In this weekly market update, Jordan Keck provides a concise briefing on several key economic indicators and mortgage-related topics. He begins with a reminder about the upcoming Labor Day holiday and its impact on closing timelines. Keck notes a modest decline in average mortgage rates to 6.46%, the first dip below 6.5% since early August, and offers practical strategies to ensure seller‑credit amounts are fully utilized at closing, such as adding a home warranty or buying down the rate. He then reports on Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole symposium, confirming an anticipated rate cut at the September 18 meeting and outlining market expectations for the size and probability of the cut. Keck reviews July inflation data, highlighting a PPI increase of only 0.1% (year‑over‑year 2.2%) and a CPI rise of 0.155% (year‑over‑year 2.9%), both beating expectations. Retail sales for July rose 1% month‑over‑month, driven largely by auto and gasoline sales. He discusses a major revision from the Bureau of Labor Statistics that reduced reported job growth by 818,000 for the March‑to‑March 2023‑24 period, casting doubt on the reliability of headline employment numbers. Finally, Keck examines July existing home sales, which increased 1.3% month‑over‑month to an annualized 3.95 million units, with a slight rise in average days on market to 24, and considers how recent rate declines may influence future sales activity. The video concludes with a call to subscribe and a weekend well‑wish.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Quick reminder as well for holiday coming up, we have Labor Day Monday, September 2nd. That is the first business day after the end of the month here, so we have all of next week and then that first Monday after next week is a federal holiday. So just keep that in mind as far as closing dates. Right of rescission for refinances and CD timeframes. So keep that in mind. As far as interest rates go, moving down a little bit lower this week for some good news in the market, down from 6.56% average last week to 6.46%, down below 6.5% for the first time since we got that initial spike about, probably about a month ago, beginning of August. And so long term, definitely heading in the right direction here. With more weekly mortgage tip, wanted to talk about how to avoid leaving extra seller credit on table. So something I've run across a few times here recently, pardon me, and want to make sure that you know what you can do to make sure that you're not leaving extra money there. So let's say you asked for $10,000 in total seller credit. Of course, closing costs are an estimate upfront, there's a lot of things that can move, homeowner's insurance numbers can change, appraisal might need a re-inspection on it, you know, the day that we close can change, they might not have locked in upfront, they might want to change the rate, Maybe we negotiated and got more credit later on. So as that number moves, one of the most helpful things you can do is be talking with me ahead of time about, are we expecting to get more credit? Are there repairs that might end up needing more credit there? Because the last thing you want is if you have $10,000 of agreed-on seller credit, but only $9,000 in closing costs, what happens is that extra $1,000 gets left on the table and it benefits the seller. Not the buyer, even though it was agreed to. So a few things we can do as we get towards closing. Good lender is going to make sure they're looking at those numbers and getting as close as possible to using it all up, but not using up extra, not having extra money come out of pocket. So if you only got a couple hundred dollars, one of my favorite tricks is adding a home warranty last minute. It's a way you basically increasing your closing costs so that way you can use the seller credit to pay pay for a benefit to the buyer, which otherwise would have gone unused. If you know there's a significant amount available and you have a little bit of time, you can also look at buying down the interest rate, whether that's a permanent rate buydown, or if you've got a big amount, you can do a 2:1 buydown. And of course, some of the last results are revising the contract, lowering the purchase price, and also lowering the seller credit so that you can use it all, but you get the benefit in the lower price. So again, the sooner that we know we have extra, the better, so that we have time for adjusting around these things. But having that conversation with me, with whoever the lender is on the transaction, when there is credit involved, is the best way to go and make sure we can use it all before we get to closing. Next up here, we got the president, the Fed President Jerome Powell, speaking at the Jackson Hole Symposium right now. And that's pretty much this week. They're all Fed leaders, or essentially federal bank leaders from around the world meeting. And he confirmed— he didn't just imply, he confirmed that the Federal Reserve would cut interest rates at their next meeting, September 18th. Now, he didn't confirm the exact amount, so we know it's going to be at least a quarter of a percent, and the market's currently pricing in about a 33% chance of a 50 basis point or half a percent cut. In the Federal Reserve rates. Jerome Powell did mention that it was going to be data dependent. And so between now and then, this is going to be things like the unemployment rate. This is going to