Rates, Fed Hold Steady, Next Fed Chair Nomination, Gov Shutdown, PPI inflation, and Home Price Gains

Good morning and happy Friday. Jordan Keck here, your Lender Buddy, with your weekly market update. Kicking off with interest rates, pretty unchanged week over week, moving from 6.19% to 6.16% week over week. We've seen some days be a little bit better, some a little bit worse, but overall still fairly steady for from that interest rate standpoint. As far as weekly mortgage tip, wanting to talk about another new product line I'm starting to be able to be offering, and those are home equity loans and home equity lines of credit, not only for single-family primary residence but also for investment properties. We can do adjustable, we can do fixed rate, 10-year interest only followed by 20-year fixed, or we can do a full 30-year fixed rate loan option if somebody's looking for it. Depending on credit score in the scenario for primary can sometimes go as high as 95% combined loan-to-value. So if you have a client who wants to keep a low interest rate on their first mortgage, but pull some cash out, use it for a down payment on the next place, maybe some renovations, home equity line of credit can be a great option for that. Happy to chat through specific scenarios if you like. But again, another great option here to provide for you. And so there's really not a reason to call anyone else first. Talk to me first. And if I can't do it, chances are it can't be done. Next up, the Federal Reserve had their meeting and announced that they are not changing interest rates for this month. This is pretty much exactly as expected, and the Fed rate remains unchanged at 3.625%. So no surprises. The Fed did upgrade their view on the economy, and they downgraded their fears on the labor market, likely as a result of looking at lower unemployment numbers and then stronger GDP growth in the most recent reports. A little bit of a caveat on the unemployment numbers. We are seeing lower continuing unemployment claims, but a portion of that could be due to hiring, a portion of that might be due to an expiration of benefits. So just because there's fewer people on continuing claims, it doesn't mean that they've found jobs. It might just mean that their benefits have expired after 6 months. Next up, we have President Trump announced his official nomination for the next Fed chair. Which is Kevin Warsh. Now, Warsh is still a proponent for cutting rates just like the other two as well, but he is the least aggressive about it in view of the market. And so comparing to the other two potentials, once this was announced, the market did react accordingly to that, not favorable, because they thought if one of the other people was selected, they would be more likely to cut rates faster, even though Kevin Warsh is still a proponent of cutting rates faster than we've been doing. So as you've heard me say before, the market doesn't respond to the reality. They respond to the adjustment in their expectations. Next up, we have the government voted to avoid a partial shutdown here. Seems like just yesterday we were running into the longest government shutdown in history. Now we are talking about shutdowns again. So here we are. The agreement came just within 24 hours of a partial government shutdown. That would have happened, and it would fund all the government except for the Department of Homeland Security through September. The Department of Homeland Security would operate on a 2-week stopgap bill, buying time to negotiate changes. And there's going to be a vote in the Senate later today and in the House on likely Monday to be able to officially keep the government fully open. Next, the PPI, Producer Price Index, wholesale inflation report came in for December, up 0.5%. More than double the estimates of 0.2% that was expected. Year over year, the number remained at 3%, but was expected to decline to 2.7%. And then core PPI, which strips out food and energy prices, rose 0.7%. It's quite a bit higher than the 0.2% that was expected, and year over year increased from 3.1% to 3.3%, when it was expected to also drop to that 2.7%. Most of the rise surprisingly came from machinery and equipment wholesale margins, Since good prices were flat, meaning in the past, if we've seen inflation amounts rise, we've had to wonder, are producers going to either pass along those costs to consumer inflation or are they going to take the hit? It seems like now they're finally being able to take back some of that margin, which we may unfortunately see in consumer inflation numbers moving forward. And lastly here, Case-Shiller and FHFA reported home prices up 0.4% and 0.6% respectively for November. Case-Shiller also reported this after a 0.4% gain in October, both months coming in above expectations, likely as a result of lower mortgage rates driving some of that demand. Year-over-year prices are up 1.4% for Case-Shiller and 1.9% for FHFA. If rates continue to come down in 2026, we're likely going to continue to see buyer activity stronger as a result, meaning higher amounts of home price gains and then also higher under contract and existing home sales and new home sales numbers. As always, hopefully this is helpful for you. Feel free to pass it along if you know anyone who may benefit. They can subscribe. And as always, here to help with any clients I can take care of for you. Have a great weekend. We'll see you next time. Take care.