Weekly Market Update: 03/15/24

by Jane Steinhoff

Week Ending 03/15/2024

Weekly Market Update: High Inflation

Helping you navigate the market

High Inflation

Stronger than expected inflation data was negative for mortgage markets this week. A shortfall in consumer spending was a distant second in importance to investors, and mortgage rates ended the week higher.

The Consumer Price Index (CPI) is one of the most widely followed inflation indicators. To reduce short-term volatility and get a better sense of the underlying inflation trend, investors typically look at core CPI, which excludes the food and energy components. In February, Core CPI rose 0.4% from January, above the consensus forecast and 3.8% higher than a year ago.

Although the core CPI annual rate has fallen from a peak of 6.6% in September 2022, it is still far above the readings around 2.0% seen early in 2021, which is the stated target level of the Fed. One big reason is that shelter (housing) costs remained elevated and again were responsible for the largest portion of the increase. However, the CPI data measures shelter costs with a lag, and more timely indicators from other sources suggest that this component will slowly come down later in the year. Other categories with large monthly increases included airline fares, apparel, and auto insurance.

Adding to the inflation concerns, another indicator released this week which measures costs for producers also was higher than expected. The core Producer Price Index (PPI) rose 0.3% from January, above the consensus forecast of just 0.2%. Due to the higher than expected inflation reports this week, expectations for a reduction in the federal funds rate have been pushed out until even later in the year. Investors now anticipate that the first rate cut will not take place until June or July.

After posting large declines in January, consumer spending picked up in February, but by less than expected. Retail sales rose 0.6% from January, below the consensus forecast for an increase of 0.8% and the results for the prior month were revised lower as well. The strongest rebound in spending was seen in motor vehicles/parts, electronics, appliances, and building materials. Retail sales, which are not adjusted for inflation, were just 1.5% higher than a year ago, below the rate of price increases over that time frame.

Week Ahead

The next Fed meeting will take place on Wednesday. No change in rates is expected, and investors will focus on the latest forecasts from officials for monetary policy and economic activity. For economic reports, the spotlight will be on the housing sector. Housing Starts will be released on Tuesday and Existing Home Sales on Friday.

Mon	3/18	NAHB Housing
Tue	3/19	Housing Starts
Wed	3/20	Fed Meeting
Thu	3/21	Existing Home Sales

Mortgage Rates	Rose	0.20%
Dow	Rose	100
NASDAQ	Fell	100

Cross Country Mortgage would like to thank our partner, MBSQuoteline for their insightful information.

Housing Market News • Mortgage and Home Loans • Weekly Market Report • March 9, 2024

Weekly Market Update: 03/08/24

by Jane Steinhoff

Economic Data

Weekly Market Update for Week Ending in

03/08/2024

Helping you navigate the market

Unemployment Rate Climbs

This week, the major economic data was weaker than expected, and there were no unfavorable surprises from the Fed. As a result, mortgage rates ended a little lower.

Following very strong gains in January, the economy added another 275,000 jobs in February, well above the consensus forecast of 200,000. The largest gains were seen in the healthcare, government, and restaurant/hospitality sectors. However, the results for prior months were revised lower by a massive 167,000, more than offsetting the strength this month.

The other major components of the report also revealed unexpected weakness. The unemployment rate rose to 3.9%, the highest reading since January 2022. This is up from 3.4% in April 2023, which was the lowest level since 1953. Average hourly earnings were 4.3% higher than a year ago, below the consensus forecast. Fed officials carefully monitor wage growth because it generally raises future inflationary pressures.

Another major economic report released this week also fell short of expectations. Since services account for roughly 75% of economic activity in the US, investors closely watch key data on the sector from the Institute of Supply Management. The latest report revealed that the ISM national services index fell to 52.6, below the consensus forecast. Still, readings above 50 indicate an expansion in the sector.

In his semi-annual testimony to Congress, Fed Chair Powell stuck to the same script as in other recent speeches. He continued to emphasize that future decisions on monetary policy would be determined by incoming economic data and that officials would carefully consider the risks of waiting too long to cut rates versus loosening too soon. Most investors now anticipate that the first rate cut will take place in June.

Economic Data for the Week Ahead

Investors will continue to watch for Fed officials to elaborate on their plans for future monetary policy ahead of the next meeting on March 20. For economic reports, the Consumer Price Index (CPI) will be released on Tuesday. CPI is a widely followed monthly inflation indicator that looks at the price changes for a broad range of goods and services. Retail Sales will come out on Thursday. Since consumer spending accounts for over two-thirds of U.S. economic activity, the retail sales data is a key measure of the health of the economy. Import Prices will be released on Friday.

Tue	3/12	CPI
Thu	3/14	Retail Sales
Thu	3/14	PPI
Fri	3/15	Import Prices

Mortgage Rates	Fell	0.10%
Dow	Fell	300
NASDAQ	Rose	100

Cross Country Mortgage would like to thank our partner, MBSQuoteline for their insightful information.