be jobs numbers and this is going to be inflation data. With that, the market is also pricing in about a 73% chance that by the end of the year we have a total of 100 basis points or a 1% drop in the federal funds rate. Remember, just because the market's pricing these in doesn't mean it's actually going to happen. And one reminder is that mortgage rates are not directly impacted by the Federal Reserve cutting rates. What happens is mortgage rates have actually even gotten better today because Jerome Powell announced there would be a cut. So when it actually cuts, that's already been priced into mortgage rates. Mortgage rates are going to trade the news and the expectations. When the reality comes out, if it's in line with expectations, there's no change. The things that are going to be directly impacted are home equity lines of credit rates, car loans, and credit cards. Those should be going down in direct proportion with the Federal Reserve funds rate once they cut those rates. Next up here, we got some inflation from the PPI and CPI, so wholesale inflation and consumer inflation for the month of July. And these had come in a little earlier, so the Federal Reserve is looking at these numbers as as well, in part in their decision to cut rates. So PPI wholesale inflation came in only up 0.1%, below the 0.2% that was expected. Year over year fell from 2.7% to 2.2%, which is below the 2.3% expected. And the core rate came in flat, which also was below expectations of 0.2% for an increase. Year over year fell to 2.4% from the 2.7% expected. So really good signs there on the wholesale side because that usually ends up translating to consumer. And consumer inflation CPI, of course, came in at 0.155, a little bit below, about half a— 0.05% below the 0.2 that was expected. Year over year decreased from 3 to 2.9, and core rate increased 0.165, also below the 0.2% expectations. So pretty decent-sized beat on the wholesale inflation, moderate beat on the consumer side, but both in the right direction. Better than expectations. First, retail sales here. This is also something that the Fed is going to be looking at. They were up 1% in July, which is a decent amount above expectations of only a 0.3% increase. Previous month was revised lower. It was zero— no, it was just flat month over month— was revised to a negative 0.2%. So that does help temper it a little bit where you're seeing the increase going from a negative 2%. So it doesn't, you know, Obviously the comparison month over month different than it would have been, and it also made last month weaker. A big portion of what contributed to the unexpected rise were auto sales and gas. So without those two components, the rise would only be about 0.4% month over month, pretty close to where the estimates were at. Next up here, the BLS, the Bureau of Labor Statistics. We've been following them as far as their monthly jobs report numbers. They released their annual benchmark revisions showing that they overstated job growth by 818,000 between March of '23 and March of '24. This is a massive miss, averaging almost 70,000 jobs per month higher than had actually been happening. And this is after they've already done initial revisions of about 300,000 during that time. So over 1.1 million jobs lower than what was initially stated at their first reports when they came out. You know, BLS jobs reports are market moving. So the market for interest rates, they look at these reports and they react. And so does the Federal Reserve when these reports come out. So just scary to think about how far off those numbers are. And I mean, we still don't even know, can we trust these numbers now knowing that they were so far overstated? And often it's not the revisions that are market moving, it's the initial headline numbers. So definitely something that I hope the market start taking with a massive grain of salt when those numbers come out, knowing they're likely going to get revised significantly lower. And again, between the initial revisions and these revisions, over 100,000 jobs a month revised lower than the headline numbers. Next up, in the last piece here, existing home sales for July did rise 1.3% month over month to an annualized pace of $3.95 million. Year-over-year sales are now down just 2.5%. And the report does take into account homes closed in July. So for July, July homes that were closed, those are people who are going to be shopping in May and June when interest rates were higher. Since we have seen rates drop a little bit here, be interesting to watch existing home sales in the coming months and see if those lower rates have made an impact on it. Is historically they usually do. And of course, going into later months here, if rates continue to decline, is that going to continue to translate into higher existing home sales amounts? Time will tell. And within the report, average days on market was 24, up just a couple of days from 22 in June, after that had been trending significantly lower, up as high as I think about 30 or 33 days within the last 6 to 8 months there. So A little bit higher after trending lower, but still pretty good overall here. As always, hopefully this is helpful. Feel free to pass it along to someone you may find, uh, may find it helpful. Hit the subscribe button below for them if they haven't already been signed up to be able to get this monthly. And hope you have a fantastic weekend. We'll see you next time. Take care.
