Rates, job openings, job cuts, job creations, unemployment rate, mortgage rate forecasts,and tariffs

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Quick note that I will be out of the office hitting President's Club down in Mexico next week from Wednesday through Sunday. So during that time, my team is amazing. They'll be able to be covering everything including new client applications, applications, pre-approvals, updates on current files, whatever is needed. So during that time, please contact my right-hand man Tyler at 971-762-3475 or tyler@findtheadvantage.com. So contact information will be in the email, but again, I will be out Wednesday through Sunday and my team will have everything fully covered during that time. As far as interest rates, get some great news this week going down almost a full quarter of a percent from 6.79% to 6.55%. So huge drop there, which is amazing, and hopefully moving in that continued direction for us. As far as our mortgage tip this week, wanted to talk about property conditions, especially because there's a situation that came up. There was a first-time home buyer looking in an area in a very tough price range for a home that was listed as cash or conventional. There's a lot of misinformation around what property conditions are going to be needed for an FHA or VA loan and how strict those may be. The ones that are the most common are chipping and peeling paint on the outside of a home, which usually conventional is fine with, but FHA and VA often want that to be taken care of. One of the things I want to bring up, whether you're a buyer's agent, whether you're a listing agent on a transaction, is that Yes, those may be things that come up from an appraiser saying that need to be done before closing, but it's not saying the home cannot go FHA or cannot go VA. So especially if you're helping represent a buyer in a very tight price range, or you're representing a seller and they're looking at a potentially strong offer, increasing your buyer pool, might be worth it to go ahead and have those options available, but then just work through what happens if and when those repairs do get called out. Buy an appraiser? Is that something that's going to be negotiated at the time? Is it something that you can address currently? Is it something the buyer is willing or able to pay for? You know, is there a limit on how much the costs are going to go into that if they come up? All of those can be things that if you address them ahead of time, you can suddenly now increase the amount of properties your buyer might be able to get when you just address those in a smart way. So again, I've seen this done very, very well. I've seen this done very poorly, but just trying to get creative and get clients into situations that otherwise wouldn't have been able to get into. As far as data from this week, we got the February JOLTS job openings report. Showed that job openings fell from 7.57 million to below, or it fell to 5.75, 5.7.5 million below the 7.63 million that was expected. The previous month was 7.76, so this is a pretty decent drop lower than those expectations and in previous months. The quits rate remained at 2% after being revised lower from 2.1 in the previous report. Hiring stayed at 3.4% with negative revisions to every month in 2024 except for July. Next, Fannie Mae is forecasting mortgage rates to continue declining in 2025. 2025, ending the year at 6.3%. We're pretty close to that right now on it, so it doesn't sound like huge drops, but continuing to move in that direction. They also believe the lower rates will offset softer economic activity and increasing the home sales estimates from 4.9 million to 4.95 million in 2025, an increase over the year of 50,000 homes for the country. Now, their inflation estimate also increased from 2.8% for the year to 3.2% as a result of the expected economic impact of tariffs causing higher prices, although it is partially offset by slower economic growth from the demand destruction of those higher prices. March's ADP employment report came in hot at 155,000 jobs created versus the 105,000 to 120,000 range that was expected. There was a small 7,000 positive revision to February as well, so just adding to strength of this report coming in really, really strong. The income growth year over year for job stayers was at 4.6%, and for job changers was at 6.5%, meaning the increase in your salary you get or your income from changing jobs in the year. Now, the spread between those two is the lowest on record, meaning that there's a lot less of a premium for changing jobs than there used to be, which partially helps explain the low quit rate. There's not as much incentive changing jobs, likely not going to go through the hassle of that process. And we saw this number as high as I want to say over 20% in some cases, or very close to it in the middle of COVID when employers were desperate for workers, they could demand a premium for changing those jobs. Additional tariffs were announced this week, which triggered a bond market rally, which is good for mortgage rates. And the administration said that they were planning to use the revenue from these tariffs to reduce the national debt deficit. So they may be here for longer than initially expected. At first, there was a lot of speculation about whether these tariffs would be temporary, whether they would be more around changing behaviors or what was the incentive. And now very just openly addressing them as a tool to be able to pay down that deficit. So again, it's very common to talk about reducing it, but actually reducing spending or increasing revenue to pay it down is painful. It's not a great political move, and so it's not a very popular thing to do for that reason. But now that could be the beginning of what we're really seeing with these tariffs. Next, the Challenger job cut report showed 275,000 job cuts in March, which is the third highest number on record. Similar to the February number though, the vast majority of them were from DOJ cuts, with this month coming in 217,000 of those from those efforts, so the headline number is to be taken with a pretty large grain of salt. Within the report, companies' plans for hiring fell to just 13,000, with Q1 hiring plans being the lowest in the last 13 years since 2012. And lastly here, the Bureau of Labor Statistics BLS jobs report showed 228,000 jobs created for the month of March, which was quite a bit stronger than the 140,000 estimate. Within that, though, there were negative revisions to the previous two months. January revised lower by 14,000 and February revised lower by 34,000. So the original beat of estimates of 88,000 really comes down to about 40,000 over when you take those into account. The household survey component of the report showed 201,000 job gains, but the labor force also increased 232,000. So as a result of that imbalance, yes, there were job gains, but not as many as there were new people in the workforce. The unemployment rate rose from 4.1% to 4.2%, but just barely. It was initially coming in at 4.152%, which gets rounded up to 4.2%. As always, hopefully this is helpful. Again, I will be out next week, Wednesday through Sunday, so there'll be no market update next Friday. I will see you the week after. Have a great weekend. Take care.