I. Oil Prices (WTI) Plummeted To $92 Per Barrel From $104 Per Barrel On Monday.
A. Interest rates followed and are now almost 3/8% LOWER than they were a few weeks ago.
B. This unprecedented plunge in oil prices indicates again that very astute oil traders believe the Iran war will not escalate (again, huge investors with money on the line are often more accurate predictors of world events than “expert” pundits).
II. 10-Year Treasury Yields Were The Same This Time Last Year, BUT…
A. The 10-Year yield is just under 4.3% today, almost exactly where it was last year on this date.
B. BUT the average mortgage rate was almost 6.9% – compared to just over 6.3% today.
C. Once again – we’re saved by falling spreads (the difference between mortgage rates and Treasury yields).
III. “The Sweet Spot For Housing Has Been 6.25% Or Under The Last Few Years.”
That is a quote from Logan Mohtashami, who makes that point often – including yesterday. In other words, we’re getting very close to returning to the “sweet spot” (for more sales) – thanks to falling spreads.
IV. Parents Killing Transactions – The Best Instagram Post Ever?
I have been in the mortgage industry for 30 years, and one of the most frustrating things I have dealt with is well-meaning parents “advising” their homebuyer kids – and stalling or killing transactions.
Hence, my delight and extreme amusement when our marketing team posted this short IG video. It perfectly illustrates what happens when well-meaning parents get involved.
It should be in every mortgage and real estate company’s training program.
V. 12-Day Closes Are Huge – But Only In Some Markets
A. Market Differences: We do business across 11 states – and the differences in markets will never cease to amaze me. In some cases, the markets are only a few miles apart.
The SF Bay Area is a great example, where AI/tech wealth and limited inventory are fostering multiple-bid-feeding-frenzies in many high-end areas in and near San Francisco – while homes are sitting longer and longer in other markets just a few miles away.
So, while many of our buyers have zero need for a fast close, our “hot market” buyers are using them repeatedly to get their offers accepted. It is “shocking” because all you read about in social media is how “dead” the housing market is.
B. Lenders Confuse Clients: We’ve closed several transactions in 10 days, but 12 days is our standard now. And this is CALENDAR DAYS, not business days – to be clear.
This is also from “contract to close” (not from loan submission to close). Lenders often intentionally mislead when it comes to the definition of closing times – so I always like to clarify these points.
C. 12-Day Close Saved Client $45,000 & Won The Bidding Contest: Just this week, one of our clients used our 12-Day Close to beat out a $45,000 higher offer with a 45-day close.
D. CLIENTS WHO WANT TO CLOSE QUICKLY NEED TO CALL US FIRST TO PLAN!!
Buyers and agents need to prepare in advance, though, if they want to close in under 15 days. This is because there are many activities that lenders have no control over that can sometimes take a week – or longer.
Liquidating a 401k for down payment funds is a great example. But there are other considerations too, such as insurance and employee stock account liquidations.
