All Eyes On the FED


It’s been a wild week for mortgage rates with the FED announcement coming on Wednesday 3/21, and news of more possible bank failures in the market.

After all the volatility, mortgage rates are about .1 to .15% higher than my update last week.

Below are average interest rates across America. 

Most experts I follow are predicting a 0 to .25% FED rate hike.

The press conference will be very important as the FED Chief Powell will need to do his best to calm a scared market. 


Existing home sales increased a whopping 14.5% in February!

This is a great number and adds more to the argument that the housing market hit bottom likely in late 2022.

This increase in existing home sales is the first increase after 12 months of decreasing sales and marks the biggest

one month jump since July of 2020.

Current U.S. housing inventory sits at 980,000 with a 2.6 month supply. 

March Madness for Interest Rates


March Madness but for interest rates?

Mortgage rates have dropped close to .5% over the past week.

Some of this improvement was given back Monday afternoon and so far Tuesday morning.

To say this market is volatile is an understatement.

Below are average interest rates across America as of 3/13. 

The news of the Silicon Valley Bank Failure shook financial markets and had many investors fleeing toward the safety of bonds, which helps interest rates improve.

Ironically, the major component of the Silicon Valley Bank failure was their investment in bonds.

Silicon Valley Bank purchased bonds when interest rates were much cheaper. 

When rates moved higher, their bonds were not worth as much as there are higher yield bonds available today.

If they have to sell, they would need to sell at a discount and lose money on their investment.

As depositors started pulling money out of the bank, the bank is forced to raise capital to meet this demand.

Large investments would have to be sold at a loss, thus causing the bank to become insolvent.

With the news of multiple other bank failures, I’m left to wonder if the FED has moved too far too fast?

Actually I’m not wondering, I firmly believe the FED’s actions have been too drastic. 

Banks only have to hold onto 10% of their deposits and they invest the other 90%. 

Banks that invested in bonds will have difficulty selling due to the much higher rate levels today then when many of these bonds were purchased.

This could put them in a liquidity crisis should depositors take their money out of the bank.

I also strongly believe the labor markets are much worse than the jobs reports make them out to be.

A large amount of companies have had large layoffs or hiring freezes, yet the jobs numbers are good?

While people are out of work or working less hours, we have higher interest rates on short term loans, car loans, HELOCS, etc. due to the FED rate hike.

Less and less people are going to be able purchase goods and services thus hurting the economy more.

The FEDs actions have worked, but it takes time for those results to show in the numbers they monitor.

It’s my opinion that the FED is pushing rates higher too fast putting a lot of other areas in the economy at risk.

The Consumer Price Index which measured inflation was just released and came in where experts predicted.

8:39 AM : The Consumer Price Index (CPI), which measures inflation on the consumer level, was reported at 0.4% for the month, and decreased by 0.4% to 6% year over year, in line with expectations.

The Core CPI Rate, which strips out food and energy prices, increased by 0.1% for February, which was above the 0.4% estimate, and decreased by 0.1% to 5.5% year over year, also in line with expectations.

Next week is FED week where they will announce if they will raise rates and by how much.

This market is a wild ride – buckle up.


Here is the audio of this month’s report:

Please email Kalee Taylor ( if you would like to watch the report or get the full slide deck.

The average spread between the 10 year treasury and 30 year fixed mortgage is typically 1.72%.

Right now it’s much higher which is a big reason why experts predict interest rates will eventually drop as this comes back to average.

Inventory is down month over month across the country.

All Eyes on Friday’s Jobs Report


Interest rates have continued to inch higher.

Today, the average interest rate across America for a conventional 30 year fixed loan is 6.99%. 

All eyes are on the Jobs Report this week and the CPI Inflation Report next week.

Remember that the January Jobs Report started this trend towards higher rates in February.

The US Jobs Report comes out Friday and if the job creation numbers are weak, I think we will see some nice interest rate improvement.

If we add that to a nice inflation drop next week, rates could erase some of the gains from February.

