Where R Rates / MBS Market Update
VOLATILITY HITS MARKETS
This mornings initial rate sheets will be about the same as yesterday’s initial rate sheets. As expected with the ISM report I discussed yesterday and the increase of job openings the markets began to slide yesterday unfavorably to the mortgage rates market. Inflations and more jobs = bad news for mortgages. We took a hit yesterday and have made up some ground this morning over the last 20 – 30 minutes. Govt will be up about 15 BPS depending where you are on the rate sheet.
We also had a bad showing of demand for the 10 Year Note Auction yesterday causing some additional sliding yesterday afternoon. Stocks are taking a hit yesterday and today. A lot of that is to do with inflation potential from that ISM report showing inflation in manufacturing.
Evidently everyone is out buying a bunch of EV cars and parts before Trump takes away some of the bonuses for purchasing them as well as the Tariffs that could hit once the cost to import increases. Much more to it than that but that is what some of it is evidently.
Tomorrow the stock market will be closed and the bond market will close at 2 PM Eastern for the Jimmy Carter day of mourning.
The average 30 year fixed rate went from 6.97% to 6.99% week over week. We saw a drop of mortgage applications to the tune of 3.7% week over week. If you are curious what to focus on. Applications to purchase a home fell by 7%, although applications to refinance a home rose by 2%. Credit card bills will be coming due soon for unwise Christmas shoppers. Go get em folks.
On the jobs report front we had private business payrolls come out from ADP. 122K new jobs were created month over month. That is the least in 4 months and down from 140K last month so that is good news for mortgages. Not market moving so much but combined with other items it can help.
Just in case you’re curious and want another nugget to throw out there in conversations. Month over month used car prices are down .3% and year over year they are UP .4%. Not much change in that arena.
At 1:00 we have a 30 year bond auction which we hope will find some demand after yesterday’s dismal 10 year bond auction. We also will have the release of the FOMC (Federal Open Market Committee) aka The Fed minutes at 2:00 today. That will stir up some conversations as we have more Fed Speakers out there talking.
Other than that keep the compass headed North and go make a difference in the lives that you serve today.
| YESTERDAY CONV 5.5% – DOWN 22 CONV 6.0% – DOWN 13 GOVT 5.5% – DOWN 15 GOVT 6.0% – UP 0 10 YR NOTE – UP 5 TO 4.68 DOW JONES – DOWN 178 |
| SO FAR TODAY CONV 5.5% – UP 6 CONV 6.0% – UP 10 GOVT 5.5% – UP 12 GOVT 6.0% – UP 19 10 YR NOTE – UP 1 TO 4.69 DOW JONES – DOWN 179 |
GREEN is GOOD for Rates – RED is BAD for Rates
Product & Guideline Highlights
TERMITE INSPECTIONS
The age old question of do I need one or not? It can definitely get a bit confusing as to when it is required as it seems it randomly pops up from time to time.
Today, I wanted to give you an idea of what and when one is needed for each agency.
FANNIE AND FREDDIE
Only required when appraiser or other third party inspection notates termite issues.
If the appraiser notices termite issues and comments on them. The appraiser is the one that puts a value and the marketability impact depending on what they find.
It is up to the lender to prove that the termite problems have been repaired and corrected. It is the corrected part that can get you sometimes. Just treating termites does not necessarily mean the damage they created has been corrected.
SIDE NOTE: Fannie and Freddie do not require although some states do so state requirements could trump agency requirements.
FHA
EXISTING PROPERTIES – If the appraiser calls for a termite inspection then the seller must provide termite inspection. If any past or present damage is found it must be proven that it has been treated and repaired.
NEW CONSTRUCTION – Forms 99-A and 99-B must be completed by builder to prove termite protection and if required. Not required if property is made of steel, masonry or concrete.
SIDE NOTE: There are areas that FHA does not require termite inspections. None of them are in the South though. In case you are curious. Here is where you do not need one.
EXEMPTION TERMITE AREAS
VA
VA also has a probability map. If the map shows very heavy or moderate to heavy then one is needed. Down here in the SouthEast that pretty much means it is always needed regardless of if the appraiser calls for it or not.
VA TERMITE PROBABILITY MAP
For New Construction soil treatment is preferred and allowed.
Each Regional VA Loan Center may have different requirements.
USDA
Termite inspections are not required unless the appraiser, inspector or state requires an inspection.
Appraiser would request if they find potential termite activity. Must prove it was treated and repaired if necessary.
Jackism of the Day
BLANK PAGES & OPEN WINDOWS
Every year my pastor makes it a point to encourage everyone to pick a word for the year. One word that describes your mission, your drive for the new year.
In the past I have used peace, trust, presence as some of my words for the year. All of them revolve around my faith and this year really is no exception. Although, I completely disobeyed my pastor.
I said this year it cannot be a word. The reason is because this phrase really defines the type of year I want to grow in.
Blank pages and open windows. We are only on the 7th of the month and it has radically changed my mindset and I am truly enjoying spending time pondering and thinking about what this means for me.
The meaning behind it is my future. Today, tomorrow, this week, next month, next year and for the rest of my lifetime. The story has not been written yet. The pen has not transcribed the words. The book is wide open to write my future the way I will allow it to be written.
Regardless of what is written in Jack’s book of life to date does not have to dictate what will be written as I move forward.
The open windows is allowing new ideas, different thoughts, open mind to what may blow in through my window on any given day and I can take ahold of it and do with it as I please.
This is not just about being able to write my own future. It is all about not allowing the world or others to write it for me.
Here is an example. I am the President of our HOA of 88 units in a Townhouse community. We are in quite the pickle due to our insurance renewal, roof repairs that are needed, a contractor not honoring their workmanship and a lawsuit looming in the near distance and all of this is on my shoulders to work out in a very short amount of time before things begin to happen.
Blank pages and open doors allows me to think outside the box. It gives me the opportunity to make the phone calls I need to make, the actions that should take place, going after the needed results using completely different tactics than I or the world would normally take. It allows me to trust and not stress because the story is not written yet. What is to come will come and it is an opportunity to write the ending of this chapter in whatever way we decide to write it.
That is exactly what I have done and the pieces of the puzzle are coming together in a manner I never thought would happen. It was strictly due to me saying to myself I am going to move forward and choose a few different options and act on them and act on them quickly. I was doing it the right way. Although, the issues are not completed we do have a path forward that I never thought would happen before I allowed my mind, my heart and my actions to not already be decided by the status quo or by others. The pages of how we would move forward was blank and I am writing the words in a new and different way than I thought.
What would your one word or one phrase for the year be for you? What is that one driving force that you want to influence your life this year? It’s not even a New Years Resolution. It is a New Years Why if you will.
Without focusing on something it is difficult to move in a different direction. What have you had your eyes set on to expand your mind to a different way of Why that will give you the abundant life you truly desire to live?
Ponder, think, meditate, pray or do whatever it is you do and see what you come up with. Just make sure it is powerful enough to make you want to move mountains to make it happen.
