Where R Rates / MBS Market Update
TARIFFS, RETAIL & TREASURIES
It depends on which hat you are wearing as to how you faired last week in the markets.
From the mortgage rate side of things we did pretty well especially in the conforming markets and we shaved 4 points off the 10 year treasury note which is a good thing for mortgage rates. We had an especially good day on Friday where most of those gains came from.
If you are wearing your personal life hat then you may not want to look at your stock investments after last weeks 1,155 point drop from Tuesday to Friday. There are multiple reasons although some of the top reasons is the ongoing uncertainty of what Trump is going to do with all of these tariffs on automobiles, pharmaceuticals and lumber products. The issue is the information is limited on when and how much so that brings uncertainty.
In addition, we had retail sales come in at it’s worst reading in over two years. Retail sales index just compares the exact same week this year to last year and tells us what consumers are spending. Then Wal-Mart comes out with a doozy on their 4th quarter earnings report. As you can imagine, when Wal-Mart speaks investors and companies listen in that retail space. They had a good quarter but their outlook for 2025 was not good. Combine Wal-Mart comments backed by lower retail sales index it brought a 6.53% drop in Wal-Mart stock which equates to $8.70 drop on Thu and Fri and beat up much of the stock market last week.
Add to the mix of Trump wanting to end the Russian and Ukraine war and the geopolitics that all of that brings and it makes for an interesting week in the markets.
TODAY, we do not have much index news coming out so markets will be moved by global and domestic events and investors pre-trading in expectations of this weeks index reports coming out. We are down a little bit this morning but nothing market or rate moving.
We do have 69 Billion in 2 year treasury notes being auctioned today. Tomorrow is 70 Billion in 5 year notes and then Wednesday another auction of 44 Billion 7 year notes. These are all bond sales that can take away the demand for our mortgage bonds and the demand for those bonds can impact our rates as well.
Tomorrow we have the Home Price Index, then Thursday is GDP and jobless claims and Friday is our big kahuna for the week with PCE (Personal Consumption Expenditures) inflation index which could really move markets if it does not come in as expected.
Lets see where the day takes us my friends!
| LAST WEEK CONV 5.5% – UP 47 CONV 6.0% – UP 38 GOVT 6.0% – UP 6 10 YR NOTE – DOWN 4 DOW JONES – DOWN 1,155 |
| SO FAR TODAY CONV 5.5% – DOWN 7 CONV 6.0% – DOWN 7 GOVT 5.5% – DOWN 3 GOVT 6.0% – UP 0 10 YR NOTE – UP 1 TO 4.44 DOW JONES – UP 113 |
GREEN is GOOD for Rates – RED is BAD for Rates
Product & Guideline Highlights
WHEN A/C RUNS OUT
I had an interesting scenario that I thought would be a great opportunity to learn something knew.
The scenario was that a home had Central Air. The Central Air system did not work. In lieu of the Central A/C system they had installed A/C window units that did work and did cool the house.
Can you finance this property?
This specific scenario was for USDA. Here is the rule on USDA.
The permanent heating source must be in working / operable order , the A/C is not in working order however individual window units provided in lieu is acceptable, the buyers must sign acknowledgement to this fact and appraiser will need to comment on if the number of window units is sufficient and in working order.
I reached out to my conforming manager and asked the same question. Her response was as long as there is a working A/C and heating source then it would be acceptable. The appraiser would have to address the sources of heat and air and adjust the grid accordingly.
I then reached out on FHA and the rule for FHA is if it is included in the home then it would be required to be operational. Therefore, on FHA the Central A/C would need to be operational. Similar to with FHA that appliances are not required BUT if they are present then they must be operational.
So, what about VA? Air conditioning is not required, but if installed, must be operational. If any needed repairs to the air conditioning equipment are apparent, the appraiser must prepare the appraisal subject to the repair of the air conditioning system by a licensed heating/air conditioning contractor. Now you know : )
Jackism of the Day
WORK THIS OUT
Wonderful revelations we experience are some of the most joyous times of life. Receiving a breakthrough reality check can make a big difference in one’s life.
So, there I was. It was early morning and I was at the gym getting my workout on. Recently I had reluctantly changed my workout routine on my app that I use. I realized that as much as I don’t enjoy it I had to workout the lower body as well as the upper body and cardio.
I like upper body and cardio : ) So I modified the settings on my app to add to my workout routine. Well, there I was staring at the screen and it was making me do a lunge type set. Where you have barbells in your hands and then you have one foot forward and one foot back and you lower your knee down to the ground and back up. Wow! I was not very good at that. Just sayin.
Side note: In case your curious I use Gymverse App. Really great app if you want to input the info of everything you want and outcomes a routine you can do in your home, local gym or wherever you are : )
It was at that moment that I saw the light of something I do not preach too often. I am a big believer in taking your strengths in life and maxing them out. If you are great at something and have a platform to do it then do it better than anyone else out there. I guarantee you will get ahead. As to your weakness, do not focus on them. If you stink at something and you don’t enjoy it then you really do not need to focus on it.
This works in business and especially in sales. Why? Because if you are great at presenting loans to clients and at marketing but are the absolute worst at detailed work then pretty please with sugar on top go be an originator and keep your stinking hands off the area of processing. You are just going to mess it up.
Same goes if you are highly detailed and love structuring a file to reach maximum efficiency but the thought of talking someone in to a loan makes your hair stand on end then for the love of the Lord please don’t try to be an LO. You are going to hate it and likely be broke.
That is what I am talking about with focusing on your strengths.
In the case of my workout routine though. It was at this point the truth that we are only as good as our weakest link. This does have truth in many areas of our lives. If the only thing I worked on was my upper body, core and cardio which really need a lot of work. Then I ignored the entire lower body. I would literally have nothing to stand on or to support what I am trying to do.
Your lower body which in this workout includes back, cardio, legs and everything that gets you from point A to point B is necessary to have a well rounded and full physical lifestyle.
If you do not work out the areas of weakness in your life that you need to sustain your strengths then you will never be able to advance in other areas of your life.
If you are a great provider for your family but a cruddy husband/wife or father/mother then what’s the point of providing for them. A HUGE PROBLEM in society today is parents who give absolutely everything they have to their children and leave their spouse hung out to dry which will never create a solid family and end in divorce once the kids are gone.
The number of times I have heard my kids come first is too many. It genuinely breaks my heart. Your kids are around for a very short period of time. Value this time, enjoy this time, use it to fully immerse yourself in what it means to be a family. But do not sacrifice your marriage for the sake of your kids.
#1 is my walk with Christ.
I cannot love my wife the way I love her unless I love Him First.
#2 is my love for my wife.
I cannot care for my children near as well if I do not have a strong united relationship with my wife first. Everyone suffers when a marriage is not prioritized.
#3 – is my love for my children.
Because I have a firm foundation in Christ which leads me to cherish and love my wife, this allows us to be a light and an example to our children to be the absolute best they can be.
What areas in your life do you have great strengths that are being broken down by the weaknesses that are suppose to support these areas. We all have them. Lots of them. I know I do.
Don’t forget to workout the weaknesses to maximize your strengths and be the best you that you can be.
