Network Funding, L.P.

”Existing-home sales grew 1.3% in July to a seasonally adjusted annual rate of 3.95 million, stopping a four-month sales decline that began in March. However, sales slipped 2.5% from one year ago.”

Source: https://www.nar.realtor/newsroom/existing-home-sales-advanced-1-3-in-july-ending-four-month-skid

🎉🏡 Exciting news! We just dropped a brand new episode of Today in Mortgages and you won't want to miss it! Tune in for all the latest tips, tricks, and insights on navigating the mortgage world.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "As Rates Slide, Supply Takes a Dip"

Watch on YouTube at https://www.youtube.com/watch?v=Nm6TaVWAcPY or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

🎉 Get ready for an all-new episode of Today in Mortgages! 🏡 We're diving into the latest tips and trends to help you navigate the world of home loans. You won't want to miss out on this valuable info! Tune in now for your mortgage must-knows.

🎉 Exciting news! 🎉 The latest episode of Today in Mortgages is now live! 🏡 Join us as we dive into all the need-to-know info to help you navigate the world of mortgages.

Interest rates rose this week, with the 10-Year leading the way higher +10 bps. The 2/10 spread flirted with parity all day, ending the week 1.3 basis points inverted (10y 3.907, 2y 3.920). Some folks worry the rise in yields equates renewed fears of inflation, which is still not back to the 2% target, but with the 1-year inflation swap trading below 2% (1.889%) I believe the increase in rates is a good signal – indicating less fear of a contracting job market.

Inflation data this morning came in right at expectations with Personal Consumption Expenditure (PCE) increasing 0.155% month over month and Core PCE increasing 0.161% (YoY PCE +2.496%, YoY Core PCE +2.62%). Expectations of a 25 bps rate cut in September remained largely unchanged and November still sits at 50/50 between 25 bps and 50 bps.

Personal Spending (+0.5% MoM) outpaced Personal Income (+0.3% MoM) sending the savings rate to its lowest level since 2008.

Mortgage Applications continue to climb higher up 0.5% week over week and up 22.8% annually, but Pending Home Sales unexpectedly crashed, dropping 5.5% month over month vs expectations of a slight increase.

Next week will bring a slew of employment data which the market will be following closely. Non-Farm Payrolls on Friday morning will be the main event. Current expectations are for a gain of ~163k jobs vs 114k last month. On Tuesday ISM will release Manufacturing Employment data. Wednesday we will receive JOLTs Job Openings data. And on Thursday ISM will give us their report on Services Employment.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "New home sales grow, but building slows…"

Watch on YouTube at https://www.youtube.com/watch?v=qjJyXn-1vus or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "Starter Homes Making Up Greater Share of Home Sales in Summer 2024"

Watch on YouTube at https://www.youtube.com/watch?v=QazUeiE5lsE or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

”The median existing-home sales price bounced 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the twelfth consecutive month of year-over-year price gains.”

Source: https://www.nar.realtor/newsroom/existing-home-sales-slipped-5-4-in-june-median-sales-price-jumps-to-record-high-of-426900

Two days after the Bureau of Labor Statistics downwardly revised annual job growth by 818,000 (erasing nearly 1/3 of the jobs “created” in the past year), Fed Chair Jerome Powell spoke at the Jackson Hole Symposium stating, “the cooling in labor market conditions is unmistakable… The time has come for policy to adjust…” assuring the market that rate cuts are coming in September. The Fed's modern statutory mandate, as described in the 1977 amendment to the Federal Reserve Act, is to promote maximum employment and stable prices. While inflation data remains important, all eyes have clearly shifted to jobs data. Some market watchers have noted that this is the first time in history that the Fed has ended a tightening cycle prior to any home price easing.

Existing Home Sales were up 1.28% in July (down 2.46% annually) and remain at their lowest levels since 2010 (down 40% from the peak in Jan. 2021). New Home Sales surprised to the upside gaining 10.6% month over month and 5.57% annually.

Jobless claims rose modestly (+4k) from last week at 232,000 but remain below the 4-week average of 236,000.

Next week, we will get the 2nd estimate on Q2 GDP on Thursday and the Fed’s favorite inflation data point, Personal Consumption Expenditure (PCE), on Friday.
Equities ended the week positive and rates ended lower across the curve with the 2-year yield down 15.5 bps and the 10-year down 9.3 bps. Fed Funds Futures have priced in at least 75 bps of rate cuts for the remainder of 2024 and give a 75% chance of 100 bps of rate cuts.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "800,000 Less Jobs… Will bigger rate cuts be next?"

Watch on YouTube at https://www.youtube.com/watch?v=1E8x0DyoZwM or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

Will falling rates make homes more affordable? Yes... and no. In a market with such tight supply, falling rates will make payments at current prices more affordable, but will entice more competition on the available and drive up sale prices. In that way, rate savings may be minimized by higher home prices.

Want to hear more expert mortgage insights? Follow our YouTube and podcast series, Today in Mortgages on YouTube or your favorite podcast app.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "$25,000 Home-Buying Credit: Will It Boost or Bust Real Estate?"

Watch on YouTube at https://www.youtube.com/watch?v=dXzrsKShIQU&t=2s or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

🏡 Today's mortgage term of the day is "broker"! A third party who arranges funding or negotiates a contract between parties, but does not lend the money.

