TODAY’S RATES & HOUSING NEWS

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Mortgage rates have risen quickly over the past few weeks in conjunction with the U.S. Government working on a debt ceiling deal.

The U.S. Government has never defaulted on debt, and the debt ceiling negotiations are about raising the amount of money the government can borrower to maintain operations and pay off it’s debt.  A default would have huge consequences.

A deal in principle was announced late last week and now both sides have to work on passing the bill in Congress so the bill can go into effect before June 5^th, which is the date Treasury Secretary Janet Hellen imposed as the drop date when the U.S. would default on it’s bills.

The average interest across America pushed over 7.1%.

Below is our Green Home Loans Average Rate Sheet compared to the National Average.

The hope is that interest rates will improve with the debt ceiling deal announced, and the initial results are encouraging.

On Tuesday early morning, the Mortgage Backed Security market is trading up 33 bps.

Matthew Graham from Mortgage News Daily states the rise in rates has more to do with economic reports and future FED actions than the debt ceiling.  Inflation has not dropped as fast as many had hoped and there is an increasing chance that the FED will again raise the Federal

Funds rate in their June meeting.

There are a number of important announcements coming up that could affect interest rates starting with Friday’s U.S. Jobs Report.

2 weeks later we have the CPI (Inflation Report), immediately followed by the FED’s announcement.

Below is a good article explaining current rate and market conditions:

https://www.mortgagenewsdaily.com/markets/mortgage-rates-05262023

INTRODUCING NEW 1% DOWN GRANT PROGRAM

Excited to announce a new 1% Down Payment Program that is a True Grant – meaning the down payment assistance is not a 2^nd mortgage

Many Mortgage Brokers won’t have this product based on who they choose to partner with.

Here is how it works:

Customer completes a loan at 95-97% Loan To Value – typically 97%

There is a 2% Grant and the client’s down payment is 1% + costs/prepaids.

NO MONTHLY MORTGAGE INSURANCE – this is huge as PMI is a significant cost at 95-97% Loan to Value.

$350K MAX LOAN AMOUNT

80% AREA MEDIAN INCOME OR BELOW

Here is the Area Median Income Look-Up Tool if you would like to look it up or email me and I can tell you what it is in your county.

https://ami-lookup-tool.fanniemae.com/amilookuptool/

TODAY’S RATES & HOUSING NEWS

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Average mortgage interest rates jumped up last week about .3%.  The average 30 year fixed conventional interest rate went from 6.67% to 6.95%. 

Below is our Green Home Loans Average Rate Sheet compared to the national average.

Below is the Mortgage Backed Security Market (MBS) and you can see that it is sharply down over the past 7 days. This downward trend pushes rate pricing higher.

Rates for many customers locking today are in the 7%’s depending on credit and cost scenarios.

INTRODUCING NEW 1% DOWN GRANT PROGRAM

Excited to announce a new 1% Down Payment Program that is a true grant – meaning the down payment assistance is not a 2^nd mortgage

Many Mortgage Brokers won’t have this product based on who they choose to partner with.

Here is how it works:

Customer completes a loan at 95-97% loan to value – typically 97%

There is a 2% grant and the client’s down payment is 1% + costs/prepaids.

NO MONTHLY MORTGAGE INSURANCE – this is huge as PMI is a significant cost at 95-97% loan to value.

$350K MAX LOAN AMOUNT

80% AREA MEDIAN INCOME OR BELOW

Here is the Area Median Income Look-Up Tool if you would like to look it up or email me and I can tell you what it is in your county.

https://ami-lookup-tool.fanniemae.com/amilookuptool/

IS YOUR LOW RATE PREVENTING YOU FROM BUYING A NEW HOME?

Many clients we speak to may want to purchase a different house or move their family, but they won’t do it because they have such a great rate on their first mortgage – typically in the 2% to 3% range.

We hear this every day.

In the video below, our partner Jeff Quincey explains how the Blended Rate including other consumer debt could be quite a bit higher.

If you take into account everything that you can pay off when you sell, the rise in rate and payment is much less.

I highly suggest you watch the video below.

https://vid.us/v5bs1p

https://m.bixel1.net/6zaltt

Average mortgage interest rates are slightly higher over the last 7 days.  The average 30 year fixed conventional interest rate went up .02% from 6.65% to 6.67%.

Below is the Green Home Loans Rate Average Sheet compared to the National Average.

The anticipated inflation report came out May 10^th. 

The results were good but not as good as Barry Habib initially expected due to a variety of factors mentioned last week.

Inflation went from 5% to 4.9%.

Core Inflation (minus food and energy) went from 5.6% to 5.5%.

The most significant inflation figures we are seeing show shelter costs are no longer accelerating.

Shelter costs make up a big portion of inflation and the shelter costs have appeared to hit a ceiling and will likely start moving down.

Barry Habib predicts that inflation will drop to 3.5% to 3.7% by the mid July inflation report.

That would be HUMONGOUS for interest rates. 

See Instagram video below:

We expect almost all of our clients that are closing loans right now to refinance in 6 months.

We offer a Green Home Loans Loyalty Discount on rate pricing and fees so customers can take advantage.

As Barry Habib mentioned in the video, we expect the Real Estate market to heat up.

We are already seeing multiple offer situations today.  If rates drop deep into the 5%’s, it could be a repeat of the frenzy we saw in 2020 through mid 2022.

There is simply not enough inventory if demand dramatically increases. 

