Monday Mortgage Minute – The evolution of personal needs financing #mortgage #rates #realestate

Here is a quick recap of what went down last week.

First on Tuesday we got the consumer confidence reading which came in better than expected and although we are still digesting everything that has occurred in the month of March, the consumer in general still has some optimism left in the tank. And the new question will be at what point could they begin to feel fatigue? I do have a sense that fatigue will begin to show in future consumer confidence readings as I have been hearing people around me grumble and utter under their breath about elevated prices everywhere they look. This will eventually reflect in the numbers even if they don’t right now.

Wednesday we got pending home sales that came in better than forecast and also still in positive territory. So even though it only expanded by .8% that was a much better reading than the – 2.9% forecasted. Like I mentioned last month when the print was 8.1% I said this would be a key marker to carry real estate and mortgage across the finish line in 2023. Keep your eyes on this reading…we will be!

Thursday we got the final quarterly GDP number which was 2.6%, just shy of the 2.7% forecast. This is a very good sign on the surface, however we also must remember that the fed is forecasting “below trend growth” in the next years ahead. This number is expected to retreat over the course of the next 12 to 24 months. Also, Additional unemployment claims came in just higher than forecast and are right around where the target number needs to be in order to achieve an increasing unemployment number for the duration of 2023. As this number continues to grow throughout the course of the year the effects and the impacts it has in the material economy will begin to show with less dollars chasing goods. The hope and intention is that products and service sectors will eventually begin to reduce prices as a result of consumer pain hitting their personal pocketbooks. It’s not upon us now, but it will have to come at some point.

On Friday the Federal Reserve’s main measurement for inflation came out better than expected. I’m talking about the Core PCE reading that was forecast to be .4% and it came in at .3%. This is a good sign because it is lower than expected and it also shows that there is plenty of work still to be done because the .3% is still in positive territory month over month and will eventually have to be a zero print and then a negative print in order to return down from our highs.

Looking ahead next week is predominantly about jobs manufacturing and services. We are going to get a whole host of data that indicates whether or not our economy is expanding in services and manufacturing while at the same time seeing what job growth or contraction is occurring with the jolts job openings, ADP non-farm employment change, unemployment claims, average hourly earnings, nonfarm employment change, and the actual unemployment rate! All of this may not move the markets that much in comparison to overall banking health and the mixed messaging The US treasury and Federal Reserve members have been making over the past few weeks, but it is advised that we still take this into consideration as they foretell what the next quarter will look like – Which will make a direct impact in mortgage rates

So what’s this all mean for mortgage rates Andy?

Mortgage rates got better last week for a few days but then revisited their most recent averages meaning that intraday repricing for the better did occur on select days of the week but in general rates ended up rebounding to where they started at the beginning of the week. This is the type of price action in mortgage rates that we expect moving forward into quarter 2 of 2023. The mortgage market has less and less participation of the Fed and more and more to do on its own. It will influence the markets as banks will have to become more appetizing with lower rates than what we’re currently seeing in order to regenerate loan business which is the primary revenue stream for banks.

We are beginning to get a lot of needs based questions from people about what they should do during this time in their personal finances and in their real estate and mortgage strategy. If you are unsure what you should be doing over the next 12 to 24 months with your property, please let us know when we can discuss this with you to create a game plan that best suits your family’s personal financial needs.

For those of you looking to purchase a home in 2023 there are new programs coming about that might help ease your entry into home ownership. If you have not yet scheduled your pre approval appointment with William or with Brian please send us a direct message or contact them directly so that we can help you best prepare for home ownership this year. You will still see that there is mild buyer competition but in general less and less overbidding and fighting over one another to get into homes.

Wherever we can help you win in mortgage and real estate we want to help you win. We want you to feel secure and confident about your financial future when it comes to your mortgage options and your real estate holdings. Tell us how we can help!

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