Rates, DACA on FHA, appreciation, new home and pending sales, tariffs, and PCE inflation

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Starting off, interest rates, fairly steady week over week, 6.72% last week to 6.79% this week, so slightly higher. But looking at the market today, we may be able to get back some of that loss that we've seen. And leave us pretty flat for the week. Starting off, one of the things for the mortgage tip this week I did want to let you know on is news is that FHA recently just announced that they will no longer be able to have eligibility for non-permanent resident aliens. So this specifically also includes anyone who's under the DACA program. And so unless somebody is either a US citizen or is a permanent resident alien, somebody with a green card, they will not be eligible for FHA loans. As of May 25th, 2025. So that is a brand new change. That's for case numbers assigned. So if somebody is under process, they already have an FHA case number assigned, they can still close after that, but they would not be able to start a new loan and get an FHA case number assignment after that date as a non-permanent resident alien. This is brand new information that's come out this week. So far, it does not affect Fannie Mae and Freddie Mac. So for conventional loans, still currently eligible, but there is concern that this may factor into the flow into those programs in the coming days, weeks, or months. So for the time being, make sure to plan accordingly. I know this definitely affects some, some agents, some businesses more than others. And as a result of it as well, there may be more non-government-backed options who are starting to fill the gap for those clients who are here, nonpermanent resident alien, have work authorization, or under the DACA program, but no longer eligible for FHA. Next, home price appreciation from Case-Shiller and FHFA came out for the month of January, up 0.6% and 0.2% respectively, showing home prices continually staying strong. Case-Shiller is up 0.6% on a seasonally adjusted basis. The raw data is up 0.1%. but always a slower time for housing in the winter months. And so it's seasonally adjusted every year. Year over year, prices rose from 4 to 4.1 on Case-Shiller, and then on FHFA rose from 4.7 to 4.8% year over year. So still seeing between 4 and 5% appreciation on homes. New home sales, though, those are gonna be sales on brand new homes, not existing. Those rose 1.8% in February with an upward revision in January as well of about 7,000. Sales currently are up 5.1% year over year. With that, there are 500,000 new homes that were available for sale at the end of February, which is about an 8.9-month supply, slightly below the 9-month from the previous report, but of those, there were only 119,000 homes that were actually completed and available to be able to move into, with 102,000 not yet even started, and the remainder currently under construction. Looking at the 119,000 actually available now translates to a true supply of about 1.7 million currently available— excuse me, 1.7 months of available current supply. Pending home sales, so signed contracts for home sales, rose 2% in February, above the 1.5% gain that was expected. Sales are down 3.6% year over year, which is a decent improvement from the previous report that had it down year over year at 5.2%. in January. So seeing a little bit of an uptick there. This again measures signed contracts for the month of February, and this is before we saw a decent rate improvement for March. So as we look forward to March's existing home sales or pending home sales report that'll come out next month, most likely going to see a bump in that as well as a result of those lower rates. Something else you may have already been hearing about this week is a new tariff that was announced, a 25% tariff on imported cars. So because of this, there's a lot of moving parts and it's tough to know exactly how this is going to affect numbers and economic reports, which are going to directly impact the mortgage rates. So the cost addition, just additional cost benefit part of this, especially the longer it goes, could be an inflationary factor which drives up cost, drives up spending there. But if those costs are going to be destroying demand or shifting demand away from imported cars, into more domestic, that could actually lead to lower inflationary numbers because of the lower cost or lower amount of total spending. So again, tough to be able to say which way it goes right now, but because it was such a big number, want to be able to keep that on your radar moving forward. And lastly here, the February PCE, personal consumption expenditure inflation report, which is the Federal Reserve's favorite measure of inflation, came in showing up 3% for the month on the headline number. 2.5% year over year, both of those coming in as expected. However, the core rate, which strips out food and energy prices and arguably what the Federal Reserve looks at more than the headline number, that rose from 2.7% to 2.8%, with— excuse me, rose 0.4% for the month. And then the year over year number rose from 2.7% to 2.8%, which was both of those numbers 0.1% higher than what was expected. The more concerning factor on this is when you look at the more recent trend, we are seeing an increasing amount of inflation on the core number. So year over year is at 2.8%, the 6-month average is at 3%, and the 3-month average is at 3.5%, showing that that rate of inflation is continuing to move higher in the more recent months. So that is a bit of a concerning trend here, because if we're not getting a handle on those inflation numbers, the Federal Reserve is going to keep their rates higher for longer, or maybe even take other measures into trying to get that back under control. So hopefully we'll see a turnaround in things, but there's so many moving pieces right now, tough to be able to know. So as always, hope to keep you on top of it. Let me know if there are any topics you'd like me to cover moving forward so that you are in the know, and have a fantastic weekend. We'll see you next time. Mm-hmm.