Jason T. Haugh - Mortgage & Banking Services

Fed Can’t Get it Wrong Again, Doubts are starting to Loom cut this year

We will get a new perspective on the outlook for rates this coming week with Wednesday’s release of the consumer-price index.

The Fed can still cut rates in June. Speculation that there could be no interest rate reductions this year has been growing, although economists remain divided.

If the Fed does nothing because inflation rebounds or stalls before falling to the Fed’s 2% target—that would be cause for concern. Inflation has cooled significantly from 40-year highs

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

Market Update – What is up with Rates?
Mortgage rates are anticipated into the low 6’s through the end of this year. Cautiously optimistic, rates at the start of 2025 will be in the high 5’s.

Forecast from Industry Peers from late 2024 through early 2025:

Fannie Mae 2024 – early 2025. 6.2% – 5.7% respectively.
Mortgage Banker’s 6.1% - 5.% respectively.
NJ Home Builders – 6.39% - 5.57% respectively

Affordable Housing: Private Developers Are Rejecting Government Money

By forgoing government assistance and the many regulations and requirements that come with it.

Some affordable-housing veterans worry whether private construction can scale quickly enough to match the scope of the demand problem and whether its backers will maintain their commitments.

Happy St. Patrick’s day! Be safe! The leprechauns will be out in full force today!

Watch New Housing Data!

A lot of housing data this week, along with the usual Fed officials out speaking. There are also a handful of economic reports that markets will be watching, as well as Friday's PCE inflation data.

Fed futures continue to tell a bleak story, pushing back Fed rate cuts now into June or July. It was only a few weeks ago that markets were all but assured that the Fed would be forced to start cutting in March and would have to keep cutting as the year went on.

Markets are 60/40 that the Fed will cut rates in March

Betting on the Fed to slow down the pace of selling off its balance sheet (quantitative tightening, which pressures mortgage rates higher with more supply and less demand).

It is still too early to declare victory over inflation and that the Fed should be slow to start cutting rates, but markets keep shrugging it off.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

Happy New Year! I hope that you have a wonderful 2024, Please Stay Safe!

I hope that everyone has a very Merry Christmas and Happy Holidays!

I am more a palm tree kinda guy, but welcome 1st Day of Winter!

Rates are Lower, So is Inventory!
We've now seen rates come down as I had anticipated end of 2023 into 2024. Rates however do not seem to be the current issue.

Home Buyers Are Ready to Buy. But Sellers Aren’t Selling. Owners are feeling too fond of the low interest rates on their existing mortgages.

The lowest mortgage rates since the summer are starting to lure frustrated home shoppers back to the market. The problem is that few homeowners who have locked in much lower rates appear ready to sell. After a boom in home purchases and refinancing’s when rates were near a bottom, more than 32 million homeowners have mortgage rates below 4%, according to Intercontinental Exchange.

In a sign of how much consumer expectations have changed, a mortgage rate near 7% is now attracting buyers, while a 7% mortgage rate in late 2022 led to a sharp drop-in sales activity.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

The rally that started at the beginning of November, continues to stay steady. We could see rates improve; unless we get a surprise market shot.

Consumer prices picked up in November, with the core reading coming in at 0.3% after coming in at 0.2% in October. The year over year core was 4.0% for a second month.

The year over year core was 4.0% for a second month. Although inflation has pulled back from the highest levels in 2023, the still strong labor market and resilient economy means it isn't likely to move much lower yet.

The outlook remains that things should be pretty quiet ahead of the holiday, despite tomorrow morning bringing in jobless claims, durable goods, and consumer sentiment data. If the data came in strong enough to make some waves, any moves we do see are likely to be short lived. However, if the data comes in showing a bit of weakness, we could see it help bonds have a great day. Be ready for lenders to be a bit more conservative on pricing tomorrow though, ahead of the holiday.

I wanted to share some information that indicate support for lower interest rates.

Despite the conflict in the Middle East, oil is showing signs of healty supplies and rising stockpiles and crude prices are on a run of four straight weekly declines - the longest streak since May. Lower oil prices as we head into winter means lower prices at the pump and lower heating oil bills, which is good for the fight to bring inflation down and good for rates.

G’mar chatima tovah

This little guy. He is so awesome. I remember making a fort when I was a kid.

Almost 🧨 time. Mini show until Beck and Linden.

Happy Mother’s Day to My Mom and Steph for being such a great mom to our kids.

Me and my little guy. First time playing tennis. I have not played tennis in 10 years.

Higher Rates Hurt but Provide Window of Opportunity

While the recent spike in rates can be a deterrent for potential buyers, it also provides an opportunity. There is less competition.
currently and buyers can use this high-rate environment to garner price discounts and seller concessions, where they can likely.
get their 2-1 buydowns or permanent buydowns paid for.

Additionally, because of very low inventory, there is an opportunity to see price appreciation once rates come down and demand picks back up.
How low is inventory? The latest figures for active listings show that they have decreased to only 578,000 homes, which is not far off record low levels.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

Today We Honor All Who Served. Thank you Veterans!

Will Fed Back Down?

Topic 1:
We know the Fed will be hiking 75bp at today's meeting, but the question at hand is whether the Fed will follow some of the other central banks who have started to slow down the pace of their rate hikes in December. Earlier in the month, the Fed mole, Nick Timiraos, said that the Fed will likely use today’s meeting to prepare the markets for a 50bp in Hike in December, which could be the first sign of a Fed pivot, as many members of the Fed showed concerned that they were doing too much, too fast, without realizing the true impact of the rate hikes.

Topic 2:
ADP released their employment report, which showed that there were 239,000 job creations in the month of October, which was stronger than expected. There was a negative 16,000 revision to September, which tempered a bit of the optimism.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

GDP Higher but It’s Just a First Read

Topic 1:
The advanced, or first reading of Q3 GDP, showed that the US economy grew by 2.6%. This was better than the 2.3% expected and follows two consecutive negative quarters in Q1 and Q2. It’s important to remember that this is the first of three readings, and there can be significant revisions.

Topic 2:
Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, increased 3,000 to 217,000. Continuing Claims, or those that continue to receive benefits after their initial claim, rose 55,000 to 1.438M and has been significantly rising over the past few weeks. Bottom line, initial claims remain quite low, as employers continue to hold on to workers. The rate of hiring is the first to slow in an economic downturn, followed by layoffs. Next week’s payroll forecast is 190k, which would be the slowest since a negative print was seen in December 2020.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

Happy Diwali from Jason Haugh & Family!

U.S. Home Sales Dropped for Eighth Straight Month in September.

U.S. existing home sales fell for an eighth straight month in September as rising mortgage rates made home purchases less affordable.

Sales of previously owned homes declined 1.5% in September from the prior month to a seasonally adjusted annual rate of 4.71 million, the weakest rate since May 2020, the National Association of Realtors said Thursday. September sales fell 23.8% from a year earlier.

Bond Market Volatility is Crazy

Topic 1:
The Bond market volatility has been crazy – You may be familiar with the VIX index, which measures Stock market volatility. There is also a MOVE index, which measures Bond market volatility. It has skyrocketed to the highest levels we have seen since March of 2020, when we had a pandemic and the Fed stepped in to try to help and did massive amounts of purchasing.

Topic 2:
The Fannie Mae Home Price Index was released yesterday, showing that home prices rose 0.2% in Q3 from Q2 and are up 13.2%
year over year, which is down from 19% in the previous quarter on an annual basis.

For more information, please call or email me. 856.741.2500 (c) | [email protected] | NMLS 761771 | Equal Housing Lender

Happy Indigenous Peoples Day & Columbus Day!