So if you want rates to go down, you’re a big fan of a weak Jobs Report and an Inflation Report showing a good drop in inflation.

If you lock a mortgage and interest rates drop significantly after you lock, you could be eligible for a Float Down.

A float down is when interest rates move .25% lower or more with same costs and you are able to negotiate your rate down.

This week, I’m the #1 fan of a weak Jobs Report! 


This week, Barry Habib from MBS Highway provided a demonstration of how higher interest rates could be a unique opportunity for a homebuyer to benefit the most.

When the market hits or comes close to the bottom, buyers will usually benefit from great home appreciation as demand picks up.

It’s no secret that we have a ton of pent up demand for would-be home buyers that are on the sidelines due to higher rates and payments.

See the appreciation after the market hit the bottom in 2012.

In the example below, he illustrates this with a $500,000 purchase price with a $400,000 mortgage.

If rates go up 1%, the $400,000 mortgage will be $257 more per month or $3,084 more per year.

With demand down, the buyer can likely negotiate better terms.  In this example, he shows the buyer negotiating $10,000 off the list price.

Everyone in the mortgage industry is expecting interest rates to go down.

As they come down, demand will pick up and home appreciation is likely to occur. 

In the example below, he estimates 3% appreciation or $15,000.

He also assumes the below client will likely refinance to a lower rate when the circumstances make sense.

This may cost the client $5,000 in costs though that is dependent on the rate a customer chooses.

If this happens, the client would lose $3,084 in interest but would gain $25,000 in cost savings and appreciation.

Even when accounting for a $5,000 refi fee, the customer comes ahead $16,916 in the first year. 


In the video below, I explain the powerful principle of debt shifting inflation from a home owner to a mortgage holder.

Rates Continue to Move Higher


Interest rates continued to move higher this week.

Average 30 year fixed conventional rates across the country are moving towards the high 6%’s depending on credit and cost considerations.   

Some FED members are in favor of a 50 bps Federal Funds Rate hike at their next meeting in March, even after the FED telegraphed a likely 25 bps hike moving forward.

It’s a very volatile time for interest rates with inflation numbers not coming in as low as expected and a better jobs report than expected.

MBS highway expects slower jobs growth on the March 10th report and better inflation numbers on the March CPI report.

This will hopefully bring back some of the recent interest rate improvements the market has gotten used to.


The VA Funding Fee is being reduced for closings after 4/7/2023.

VA Funding Fees for less than 5% down payment are going down from 2.3% to 2.15%.

Subsequent use for less than 5% down payment is going down from 3.6% to 3.3%.  

This is great news for Veterans!


Here is the recording of Matt Lipscomb’s class if you missed it.

Rates Higher As Inflation Numbers Come in Higher Than Expected


Interest rates continued to move higher this week. 

The Consumer Price Index (CPI) which measures inflation decreased .1% to 6.4%

The Core CPI Rate which takes out food and energy prices went down .1% to 5.6%

Although inflation went down, both numbers were higher than originally expected.

This is likely a component of why rate pricing has gone up over the past week as traders

took a defensive position if the CPI didn’t mean original expectations.

This is a really good article by Mortgage News Daily detailing the current interest rate market:

I still expect rates to go down long term but there will be some bumpiness to the ride.

1/0 and 2/1 buy downs are great options for this rate environment because you are essentially

having the seller prepay for a lower rate and if you refinance/sell before the temporary buydown period is up, you get all funds back you didn’t use.

Call me if you have any questions about how temporary buydowns work.

Have a Happy Valentine’s Day!


I’m really excited for this class taught by Top Financial Advisor Matt Lipscomb.

Please join us tomorrow via zoom at 9 am Arizona Time. 