Housing Market News • Mortgage and Home Loans • Weekly Market Report • January 26, 2024

Weekly Market Update – 01/26/2024

by Jane Steinhoff

Week Ending 01/26/2024

Weekly Market Update

Helping you navigate the market

Inflation Eases

The major inflation data released this week was right on target. While GDP growth exceeded expectations, its impact was minor. As a result, mortgage rates ended the week with little change.

Fed officials keep a close eye on inflation, and the PCE price index is their favored indicator. In December, core PCE, which excludes food and energy to reduce short-term volatility, was up 2.9% from a year ago. This was down from an annual rate of 3.2% last month and the lowest level since March 2021. While still moving in the right direction, it remains above the Fed’s target of 2.0%.

Gross Domestic Product (GDP) is the broadest measure of economic activity. During the fourth quarter, U.S. GDP rose at an annualized rate of 3.3%, above the consensus forecast of 2.0% but down from 4.9% during the third quarter of 2023. Strength was seen in consumer and government spending, business investment, and inventory growth. Despite higher interest rates, the economy has remained surprisingly resilient and has shown few signs that it will enter a recession.

After ten consecutive hikes since early 2022, the European Central Bank (ECB) held benchmark interest rates steady for the third meeting in a row as expected. The statement released after the meeting again emphasized that future monetary policy decisions will be based on incoming economic data. During the press conference, ECB President Lagarde said that any discussion of a rate cut is “premature.” Similar to the U.S. Fed, the ECB is still planning to hold rates near current levels for now to help bring down inflation.

Week ahead

The next Fed meeting will take place on Wednesday. While no change in rates is expected, investors will look for guidance on the anticipated timing of rate cuts later in the year. For economic reports, the ISM national manufacturing index will come out on Thursday. The key Employment report will be released on Friday, and these figures on the number of jobs, the unemployment rate, and wage inflation will be some of the most highly anticipated economic data of the month.

Tue	1/30	Consumer Confidence
Wed	1/31	Fed Meeting
Thu	2/1	ISM Manufacturing
Fri	2/2	Employment

Mortgage Rates	Flat	0.00%
Dow	Rose	200
NASDAQ	Rose	150

We would like to thank our partner, MBSQuoteline for their insightful information.

Jeremy Miller

Divisional Sales Manager

M 973-580-9042

D 908-721-5852

F 914-984-5048

W crosscountrymortgage.com/jeremy-miller

E jeremy.miller@ccm.com

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Housing Market News • May 19, 2022

The One Thing Every Homeowner Needs To Know About a Recession

by Nicole McCormick

A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.

The National Bureau of Economic Research (NBER) defines a recession this way:

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.

The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.

Bottom Line

We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.

Buying a home • Housing Market News • Mortgage and Home Loans • May 10, 2022

How Today’s Mortgage Rates Impact Your Home Purchase

by Nicole McCormick

If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach. Mortgage rates directly impact the monthly payment you’ll have on the home you purchase. So, when rates rise, so does the monthly payment you’re able to lock in on your home loan. In a rising-rate environment like we’re in today, that could limit your future purchasing power.

Today, the average 30-year fixed mortgage rate is above 5%, and in the near term, experts say that’ll likely go up in the months ahead. You have the opportunity to get ahead of that increase if you buy now before that impacts your purchasing power.

Mortgage Rates Play a Large Role in Your Home Search

The chart below can help you understand the general relationship between mortgage rates and a typical monthly mortgage payment within a range of loan amounts. Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within that range, while the red is a payment that exceeds it (see chart below):

As the chart shows, you’re more likely to exceed your target payment range as mortgage rates increase unless you pursue a lower home loan amount. If you’re ready to buy a home, use this as your motivation to purchase now so you can get ahead of rising rates before you have to make the decision to decrease what you borrow in order to stay comfortably within your budget.

Work with Trusted Advisors To Know Your Budget and Make a Plan

It’s critical to keep your budget top of mind as you’re searching for a home. Danielle Hale, Chief Economist at realtor.com, puts it best, advising that buyers should:

“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”

No matter what, the best strategy is to work with your real estate advisor and a trusted lender to create a plan that takes rising mortgage rates into consideration. Together, you can look at your budget based on where rates are today and craft a strategy so you’re ready to adjust as rates change.

Bottom Line

Even small increases in mortgage rates can impact your purchasing power. If you’re in the process of buying a home, it’s more important than ever to have a strong plan. Let’s connect so you have a trusted real estate advisor and a lender on your side who can help you strategize to achieve your dream of homeownership this season.

Buying a home • November 8, 2021

Two Graphs That Show Why You Shouldn’t Be Upset About 3% Mortgage Rates

by Nicole McCormick

With the average 30-year fixed mortgage rate from Freddie Mac climbing above 3%, rising rates are one of the topics dominating the discussion in the housing market today. And since experts project rates will rise further in the coming months, that conversation isn’t going away any time soon.

But as a homebuyer, what do rates above 3% really mean?

Today’s Average Mortgage Rate Still Presents Buyers with a Great Opportunity

Buyers don’t want mortgage rates to rise, as any upward movement increases your monthly mortgage payment. But it’s important to put today’s average mortgage rate into perspective. The graph below shows today’s rate in comparison to average rates over the last five years:As the graph shows, even though today’s rate is above 3%, it’s still incredibly competitive.

But today’s rate isn’t just low when compared to the most recent years. To truly put today into perspective, let’s look at the last 50 years (see graph below):When we look back even further, we can see that today’s rate is truly outstanding by comparison.

What Does That Mean for You?

Being upset that you missed out on sub-3% mortgage rates is understandable. But it’s important to realize, buying now still makes sense as experts project rates will continue to rise. And as rates rise, it will cost more to purchase a home.

As Mark Fleming, Chief Economist at First American, explains:

“Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”

In other words, the longer you wait, the more it will cost you.

Bottom Line

While it’s true today’s average mortgage rate is higher than just a few months ago, 3% mortgage rates shouldn’t deter you from your homebuying goals. Historically, today’s rate is still low. And since rates are expected to continue rising, buying now could save you money in the long run. Let’s connect so you can lock in a great rate now.

Buying a home • Mortgage and Home Loans • November 3, 2021

Experts Project Mortgage Rates Will Continue To Rise in 2022

by Nicole McCormick

Mortgage rates are one of several factors that impact how much you can afford if you’re buying a home. When rates are low, they help you get more house for your money. Within the last year, mortgage rates have hit the lowest point ever recorded, and they’ve hovered in the historic-low territory. But even over the past few weeks, rates have started to rise. This past week, the average 30-year fixed rate was 3.14%.

What does this mean if you’re thinking about making a move? Waiting until next year will cost you more in the long run. Here’s a look at what several experts project for mortgage rates going into 2022.

Freddie Mac:

“The average 30-year fixed-rate mortgage (FRM) is expected to be 3.0 percent in 2021 and 3.5 percent in 2022.”

Doug Duncan, Senior VP & Chief Economist, Fannie Mae:

“Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low and supportive of mortgage demand and affordability.”

First American:

“Consensus forecasts predict that mortgage rates will hit 3.2 percent by the end of the year, and 3.7 percent by the end of 2022.”

If rates rise even a half-point percentage over the next year, it will impact what you pay each month over the life of your loan – and that can really add up. So, the reality is, as prices and mortgage rates rise, it will cost more to purchase a home.

As you can see from the quotes above, industry experts project rates will rise in the months ahead. Here’s a table that compares other expert views and gives an average of those projections:Whether you’re thinking about buying your first home, moving up to your dream home, or downsizing because your needs have changed, purchasing before mortgage rates rise even higher will help you take advantage of today’s homebuying affordability. That could be just the game-changer you need to achieve your homeownership goals.

Bottom Line

If you’re thinking of buying or selling over the next year, it may be wise to make your move sooner rather than later – before mortgage rates climb higher.

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Buying a home • October 12, 2021

Don’t Wait for a Lower Mortgage Rate – It Could Cost You

by Nicole McCormick

Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re one of the buyers who worry they’ve missed out, rest assured today’s mortgage rates are still worth taking advantage of.

Even today, our mortgage rates are below what they’ve been in recent decades. So, while you may not be able to lock in the rate your friend got recently, you’re still in a great position to secure a rate well below what your parents and even grandparents got in years past. The key will be acting sooner rather than later.

In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:While a projected half percentage point increase may not seem substantial, it does have an impact when you’re buying a home. When rates rise even slightly, it affects how much you’ll pay month-to-month on your home loan. The chart below shows how it works:In this example, if rates rise to 3.55%, you’ll pay an extra $100 each month on your monthly mortgage payment if you purchase a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan.

Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we’re seeing right now give you a unique opportunity to afford more home for your money while keeping your monthly payment down.

Bottom Line

Waiting for a lower mortgage rate could cost you. Experts project rates will continue to rise in the months ahead. Let’s connect so you can seize this opportunity before they increase further.

Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.
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Uncategorized • July 19, 2021

What You Should Do Before Interest Rates Rise

by Better Homes and Gardens Green Team

In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.

Sell and Move Up (or Downsize)

Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.

The chart below shows average mortgage rates by decade compared to where they are today:Today’s rates are below 3%, but experts forecast rates to rise over the next few years.

If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.

Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase:

Breaking It All Down:

Using the chart above, let’s look at the breakdown of a $300,000 mortgage:

When mortgage rates rise, so does the monthly payment you can secure.
Even the smallest increase in rates can make a difference in your monthly mortgage payment.
As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.

No matter what, whether you’re looking to make a move up or downsize to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.

Refinance

If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.

Bottom Line

Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.

Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.
What’s your home’s value?

Contact one of Our Agents today!

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Mortgage and Home Loans • May 8, 2021

The Power of Mortgage Pre-Approval

by Better Homes and Gardens Green Team

Some Highlights

Mortgage pre-approval means a lender has reviewed your finances and, based on factors like your income, debt, and credit history, determined how much you’re qualified to borrow.
Being pre-approved for a loan can give you clarity while planning your homebuying budget, confidence in your ability to secure a loan, and a competitive edge in a bidding war.
In today’s market, connecting with a lender to get pre-approved may be the game-changer that helps you secure your dream home.

Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.
What’s your home’s value?

Contact one of Our Agents today!

See out Complete Inventory of Available Properties!

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