2022 Monday Economic Recap 8.1 – 8.5

Jobs Friday Report: difference between job creation. 528K new jobs vs…

• Business Survey showed 528K new jobs vs
• Household Survey (CPS) showed 179K
• Skews numbers as business survey takes into account someone starting new 2nd job which may be part time so throws the numbers.
• Bond Market didn’t like this which as we know typically correlates with mortgage rates and mortgage rates Friday took a pretty good hit for the worse.
• Example of Adjustment in Rate: 500K loan for a no cost rate when looking at same rate may have cost roughly $3K for same rate from day prior, Thursday.
• Rate movement projection
  • Feds goal still to nip inflation in the butt which is why federal funds rate is still increasing. (note: effects consumers by increase in rates on cc, helocs, etc…)
  • Interest rates dropped late July; however saw a small uptik as of late due to job reports.
  • Using same $500K loan, month over month the estimated pmt savings is roughly $200 p/mo – thus increasing affordability
• Quick Takeaways – Facts (Move to new post)
  • Housing Market Strength: 40% equity
  • Don’t treat your house as only an investment, another words don’t freak out about market.

  Time Stamps & Emphasis

  • 1:04 – Facts
    • 1:05 – Business Survey 528K New Jobs
    • 1:15 – Household Survey 179K
    • Business Survey skewed because it also accounts for NEW Part Time jobs created!
  • 2:02 – How does it impact you or us:
    • 2:56 – $500K loan from close of Thursday to Close of Friday would have cost $3K more for same rate.
  • 3:02 – Where are we going?
    • 3:50 – What Fed Wants – to lower inflation and see consumers not spending as much $ right now, to make it a little harder. Not get to point where it stops but slows.
    • 4.35 – Current estimated rate locks on 30 fix roughly in high 4’s or low 5’s depending on what type of loan you’re doing, fico, loan to value and property type. When a month or so ago we were nearly a full rate higher. Feds don’t want to see this nearly as much right now and yet it’s happening…
    • 5.07 translation is that higher inflationary numbers are controlled to start with the Feds increasing the Federal Funds Rates which trickles to debt like credit cards and home equity lines of credit as examples. With that, the costs and willingness from consumer to spend money slows therefore slowing the demand for houses and allowing the housing market to get back to normal.
      • 5.15 house purchase today won’t go negative to point of it being worth less in 12 months—unlikely.
      • 5.26 expected to see a 5-8% year over year growth and from buyers perspective it will allow buyer to work with sellers easier, not worry so much about competition, etc…
      • 5.59 Don’t marry your mortgage – Nick
      • 6.29 Rates won’t be like this forever so if payment will work now with market rates or potentially looking at interest rate buy downs, etc. then pull the trigger because that house you’re looking at today will still likely cost you more in a year.
      • 6:40 Subscribe, Like, Comment, share but please only positive comments