Author: Lending Agent
Mortgage rates were already at 6 month highs earlier this week so it didn’t take much of a push to send them up to new 7 month highs today.The push in question came from today’s hotly-anticipated jobs report. No other economic report has as much consistent potential to cause volatility for interest rates. As such, when today’s job creation headline came in at much higher levels than expected, it was an easy decision for traders to push rates to higher levels.The average top tier 30yr fixed rate was closer to 7.125% yesterday. After today’s route, that rate is now almost…
Mortgage Rates Just a Hair Lower. Friday Could be Much More Volatile Mortgage rates are driven by movement in the bond market and bonds were on a shortened schedule today due to the federal day of mourning for Jimmy Carter. As such, volume and volatility were in short supply. Still, overnight market movement allowed the average lender to offer a microscopic improvement versus yesterday. Tomorrow (Friday, Jan 9th) is a different story. The big jobs report comes out at 8:30am ET. Bonds routinely react to this report more than any other scheduled monthly data. In other words, there is…
For the second day in a row, mortgage rates have moved higher at a modest to moderate pace. Unfortunately, that’s been a trend so far in 2025 and it’s compounded by the fact that rates were already close to their recent highs. The net effect is a move up to the highest levels since June for the average lender’s top tier conventional 30yr fixed rate. That rate has been over 7% more often than not since October 29th, and exclusively since December 19th. Are rates “headed to 8 percent?” That’s a figure that gets thrown around quite a bit in…
We came into the current week knowing that rates would take cues from any clear cues in this week’s economic data. In general, that means higher rates in response to stronger data or lower rates if the data is weaker. Today’s data was stronger across the board. One of the most closely watched economic reports that most people have never heard of–ISM’s Service sector index–was only a bit higher than markets expected, but the report includes separate components for things like employment and prices. Today’s release showed a sharp increase in prices and that’s a particularly sensitive subject for rates…
In real estate investing, Loan-to-Cost (LTC) is a ratio that defines a lender’s risk, or more specifically, the percentage of a project’s total costs that they will finance. The ratio can also reflect a real estate investor’s risk and profitability.For example, a high LTC — say 75 percent to 100 percent — allows an investor to reduce their initial investment in a project. On the other hand, the higher percentage equals greater risk for the lender and larger payments and obligations for the investor, resulting in fewer profits.The alternative, a low LTC, means lower risk for the lender and higher…
The bond market and interest rates have arrived at the first full week of the new year almost exactly where they left off before the X-mas/New Year holiday weeks. There was a small amount of underlying volatility in bonds today, but not enough to translate into volatility for mortgage rates. This kept the average lender near 7.125% for a top tier conventional 30yr fixed rate. Although the past 2 weeks have been uneventful for rates, the next 2 weeks will be heavily influenced by incoming economic data. There are several honorable mentions over the next few days before getting to…
Navigating today’s real estate market feels a bit like walking a financial tightrope. With interest rates reaching heights not seen in decades, high-interest rate investing has become a pressing concern. Many real estate investors are asking the same question: how do you stay liquid and profitable when borrowing costs are sky-high? The challenges are real—higher financing costs, shrinking cash flow, and tougher deal-making conditions—but with smart strategies, success is still within reach.Let’s explore three actionable tips to help you stay afloat and thrive in this high-interest-rate environment:The Impact of High Interest Rates on Real Estate InvestingFirst, it’s essential to understand…
New year, same old real estate market: The high mortgage rates, scarce inventory and dismal affordability that have plagued housing look set to linger into 2025.There were some signs of improvement late last year. Pending home sales rose for four months in a row through November, boosting hopes that the two-year deep freeze in residential real estate was starting to thaw. Industry experts have said buyers are increasingly adjusting their expectations, deciding they can’t wait for lower mortgage rates to spring for a home.In some markets, consumers “are taking advantage of more available inventory,” National Association of Realtors Chief Economist…
A recent episode of Real Investor Radio discussed the potential impact of a Trump presidency on interest rates, the economy, and real estate. Two perspectives emerged: the “bull case,” which suggests that Trump’s policies—such as deregulation and fiscal austerity—could lower inflation and fuel economic growth, benefiting real estate. On the other hand, the “bear case” cautions that his tariffs might increase construction costs and keep inflation high, leading to higher interest rates and reduced affordability.Despite these differing views, the consensus remains clear: investing in American real estate is a smart strategy, regardless of the economic outcome. Whether the economy booms…
A sharp rise in mortgage interest rates toward the end of December took its toll on mortgage demand, hitting just as the housing market entered its typically slowest stretch of the year.Total mortgage application volume for the two weeks ended Dec. 27, 2024, dropped 21.9% compared with the week before that period, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made to account for the Christmas holiday. The MBA released two weeks of data after being closed over the holiday.During that time, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances…