In this weekly market update, Jordan Keck, a mortgage lender, provides a concise briefing on current mortgage rates, the anticipated Federal Reserve rate cut, and actionable advice for lenders and borrowers. He explains the benefits and eligibility criteria of reverse mortgages, highlighting real‑world scenarios where they can be a financial lifeline. Keck then summarizes Federal Reserve Chair Jerome Powell’s recent comments indicating a likely 0.25 % rate cut in September, and discusses how market expectations are already reflected in mortgage pricing. The update proceeds with a snapshot of housing market indicators: July new‑home sales, June Case‑Shiller and FHFA appreciation indices, and year‑over‑year price trends. Labor market data are reviewed, noting declines in initial and continuing unemployment claims while contextualizing the broader unemployment picture. Finally, Keck reports on the latest Personal Consumption Expenditures (PCE) inflation numbers, which matched expectations, and closes with a call to share the update and sign up for future weekly briefings.
Chapters
Good morning and happy Friday. Jordan Keck, your lender buddy, back here in the office with your weekly market update. Kicking off, interest rates last week at 6.62%, dropping further to 6.5%. Most of this in anticipation of the Fed rate cut next month. So as I've been talking about, talk with your clients already. Do not wait for that to happen. At this point, there's about a 90% chance of that Fed rate cut, but the markets for mortgages are already pricing that in. So when the rate cuts happen, there shouldn't really be any change in the mortgage rates for it. So get them off the fence, get them moving now. As far as mortgage tips this week, want to talk about reverse mortgages. This is something that I've had several conversations with clients over the years, very familiar with them. But just never really had the system in place for them. Now we've got a great team, we've got a great system, great provider for these reverse mortgages. And so if you have any clients or you know somebody that might be interested, there's a huge amount of misinformation out there. We'd love to have a conversation to be able to help you or help your clients with these. You can use them for both existing homes or for property that's being purchased. So for example, one of the really interesting points about a reverse mortgage is that there's not a qualifying credit score and there's typically not much of an income requirement there. So I've had a couple times where somebody's in their home, maybe it's free and clear, but they've been on a fixed income for a while on Social Security. Had a gal I talked to this week, only makes about $1,100 a month and has been drawing on the retirement accounts. Once that's done, spending goes up on credit cards, getting behind on property tax bills, and now her credit's to the point where she's not able to qualify for another property, but could sell hers and then have to rent, but she doesn't even really have enough to be able to qualify for renting. So in that case, a reverse mortgage made a lot of sense for her because she's able to get into a new property, use the equity she's got, pay off her debts, and not have to have a mortgage payment going into that next home. Minimum age requirement is 62.5. And the amount that you need as far as equity in your home is pretty significant, typically around 50% loan-to-value maximum. Depends on the age though. So again, some really cool things there. Not for everybody, but for the right situation can be a real lifesaver. So again, let me know if you have any questions on those now being able to offer them. And it does— is, is applicable on existing stick-built homes and on manufactured homes that meet FHA guidelines. Next up, as far as information this week, we had Fed President Powell spoke last week and pretty much gave a green light for the Fed to cut rates a quarter of a percent at their September meeting. When he spoke in Jackson Hole at the Fed meeting, made a pretty clear case for that rate cut, saying they acknowledged the slowdown in job growth. There's a larger than previously believed— the slowdown was larger than previously believed, and the downside risks of employment are continuing to rise. Currently, as I mentioned, the market's pricing in about a 90% chance of a rate cut for September, and mortgage rates are now lower in anticipation of that cut. So if they cut rates a quarter of a percent, anticipation is basically met. If they cut more than a quarter of a percent, very small chance of that happening, that's when mortgage rates would have to catch up, so to speak. And if they didn't cut rates, mortgage rates would go up as a response. New home sales for July fell 0.6% to a 652,000 annualized pace. But this is a little bit skewed because June was also revised higher. So comparing June to July here, see that drop. If you didn't have the revision for June, you would have actually seen July's number be up 4% as a result. Sales year over year are still down 8%. They're likely going to see that number move more positive direction here next month or two. As the rate drop goes into effect for those who are shopping into the market. Case-Shiller and FHFA home appreciation indexes fell 0.3% and 0.2% respectively for June. These are seasonally adjusted numbers. The raw numbers for Case-Shiller was actually up 0.1%, uh, before those seasonal adjustments. Um, but again, not a huge change up or down one way or the other there. Year-over-year prices are up 1.9% and 2.6% respectively. Both are slowdowns from the previous report showing that we're not going backwards, but it's definitely decelerating from where we were before. Initial unemployment claims fell 5,000 to 229,000 for last week, and continuing claims fell 7,000 to 1.95 million. So very, very close to that 2 million mark on the continuing claims number. And if you look and compare January of this year to now, there is 200,000 more people receiving continuing benefits filing for unemployment than there were, but 900,000 people who initially filed for continuing benefits have dropped off without receiving a job due to the expiration of their benefits. As a result of that, they're no longer counted in the total unemployment rate, and they're not counted in the continuing claims number. So those who are still unemployed looking for work could be significantly higher than the 1.95 million, even though that is one of the highest numbers we've seen. In recent years. And lastly here, PCE, the consumer or the personal consumption expenditures inflation report, came in pretty much exactly as expected across the board. The headline number was 0.2% of an increase year over year, going to 2.6%, which is where it was. The core rate rose 0.3% and is up year over year at 2.9%. Again, all of those numbers exactly as the market expected, so no real movement there. As always, hopefully this is helpful. Feel free to pass this along to someone if you think it may benefit. Get signed up to receive them every single Friday. Hope you have a great 3-day weekend with Labor Day on Monday. We'll see you next time. Take care.