Below are January Mortgage Origination stats from Black Knight,

with corresponding article:

  • Rate lock volumes rose 32% in January driven by declining rates and seasonal tailwinds, snapping a 9-month streak of declines
  • Purchase (+32%) as well as both rate/term (+37%), and cash-out (+25%) refinance volumes increased proportionally, with refinance locks making up 15% of the month’s overall activity
  • Optimal Blue Mortgage Market Indices from Black Knight showed 30-year rates dropping 36 basis points to 6.16%, continuing a downward trend that began in November 2022
  • Despite the improvement, rate and affordability pressures continue to challenge purchase lending, with the dollar volume of such locks down 44% year over year and 14% below January 2020 levels
  • Purchase lock counts – which exclude the impact of home price changes – were down 41% year over year
  • Nonconforming loans – including jumbos and expanded guidelines – fell as a percentage of total volumes to just under 10%; conforming (58.5%), FHA (18.5%) and VA (12.4%) all picked up share
  • The average loan amount rose from $336K to $340K, while the average purchase price climbed from $419K to $421K
  • Credit scores fell 4 points among cash-out refis – now down 36 points over the past 12 months – and 9 points for rate/terms, but remained relatively unchanged (+1 point) for purchase transactions
  • The ARM share of lending dropped further in January to just above 8% of total locks, as lower rates pushed borrowers back toward fixed-rate offerings


Keeping Current Matter’s excellent monthly market report is now available.

Here is the audio and some of my favorite slides below:



Jobs Report Pushes Rates Higher


Last week, The FED raised the Federal Funds Rate 25 bps as expected.

This didn’t have any major movement on interest rates as these moves are telegraphed well before they happen.

The bigger news over the past week was the US Jobs Report which showed 517,000 jobs created.

The job creation number was well above expectations.

Strong economic data is typically better for the stock market and worse for interest rates.

This pushed interest rates to their highest levels in a month.

Below are average mortgage interest rates across the country.

Per MBS Highway, most of the job creation was an illusion with seasonal adjustments and population controls.

With many companies announcing large layoffs, I tend to agree with them. 

The FED’s next meeting is 3/22. 

Below is a summary of the FED’s statement last week.


Per the Wall Street Journal – the Housing Market is showing signs of thawing.

The article is behind a pay wall but it’s good to see national publications reporting what we are seeing.

Increased buyer demand while listings remain low.

Mortgage rates are a bit higher today, but are still close to 1% lower than they were a few months ago.

Per Keeping Current Matters, they see house buyer demand highly dependent on interest rates.

With current interest rates in the 6-6.5% range – they see good buyer demand and stronger demand coming when/if rates go into the 5%s.

The lack of inventory and increased demand is starting to show in housing price stability. 

New listings continue to lag behind pre-pandemic years. 

The law of supply and demand has helped home prices stabilize sooner than many expected.   

Supply remains low and demand is picking up.

FED Likely to Hike Rates 25 BPS


Interest rates have drifted slightly higher over the past 7 days, but remain in the same range we’ve seen for the past couple weeks.

It’s a big week for U.S. economic news. 

The FED is meeting on Tuesday and will announce any FED rate changes on Wednesday.

Most are expecting a 25 bps rise in the Federal Funds Rate. 

Remember that the Federal Funds Rate does not have a direct correlation to mortgage rates.

It does affect consumer loans like HELOCs, car loans, credit cards, etc.

We also have the US Jobs Report on Friday. 

This should be an interesting week but I’m expecting interest rates to stay in the same range,

barring any economic news that is way out of expectations. 


If you missed our Housing Update with Barry Habib, Dan Habib, Neel Dhingra, and Steve Jacobson – we got you.

Click on link below for recording.  Lot’s of great information here to make you a better professional for your clients.

Barry Habib – “There is No Housing Bubble”

My favorite slide from the presentation is below.

Barry constantly preaches that inflation drives mortgage rates and the stats support his position.

We expect rates to fall as inflation drops in 2023.

Barry Habib is specifically referencing May 10th, 2023.

He states that the CPI report on May 10th will be the date when housing data will start to cooperate with inflation.

Barry Habib predicted in June 2022 to watch the date on November 10th, 2022.

November 10th, 2022 was the best day for mortgage interest rates of the whole year and mortgage interest rates dropped 1% since then. 

The man knows what he is talking about!


During the writing of this update, The Case-Shiller Home Price Index was released measuring U.S. Home Appreciation.

