Matt Hergert -Xpert Home Lending

Every Monday I send out a newsletter on the market pertaining to interest rates. If you would like to be on it please message me with your email. FB won't let me post graphs in the text so with email you will get the full letter.

Newsletter - 10/21/2024

Week of October 14, 2024 in Review

New home construction eased in September, but home builders are feeling more positive about the future. Here are these headlines and more:

-Home Builder Confidence Rises for Second Straight Month

-New Construction Slowed in September

-Retail Sales Beat Estimates

-Jobless Claims Suggest Weakness in Labor Sector

Home Builder Confidence Rises for Second Straight Month

Easing inflation and the anticipation of falling mortgage rates have led to an improvement in home builder sentiment, per the National Association of Home Builders (NAHB), who reported that their Housing Market Index increased two points to 43 in October.

What’s the bottom line? While home builder confidence remains below 50 in contraction territory, it has risen for two straight months after declining throughout the spring and summer. October also brought improvement in all three index components (buyer traffic, current and future sales expectations). Builders are clearly feeling better about the housing market over the next six months, as future sales expectations jumped 4 points and further into expansion territory above 50.

NAHB Chair, Carl Harris, confirmed that “builders are feeling more optimistic about 2025 market conditions.”

New Construction Slowed in September

Housing Starts eased from August to September, as the small increase in single-family home building was outweighed by a decline in multi-family projects. We saw a similar pattern in Building Permits, which are the forward-looking indicator for new home inventory. Single-family completions also declined for the month, which will not help on the inventory front.

What’s the bottom line? While builders are feeling more confident about the future, new home construction is still not keeping up with demand. This limited new supply relative to household growth should continue to support home prices.

Retail Sales Beat Estimates

Retail Sales rose 0.4% in September, above the 0.3% gain the market was expecting. The Core reading, which gets plugged into GDP, rose a much stronger than expected 0.7%, which may lead to stronger GDP estimates down the line.

What’s the bottom line? Overall, the sales figures for September show that consumer spending remains resilient, and strong spending is expected to continue this holiday season. The National Retail Federation (the world’s largest retail trade association) has projected that holiday sales are expected to increase between 2.5% and 3.5% compared to last year.

Jobless Claims Suggest Weakness in Labor Sector

Initial Jobless Claims fell 19,000 in the latest week, with 241,000 people filing for unemployment benefits for the first time. Continuing Claims rose by 9,000, as 1.867 million people are still receiving benefits after filing their initial claim.

What’s the bottom line? Initial Jobless Claims have been volatile in recent weeks, as the hurricanes have caused a spike in filings to the highest levels since July. Though it’s important to note that we’ve seen an uptick in claims among non-hurricane impacted states as well, which points to some weakness in the labor sector.

Meanwhile, Continuing Claims also rose to their highest level since July and are near highs from November 2021. This data continues to suggest that employers have slowed down their pace of hiring, and people are collecting benefits for longer periods of time.

Family Hack of the Week

These Cranberry Orange Scones courtesy of Allrecipes make for a delicious treat all season long. Yields 12 scones.

Preheat oven to 375 degrees Fahrenheit. In a large bowl, stir together 2 cups all-purpose flour, 1/4 cup packed brown sugar, 1 tablespoon baking powder, 1/4 teaspoon ground nutmeg and 1/4 teaspoon salt. Cut in 1/4 cup butter (chilled and diced) until mixture resembles coarse crumbs. In a separate bowl, toss 1 cup fresh cranberries (roughly chopped) with 1/3 cup sugar. Add to flour mixture along with grated zest of 1 orange and 1/2 cup chopped walnuts. Mix lightly.

In another bowl, beat together 3/4 cup half-and-half and 1 egg. Slowly pour in dry ingredients and mix until dough forms. Knead dough 4 or 5 times, then divide dough in half and turn out onto a lightly floured surface. Shape each half into a 6-inch circle and cut each circle into 6 wedges.

Place scones on lightly greased baking sheets and bake until golden brown, about 20 minutes.

What to Look for This Week

Look for an update on September’s Existing and New Home Sales on Wednesday and Thursday, respectively. Thursday also brings the latest Jobless Claims report.

Technical Picture

Mortgage Bonds ended last week just above support at the 100-day Moving Average, which has been holding. If Bonds are able to improve this week, there is a lot of room to the upside before reaching resistance at the 50-day Moving Average. The 10-year ended last week in the middle of a range between resistance at 4.126% and support at the 100-day Moving Average.

89.99% CASHOUT with NO MI
Pay off those high interest credit cards!
Call me to run the numbers and see if it works for you.

0% Down Payment
Call me for more information

Winter is right around the corner. If you’re looking to move before the snow starts flying, call me today. You could be enjoying a scene like this in 20 days or less.

Own the key to your forever home without emptying your savings account. Unlock the possibilities with no upfront down payment. Contact me now!

If you plan on using funds from a family member or friend for your down payment, let us help you through the process and get you into your new home. Our team is experienced in securing loans with gift funds, so don't hesitate to reach out with your questions.

Are you all set to make a splash in the property investment pool? The right loan, tailored to your needs, might be your diving board into this rewarding venture. Contact me.

Running out of space in your apartment? Trade in the shared walls and cramped rooms for a place you can call your own. Why shrink your lifestyle if you don’t have to? Call today to explore your options.

In honor of National Farmer's Day, let's find you a home, complete with a bountiful backyard garden. Ready to harvest the fruits of homeownership? Reach out to us!

Why use a mortgage broker? We work for you, not the lenders. Our job is to find a great mortgage deal based on your individual circumstances. Message us.

Closing costs are fees and expenses you pay when finalizing your mortgage, separate from your down payment. These can include appraisal fees, title insurance and more. Knowing what to expect can help you budget for this important part of the homebuying process. Call us for more information.

Considered FHA loans? They're a great option for first-time and repeat buyers alike. Let's talk about your possibilities.

One of the key benefits of VA loans is the limit on the amount of closing costs you can be charged. This can make the homebuying process more affordable. Contact us.

If you’ve dreamed of a home in the country, a USDA loan could be the perfect loan option for you. Plus, no down payment required means big potential savings. Ready to learn more? DM me or call today to find out if you’re eligible.

Tired of the noise from the upstairs neighbors? Move from the limitations of renting to the freedom of owning. Call us now.

Ever wonder how your mortgage interest rate is determined? Factors such as market conditions, your credit score and the type of loan you choose all play significant roles. Being well-informed can help. Call me to navigate your mortgage journey more effectively.

Want to cut the red tape in your homebuying journey? An appraisal waiver can eliminate the need for a home appraisal. Let’s chat about how this could speed up your path to homeownership. DM me!

Feeling puzzled by mortgages? Let us piece together a great deal that could save you thousands. Make the first move and reach out.

Your equity has been silently growing, like a secret garden. A cash-out refinance allows you to harvest the fruits of that growth. Payoff debt, expand your home, buy an investment property for wealth and many other reasons. Let's explore what that means for you. Contact me!

Are you eager to have a kitchen that fits all your cooking gadgets? Let's upgrade your counter space while we're at it. Reach out today!

Now’s the time to sell your current home and buy your dream home. Call me today to learn about your options!