Multiple Offers Over List

Sellers Dictating All Terms

High Appreciation Due to Competition and Low Inventory

FHA and VA – Retail vs. Wholesale

One of the biggest differences we have seen from moving from a Retail Lender to a Mortgage Broker is the

extreme difference in rate and price, especially on FHA and VA Loans.  We can offer better rates on Conventional Loans too,

but the difference with Government Loans is staggering.

We were competing with a local Retail Lender this week on a FHA/VA Loan.

We beat the other lenders quote: 

1% Lower in Rate

With Lower Closing Costs

If you are sending your FHA/VA clients to a retail lender, I would strongly suggest getting a 2^nd opinion from us.

I can 100% guarantee that your clients are not getting the best rate/payment/costs. 

You can always use our Free Mortgage Quote page to get a quick second opinion for you or your client.

MONTHLY MARKET REPORT

Here is the audio of Keeping Current Matter’s May Monthly Market Report: 

Below are my favorite slides from the report.

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TODAY’S RATES & HOUSING NEWS

Average mortgage interest rates are slightly lower over the past 7 days.  The average conventional interest rate across the country went down .08% from 6.73% to 6.65%.

Below is the Green Home Loans Rate Sheet compared to the national average.

Lots of news since our last update.

The FED raised the Federal Funds Rate another 25 bps as expected.  This was the 10^th raise in a row putting the Federal Funds Rate at 5-5.25%.  The language from their statement suggests that we could be close to the end of rate hikes.

On Friday, the U.S. Jobs Report was released and job creation blew out estimates.  253,000 new jobs were created in April compared to an estimated 180,000. The BLS did revise February and March lowered by 149,000.  When accounting for the revision of prior months, the net gain was 104,000. 

With all this data, the markets remained relatively calm and interest rates didn’t move much on the week.

Leading Mortgage Rate Prognosticator Barry Habib has been pointing to May 10^th as a day that we would finally see the headline Inflation numbers drop due to lagging data.  Barry is backing off seeing a large inflation drop on May 10^th due to a number of factors.

#1 – The BLS lowered the inflation number in April 2022.  The yearly inflation number is 12 months added together, so by replacing April 2022’s number with a lower

April 2023 number, inflation year over year will drop.  The problem is because they have lowered April 2022’s number, it’s less likely that April 2023 will replace April

2022 with a lower number.

#2 – During April 2023, there was a spike in oil prices which will be reflected in the Inflation report this Wednesday.

He does predict the inflation numbers to drop, but it may take longer than he expected. He argues that mortgage rates follow inflation and as inflation numbers drop – so will interest rates.

HOME PRICES RISE 1.6%

CoreLogic reported last week that home prices in March 2023 were up 1.6% from February 2023,

and  3.1% year over year.  Let’s put that in perspective.  1.6% appreciation in one month equates to 19.2% over 12 months. While we don’t expect 1.6% to be the norm, the data supports that the national housing market is rebounding.

Per Chief Economist for Corelogic, Selma Hepp – “While housing markets across the country continue to send mixed signals, prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains.  At 1.6%, the month over month increase was twice the average seen between 2015 and 2020.”

Corelogic has also increased their forecast for monthly appreciation to go up .8% from March to April 2023, and up 4.6% from March 2023 – March 2024.

In real numbers, that equates to a $300,000 home increasing in value by $13,800 to $313,800.

TODAY’S RATES & HOUSING NEWS

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Average mortgage interest rates across the country ticked up another .14% over the past 7 days.

The average interest on a 30 year fixed conventional loan is now 6.73% and with that rate customers are usually paying discount points.  

Below is the Green Home Loans Rate Sheet compared to the national average.

We expect the FED to raise the Federal Funds Rate another 25 bps on Wednesday, May 3^rd.

Of more importance to Mortgage Rates is the hints the FED gives on future actions. 

When will the Federal Funds Rate hikes slow or stop? 

We also have the April U.S. Jobs Report coming out on Friday, May 5^th, which can have a major effect on mortgage rates.

Lastly, the day Barry Habib has been pointing at for months (May 10^th) is finally almost upon us.

Barry expects that the inflation averages will finally start to show the full effect of the Fed’s policy.

Mortgage rates follow inflation, so if inflation drops rates should improve.

INTRODUCING THE 5 DAY HELOC

While the FED’s rise in rates doesn’t correlate directly with Mortgage Rates, it does directly affect the rates and payments of

consumer debt like auto loans, credit cards, personal loans, etc.  These payments are the highest levels we’ve seen in years.

Many clients have a lot of equity in their home and want to use it to pay off high consumer debt.

The problem is that many clients have first mortgage rates they don’t want to touch.

We have a New Program called the 5 DAY HELOC that can help a lot of consumers.

We can have clients fill out a quick application and we would execute a soft pull on their credit.   

We can then forward a link to our client to qualify, pick out terms, and fund a HELOC in 5 days without an appraisal.

If you are struggling with consumer debt payments or want to explore using your equity for additional cash to pay off expenses,

please reach out to me directly or you can start an application at: 

www.applywithgreen.com

In the comments of application, include that you are trying to qualify for 5 DAY HELOC.

Reggie Green / 480-206-5577

IMPROVED AFFORDABILITY MOTIVATING HOMEBUYERS

Mortgage rate improvements in Quarter 1 of 2023 have led to more and more buyers engaged and actively looking to purchase. 

Active buyers have increased in every region of the country and with the higher demand comes increased competition and more seller leverage.

We are also seeing homebuying take longer with the increase competition and low inventory.