Rates, Mortgage Bond Buying, Dec Home Sales, Nov Rent Report, CPI Inflation, Retail Sales, BLS Jobs

Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Quick reminder as well that Monday is a holiday, so no fundings. Still be available if you need anything, but not a day we're going to be able to close. As far as interest rates getting a drop here, a lot of people have seen from last week to this week 6.21% last Friday to now 6.07%. Be interesting to see if we can hold onto that. There's definitely some resistance against it, but so far we've been getting some nice gains, helping people save some money on rates for refinancing or for purchasing. As far as our weekly mortgage tip, wanting to talk about business purpose real estate loans. Now you probably already know, been doing commercial lending for over about a year now, and some of those loans are gonna be for businesses. Who want to go from renting their space to owning it, or if they're already owning a space, looking at expanding. And so one of the most questions I get on this is, what does it look like for a new business, a startup, to get financing to buy a building? The short answer is nearly impossible. Most of the way that the lending side is set up on the commercial end is to be able to get lending for businesses that have an established track record. So 2, typically 3 years, we're gonna look at those taxes, seeing an increase in income that can support that payment on a new place. Obviously we take out their current rental expense because we know that's gonna be going away. But if you or someone you know is looking at starting a brand new business and looking at buying real estate as part of that, it's very, very difficult to do, usually reserved specifically for cases where you still got significant money for a down payment, you've already been in the industry working before and usually in some kind of medical. So a dentist, a doctor opening up their own practice. Those are some of the rare exceptions there. For the rest of them, usually ends up being best to rent for a while, establish a couple of years, 2, 3 years of track record, and then being able to get a purchase loan from there. If you have any questions on that or any other commercial investment scenarios, let me know. Happy to help. Next, as far as the interest rates we touched on here, that was a big surprise announcement from President Trump last week. That led to the announcement of Fannie Mae and Freddie Mac saying they're— he's commanding them or ordering them to order $200 billion in mortgage bonds. Now, mortgage rates are impacted by mortgage bonds in the supply and demand section. So this, this announcement, even though it hasn't really started yet in full, there's maybe been about $3 billion or so purchased in January. And this will continue to roll out. There hasn't been an official schedule yet. Just the announcement has led to that decrease of initially about a quarter of a percent in interest rates as a result. So be interesting to see if they announce an official schedule. What does that look like? How long of a period are they going to be buying? And that could further impact rates as well. Next, new and existing home sales data for December both beat out estimates. New sales, which are signed contracts for brand new homes, came in up 19% year over year at an annualized pace of 737,000, the highest pace in 3 years. Existing home sales were expected to be up 2% for the month but came in much higher at 5.1%, also the highest level in 3 years. Next, you've got Coatality's November rent report showing single-family rents up and multifamily rents down. So single-family new rents, not for renewals, rose 1.1% year over year in November, which is the slowest pace in 15 years. Meanwhile, new multifamily rents have been negative. Renewals are still up a little bit, about 3%, but when you combine the two, they show the combined multifamily rents up year over year only 1%. CPI inflation for December, which is the Consumer Price Index, rose 0.31%, pretty much matching estimates. No surprises here. Year over year, it's up to 2.68%, while the core rate, stripping out food and energy prices, rose 0.24% to remain at 2.6% year over year. Wholesale inflation also came in, the Producer Price Index report for October and November after we had the delay from the government shutdowns showing them just up 0.2%. But September was revised higher. We had the core reading for November was flat. The core for September was revised up from 3 points, revised up from 2.9% to 3.6%. And then the headline number for September was revised up from 2.78% to 3%. And next, retail sales for November showed spending up 0.6% for the holidays. This was stronger than expectations here, but the core reading rose just 0.4%, which is matching estimates and is the more important of those two. Lastly here, the BLS jobs report for December came in showing 50,000 jobs created. October and November were revised lower, though, by a combined 76,000. So taking the entire report, we ending up with a net negative of about 26,000 jobs. October alone would be revised down by 68,000 jobs from the initial headline number. All of the job gains that were reported in the headline came from healthcare, social assistance, leisure, and hospitality. And the household survey component of the BLS jobs report showed 232,000 jobs created with some addition to the workforce, but only about 50,000. And so the most of this is likely due to seasonal workers. And unemployment rate as a result dropped from 4.5 to 4.4%. So always, hopefully this is helpful. Let me know if there's anything I can do to help. Have a great long weekend. We'll see you next time. Take care.