. Within the report, current sales rose 2 points to 47, future expectations rose 4 points to 57, and buyer traffic rose 2 points to 29. Next up, retail sales for the month of September rose 0.4%, a little bit stronger than estimates of 0.3%. Within that, the core retail sales that gets factored into the GDP report, that actually rose 0.6%. 7%, which is much hotter than the 0.3% expected. This showing that consumers are continuing to spend pretty strongly, even if a good portion of that is still being financed and put on credit, which is putting pressure on mortgage rates. Initial jobless claims fell 19,000 for the week to 241,000 first-time unemployment benefit claims, but this may be distorted quite a bit due to the hurricanes with people either filing more claims or not being able to file claims as a result of, you know, just not being able to get access. We also had a holiday in there with Columbus Day on Monday. And so again, report taken with a grain of salt. There's usually a lot of distortions that can be happening there. Continuing claims rose 9,000 to 1.867 million in total. And lastly here, the Mortgage Bankers Association reported refinance applications dropped 26% last week. And purchase applications fell 7%, mostly in response to the rise in interest rates. Refinances are still up 111% year over year, and purchases are up 7% year over year. This is speculation that there are many potential buyers who are still on the sidelines just waiting for the results of the election. It'll be interesting to see once that happens if that releases some of that built-up demand, or or if they continue to wait and push down the road for the potential of first-time homebuyer grants, one of the things being talked about. So as always, hopefully this is helpful for you. Hopefully you have a fantastic weekend. We'll see you next time. Take care.