It appears the fear of out-of-control inflation is in the rear-view mirror. Producer Prices came in below expectations on Tuesday (+0.098% vs +0.20% expected) and Consumer Prices came in right at expectations on Wednesday (+0.155%). Annual inflation slowed with PPI +2.271% and CPI +2.924%.
Rates ended the week lower across the stack.

From an economic growth perspective, Retail Sales beat on Thursday showing a +1% gain month over month vs expectations of +0.2% and a downwardly revised -0.2% in June. Initial Jobless Claims also surprised positively coming in at 227k vs 234k the previous week. This propelled equity markets higher, seemingly shaking off the fear from the jobs report two weeks ago.

In the Mortgage world, applications were up 16.8% week over week with the refi index up 34%.
Housing Starts disappointed on Friday, down 6.8% month over month and the lowest annualized reading (1.234M) since mid 2020.

Next week, Federal Reserve officials will gather in Jackson Hole for their annual Symposium which will end with Powell giving a speech on Friday morning. Minutes from the previous Fed meeting will be released on Wednesday and S&P Global will release their Manufacturing and Services PMI reports on Thursday. Currently, futures traders are pricing in ~75% chance of a 25 bps cut in September, with an outside chance of 50 bps.

Don't make the mistake of cosigning during your mortgage process! It can affect your own credit and financial stability. Protect yourself and your future by staying informed and making smart decisions when it comes to home loans! 🏠💸

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "Better-than-expected PPI report reinforces upcoming mortgage rate cuts"

Watch on YouTube at https://www.youtube.com/watch?v=ASnQLMZVTok or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

Markets were somewhat saved from collapse Monday morning with the release of the ISM Services PMI which showed growth in the services sector (51.4 vs 48.8 previous). Business Activity (54.5 vs 49.6 previous), Employment (51.1 vs 46.1 previous), and New Orders (52.4 vs 47.3 previous) were all up. On the inflation front, Prices Paid were also up (57 vs 56.3 previous).
Johnson Redbook Index which tracks same store retail sales showed sales continued to grow at 5.1% annually.

Mortgage Applications were up 6.9% week over week as the MBA 30-Year Mortgage rate dropped to 6.55% - the lowest level in 15 months. Markets received an additional boost on Thursday when Initial Jobless Claims were reported lower than anticipated (233k vs 250k previous).

Despite the Monday morning carnage, equities finished mostly flat for the week. Nasdaq +0.20%, S&P500 -0.12%, Dow Jones Industrials -0.74%. The 10-Year Treasury closed the week at 3.94%, up 14 bps for the week.

The excitement will start again on Tuesday next week with July PPI which will be followed up with July CPI on Wednesday. Current expectations are for an increase in inflation month over month (0.2% vs -0.1% previous).

The market has eased on Rate cut expectations after pricing in a 100% chance of a 50 basis point cut in September on Monday. Today odds are 50/50 between 25 bps and 50 bps.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "Mortgage Rate Relief!"

Watch on YouTube at https://www.youtube.com/watch?v=NNyMNEoki1o or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "Explaining the Yen-Induced Rate Rollercoaster"

Watch on YouTube at https://www.youtube.com/watch?v=5PgLYdUZdhE or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.

Equities were down this week and bond yields fell to their lowest levels of the year. Nasdaq is down 10% from the highs in July. S&P 500 is down more than 5%. Semiconductors are down 22% and NVDA is down 20%. Economic weakness was too much to bear as the narrative has flipped from bad news is good news (earlier rate cuts; soft landing) to bad news is bad news (no growth, economic slowdown, jobs in danger; hard landing).

The jitters began on Tuesday with the JOLTs (Job Openings and Labot Turnover) survey showing fewer job openings and a lower quits rate, both showing less opportunity for workers.

Jerome Powell maintained the status quo on Wednesday as the Fed chose to keep the current level of overnight interest rates steady (5.25% - 5.5%).

The sparks really began to fly on Thursday with Initial Jobless Claims rising more than expected – 249k (highest level in a year) vs 235k the previous month – and ISM Manufacturing PMI showing a deeper contraction in the manufacturing sector than anticipated – 46.8 vs 48.5 previous, any number below 50 shows contraction and above 50 shows expansion.

The coup de grâce came this morning with the Non-Farm Payrolls Jobs Report showing 114k new jobs added last month vs expectations of 175k. The Household Survey showed 67k new jobs added. Additionally, Factory orders dropped 3.3% month over month further confirming the slowdown in the manufacturing sector.

Bonds were the big winners for the week. 10-Year Treasury yield down 40 bps on the week to 3.79% - the lowest level since Dec 2023. The 2-Year Treasury yield fell 51 bps to 3.87% - it’s lowest level since May 2023. The 2/10 spread at -8.5 bps is the least inverted since July 2022.

Futures traders are now pricing in 70% chance of a 50 bps rate cut at the Fed meeting in September and 45% chance of an additional 50 bps rate cut in November (at least 25 bps is priced in at 90%). With no Fed meeting this month, August will surely be an anxious month for the markets.

Don't make any big purchases before getting a mortgage! It could jeopardize your chances of getting approved. Let's chat about how to navigate the home-buying process and set yourself up for success. 🏡✨

Check out a new episode of our , Today In Mortgages, where we break through the hype of today's news to coach you on how to talk to borrowers about today's news in real estate and mortgages.

Today's episode: "June Broke Mortgage Records (In a Bad Way)!"

Watch on YouTube at https://www.youtube.com/watch?v=JNzb5xx6M7Q&t=102s or listen on your favorite podcast app! New episodes every Tuesday and Thursday evenings.