In this weekly market update, Jordan Keck reports that average conventional mortgage rates rose from 6.00% to 6.14% and clarifies that this figure is an industry‑wide average, not a specific quote. He provides a mortgage tip outlining the maximum seller‑credit percentages allowed for FHA (6%), VA (4%), USDA (6%) and various conventional scenarios (ranging from 2% to 9% depending on down‑payment and property type). Keck then links the recent geopolitical event, Iran’s Operation Epic Fury and the closure of the Strait of Hormuz, to a 15% jump in oil prices and sharply higher tanker shipping rates, explaining how higher oil costs feed inflation and pressure mortgage rates. He discusses the new Trigger Lead Bill, which prohibits credit bureaus from selling mortgage‑application contact data, potentially reducing unwanted solicitation calls. The segment moves to labor market data: the February Challenger report shows ~50,000 job cuts (4th highest since 2009) with 8% attributed to AI; ADP’s February report shows 63,000 jobs added, mainly in education and healthcare; and the BLS reported 92,000 job losses for February, below expectations but subject to future revisions. Mortgage activity is highlighted with the MBA reporting a 6% weekly rise in purchase applications (10% YoY) and a 14% rise in refinances (109% YoY). Home‑price trends from Cotality show a 0.1% national decline in January, with a modest 4.4% projected 12‑month appreciation. Keck concludes that oil‑driven inflation remains the primary pressure on rates, with no immediate rate movement observed, and encourages viewers to stay informed.
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Good morning and happy Friday. Jordan Keck here, your lender buddy, with your weekly market update. Kicking off, interest rates definitely moved higher this week from 6% on average to 6.14%. And this, as a reminder, is not a rate quote. This is the average of lenders across the country looking at a conventional purchase scenario with top-tier credit, top-tier down payment, high loan amount, all of those in effect. So this is really just an indicator of where rates are moving as an average. Some lenders are seeing higher increases, some are seeing lower. As far as your weekly mortgage tip, wanting to talk about the maximum allowed seller credit on each loan type. And so I have a sheet, a cheat sheet for this if you're interested, but the gist is that each loan type has their maximum amount of seller credit that can be used to go towards the buyer's closing costs. Now, this is separate from buyer agent commission. That's its own category. It's not factored into this amount here. And this also doesn't take into account anything that's paid by the seller directly to, let's say, a contractor at closing on the buyer's behalf. But specifically going towards buyer's closing costs and prepaid items on FHA, it's 6% of the sales price for the maximum allowed. On VA, it's 4%. USDA is 6% matching FHA. And on conventional, it actually changes depending on the scenario. If it's an investment property purchase, then the maximum allowed seller credit is only 2% of the purchase price. If it's owner-occupied with less than 10% down payment, then it's 3% that's allowed. If it's owner-occupied and the down payment's between 10% and 25%, then they can get up to 6% in seller credit. And if it's owner-occupied, 25% down or more, then they can get up to 9% of the sales price in allowable seller credit. If you have questions on that or don't want to remember it, always feel free to give me a call or text. Happy to help. So we get into information this week here. Obviously, Operation Epic Fury in Iran is the big news topic here, and that's impacting mortgage rates, believe it or not. And the biggest reason for that is because of the Strait of Hormuz. The primary driver of the mortgage rate fear on this one is inflation. And one of the biggest impacts on inflation is oil, since it impacts virtually everything directly in terms of production or of transportation. With Iran saying that they've closed the Hormuz Strait, oil shipping through has virtually stopped and oil prices are up almost 15% since Friday. With over 20% of the world's oil coming through this strait. China gets 45% of their oil through there, and shipping rates for super oil tankers to China have risen by 50% to a record high. Atlantic shipping rates have risen 43%, and Pacific rates are up 45%. This is all within the last week. And so mortgage rates, as a result of that moving higher, hopefully this is short-lived, but we'll see what happens in the longer term. Next, the Trigger Lead Bill went into effect Thursday here this week, just yesterday. And this means in theory that the credit bureaus will no longer be selling contact data to anybody that has their credit report pulled for mortgage purposes. You may have known, I've talked about this for years, ever since 2022, it's gotten really bad with some customers getting dozens of phone calls a day the moment they have their credit report pulled, even though they didn't opt in. Previously, I've been recommending everybody get on the Do Not Call list, which is just donotcall.gov. Still great to get on there and recommend your clients if they haven't, but we'll see now that this has actually gone into effect if this cuts down on the need for that to happen and not as many people getting bombarded by these lenders getting their information bought from the credit bureaus there. So we'll see if there are still some lenders violating it. There are a couple of exceptions if there's already a preexisting business relationship. So example, if somebody has a checking or savings account at the bank, they can contact them that way if they're the servicing company, things like that. But by and large, should cut down dramatically. Next, we got the February Challenger Report, which had almost 50,000 job cuts. This is normal. This is lower than the January numbers. We saw a bigger cut in the month of January, but that's fairly standard since there's a lot of holiday hiring, a lot of seasonal hiring that gets let go in January. But the combined January and February cuts number are higher than normal and are now the 4th highest since 2009. Of the total cuts, 8% of them are being attributed to AI. So interesting to see as we move forward if there's a bigger and bigger percentage of job displacement as a result of jobs getting replaced essentially by AI. Next, ADP's February report showed 63,000 jobs created. Higher than the 50,000 that was expected. Almost all of the jobs came from education and healthcare, adding about 58,000 total. Professional business services lost 30,000 jobs and construction added 19,000. There was also a revision lower for January, dropping from 22,000 to 11,000 on the whole, essentially making the headline number pretty close to in line with what expectations were. Next, the MBA Mortgage Bankers Association reported that mortgage applications have risen on both purchase and refinances here this last week. Purchase applications rose 6% for the week to be up 10% year over year, and refinances jumped 14% on the lower rates we had and are up 109% year over year. We have Cotality's January report for home prices showed a drop of 0.1% nationwide. Year over year values are up just 0.7%, which is a decrease from the 0.8— or excuse me, 0.9% we saw in the previous report. The forecast for February is also flat with an expected 4.4% increase in the coming 12 months for home price appreciation. Unless you hear the BLS jobs report that came in today at 92,000 job losses for the month of February, below the 59,000 expected. And we saw a previous report revision for the last 2 months, which revised lower by a combined 69,000 jobs. Meaning that overall headline losses plus the revisions, meaning they missed by over 100,000 jobs from what they were expecting. And there's another revision still to happen for the January numbers. BLS usually overstates to begin with anyway. And so if we saw 92,000 job losses for February, that could still be revised 2 other times to be even greater. Usually the market would get better on something like this, the mortgage rates would get better. So far, there's still most of the pressure right now is coming from the oil side. So we haven't seen an immediate increase in mortgage rates as a result, or decrease in mortgage rates, I should say. Be interesting to watch throughout the day and see if there's just a little bit of delayed effect. As always, hopefully this is helpful. Have a fantastic weekend. We'll see you next time. Take care.
