In this weekly market update, lender Jordan Keck reviews recent movements in mortgage rates, noting a slight uptick to 6.38% and explaining that post‑Fed‑cut dynamics and current data (including PCE) are keeping rates from falling. He offers a practical tip on timing closings to minimize or maximize closing costs, highlighting the interest‑collection difference between early‑month and end‑month closings. Keck then walks through the latest housing data: August new‑home sales jumped 20% to an annualized 800,000 units, beating forecasts, while existing‑home sales were flat but outperformed expectations. He reports that mortgage applications were flat week‑over‑week, with purchases unchanged and refinances up 1%, maintaining a 30% increase from two weeks prior. Jobless claims fell, with initial claims at 218,000 and continuing claims steady at 1.92 million, a factor that pressures the Fed and influences rate expectations. The final Q2 GDP revision showed 3.8% annualized growth, above the 3.3% estimate, signaling a robust economy that reduces the need for rate cuts. Finally, August PCE inflation came in slightly above forecasts (0.3% MoM, 2.7% YoY) with core PCE unchanged at 2.9% YoY, again suggesting limited upside for rate reductions. Keck concludes with a brief outlook and a weekend sign‑off.
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Good morning. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates ticked up slightly last week from 6.35, up a little bit from the week before that as well, to 6.38. So just a little change here, but seems like post-Fed rate cut, rates are not wanting to move down further until they've got some more incentive to do that. All the data we've seen so far, including PCE today, not really giving a justification for that. So I think we're gonna be kind of leveling out, ticking a little bit higher in the meantime until we get some more data to support a move lower on rates. As far as weekly mortgage tip, wanting to talk about when to close to get the lowest closing cost for your clients. So one of the biggest factors when looking at closing, if you're closing the beginning of the month or closing the end of the month, has a big impact there and can change closing costs depending on your loan amount of anywhere from $1,000 to sometimes $3,000 or $4,000 total in the amount of closing costs. And the reason for that is because if you close at the beginning of the month, they have to collect interest from the beginning through the end of that month as part of your closing costs. And then your first payment, of course, is going to be about 2 months out. So if you're closing the beginning of October, you skip November and your first payment's December So basically 2 months. But if you close the end of October, you have fewer days you're collecting interest on. So your first payment's still December 1st, you still skip all of November, but you have lower closing costs, but a shorter timeframe before the first payment. So it ends up being a wash. But if your goal is to maximize using upseller credit, better to close near the end of the month or beginning of the month so you can have higher closing costs to use it up. If you want to keep the closing cost as low as possible, better to close near the end of the month for that reason. Next up, as far as data this month here, this week, new home sales— so signed contracts for new properties— rose 20% for the month of August to an annualized pace of about 800,000. It's quite a bit stronger than the estimates that were expecting 665,000 for an annualized pace. The previous report was report was also revised higher. So going up 20%, a huge difference here, because if it hasn't been revised higher, it would have been a 23% increase month over month. Again, this is for signed contracts for the month of August. So this is before the rates actually fell in September. And so likely going to see an increase in activity or expected increase in activity once those numbers come out. Same thing for August existing home sales. Market was flat, but the market was actually expecting— actually, I mean, existing home sales month over month were flat, but the market expected a 1.5% drop. So coming in above expectations. As with most reports, it doesn't matter what the actual number is. All that matters for mortgage rates is did the number come in as expected, better than expected, or worse than expected. The mis-measured closings for August before— also before the rates came down. And so moving forward, looking into September and October closings, those are going to be the buyers who were looking around September time frame when rates were lower. So we'll see if that has a meaningful impact on those numbers. Next, the Mortgage Bankers Association reported mortgage applications were flat for the week, no changes to purchases, and refinances up just 1%. But remember, this does show the continued strength from the previous week, which reflected huge increases in applications due to the lower rates. So even though there's no change, that doesn't mean they're weaker. It just means that the strength is maintained. So total applications are up 30% from where they were 2 weeks ago. So going flat week over week just means again that there wasn't an increase after that initial surge, but it didn't drop off either. Initial jobless claims fell 14,000 and continuing claims fell 2,000. Initial claims now at 218,000 for the week, the lowest level in quite some time, but continuing claims still staying elevated at 1.92 million. And this puts pressure on the Fed— on, excuse me, on mortgage rates, since the Fed has been really clear they want to see higher levels of unemployment, they want to see higher levels of initial jobless claims, higher levels of layoffs in order to justify moving mortgage rates down in order to justify the Fed funds rate cuts in the future. So not seeing these numbers come in very strong, you know, not seeing a whole lot of initial jobless claims isn't helping that case for it. So when this came in kind of low, that is a reason for rates to tick up a little bit higher as well. Next, we got the final Q2 GDP report. There's 3 versions of reports. There's the initial first revision, and then the second final revision. That came back showing in 3.8% annualized growth, which is above estimates. The projections were for no change after the second look showed a 3.3% annualized rate. And the stronger growth is also good— not, not also not good for mortgage rates, as a growing economy means no stagnation, uh, that would require lower rates to be able to stimulate it. So no Fed intervention required, not great for rates. And lastly here, the PCE The personal consumption expenditures inflation rate came in for August slightly above estimates, coming in at 0.3% versus the 0.2% expected. Year over year, it moved from 2.6% to 2.7%, which matches estimates. And the core rate, stripping out food and energy prices, which is— this is the one mostly looked at by the Fed— rose 0.2%. Year over year stayed at 2.9%, exactly as estimated. As always, hopefully this is helpful. Have a fantastic weekend. Welcome to fall. We'll see you next time. Take care.
