Market Update
Words from our Lender, Ronnie King with Elite Lending Team
Happy Monday!
Finally, some good news as we start the week. After the inflation report came back last Thursday much better than anticipated, we saw a HUGE rally for mortgage bonds. We gained 206 basis points in that one rally helping rates improve by nearly .75%!! Of course, it is a bit natural to see these bonds pullback a bit today. We are starting the week off floating all loans. If we continue to see inflation decrease, the Feds will eventually start to pump the brakes on their hikes. With that said, they will need to see a continued decline before they even think about acting!
We all know that the labor market is a major lagging indicator. However, look at the summary of some of the layoffs announced this year. These numbers will eventually hit the unemployment statistics.
Twitter cutting 50% of its workforce (3,700 jobs). Facebook cutting 13% (11,000 jobs), Snap cutting 20% (1,200 jobs), Shopify 10% (1,000 jobs), Netflix (450 jobs). 2nd round of layoffs, Microsoft 1% (1,000 jobs) Salesforce (1,000 jobs), Robinhood 31%, Tesla 10%, Lyft 14%, Redfin 13%, Coinbase 18%.
With that said, here are a few companies adding some additions to cuts: Amazon has announced a hiring freeze, Apple has paused almost all hiring and google is reducing hiring bay 50%.
We have a busy week ahead with news! The Producer price index will report tomorrow. Wednesday we have mortgage application, retail sales, NAHB housing market index and the 20-year auction.
Thursday, we have housing starts and stops & initial jobless claims. We end the week Friday with the existing home sales!
As of this morning:
Conventional loans under 647K are at 5.99% - 6.125%
High Balance loans up to 879K 6.75% - 6.99%
VA & FHA loans range 5.75% -6.125%
As always, I am here to answer any questions you have! Please do not hesitate to reach out.
Ronnie King -Brand Manager
(858)519-7091
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