The National Index reported a 7.7% year over year gain in home prices in November 2022, down from 9.2% in October of 2022. 

What does this mean? 

We are seeing the yearly home appreciation numbers dip as home prices in most markets have decreased since mid 2022.

We look at this as a window. 

The US has seen 121 consecutive months of home appreciation and 5 months of modest price decreases. 

We are already seeing a major increase in buyer activity in 2023 and I expect this to continue during the spring buyer season. 

Recession = Lower Mortgage Rates

Interest rates have drifted up about .1% in the past 7 days.

MBS Highway highlighted the Leading Economic Indicators (LEI) Index in their daily update.

The LEI is down 4.2% in the past 6 months and has gone down 10 months in a row.

Another big indicator is an inverted yield curve.

This happens when a longer maturity treasury bond gives you a lower rate of return than a short term treasury bond.

Both the LEI drop and the inverted yield curve are historically accurate signs of a recession. 

A recession = lower mortgage rates.

Leading Mortgage Prognosticator, Barry Habib, expects mortgage rates to drop to 5% in 2023.

Also a reminder that historically housing does very well in a recession.


Mortgage applications have increased 27.9%!

That is a huge swing higher and we’ve been feeling it.

Buyers activity has increased substantially and we’ve even run up against a few multiple offer type situations.

See video below.

Spring is typically a high buyer season and we expect this trend to continue as more home buyers come into the market and I expect mortgage rates to slowly move lower.

Listings Under Contract Show Increase In Home Buyer Activity


Mortgage interest rates hit 4 month lows after the Consumer Price Index Inflation Report on Thursday, January 12th.

They have since moved up some, but are about .1% lower than the week before.

December’s inflation numbers fell in line with estimates and show that inflation is coming back down to earth.

Year over year inflation dropped from 7.1% to 6.5%.

As inflation goes down, interest rates should follow.

Many experts are currently giving a LOCK recommendation as the Mortgage Backed Security Market has a level of resistance on the 200 day moving average that may be difficult to surpass.  This means that rates have a higher likelihood of going up some verses going down in the short term.

We are also seeing an inverted yield curve when comparing the 10 year treasury and 3 month treasury.

This data typically signals a recession, which usually results in a drop in the stock market and improvement in interest rates.

I still expect interest rates to come down in 2023, but it won’t be a linear process.

More down than up days over a period of time = gradual rate improvement.


Mortgage Rates Near 4 Month Lows


Mortgage interest rates are down approximately .2% from last week and rates are near 4 month lows.

Friday was a great day for rates with 2 important economic reports.

The first was the U.S. Jobs Report showing there were 223,000 jobs created in December.

Most of the December jobs appear to be part time or seasonal jobs.

The report also gave a negative revision to October and November numbers by 28,000 jobs.

Although job growth was stronger than expected, wage growth and average weekly earnings were down.

Less money to buy goods/services helps inflation. Less demand equates to lower pricing.

Also on Friday, the Institute of Supply Management’s Index fell way below projections signaling more economic weakness.

With these 2 reports, interest rates had a fantastic day on Friday and are hovering near 4 month lows.

This week’s big report is the Consumer Price Index Inflation Numbers which comes out Thursday.
Low inflation numbers will be positive for mortgage interest rates.


Our team is seeing a substantial increase in home Buying activity in January.

I’m hearing the same things happening from my Mortgage colleagues and Realtor partners.

Our mortgage applications are up 47% and our contracts accepted are up 60%.

We are also seeing higher consumer confidence in housing.

Interest rates are lower

Home prices are lower

And Seller Concessions are up.

According to Redfin, 42% of sellers offered seller concessions in Q4 of 2022.

It’s too early to say that this is sustainable, but we are seeing a shift in mindset and home buyer activity.

See consumer confidence in housing article below:


Below is the audio of the report and my favorite slides.

Rates should be 5.48% if the spread between rates and 10 Year Treasury Yield were normal. 

Rates are higher because Lenders think consumers will refinance.