Tag Archive for: economy

Ceasefire Pushes Rates Way Down; Will It Hold? Ask The Markets, NOT The Pundits

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It was an amazing thing to behold! I watched the 10-year Treasury yield fall almost 15 basis points or 0.15% (a huge drop) very quickly when the ceasefire was announced yesterday. I also watched oil prices drop from $117 per barrel to only $92 per barrel – and I was gleeful. But then I saw “Iran’s 10 Point Plan” (copied below) – and my heart sank. I thought and still think … “NO WAY WILL THIS CEASEFIRE HOLD…given Iran’s demands.”Read More

Can Non-Citizens Still Get Mortgages?

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Oil prices – which have been sparking inflation fears and driving rates higher – rose again over the weekend. But rates fell sharply today in the face of rising oil prices. Rates fell because the prospect of a weaker economy outweighed inflation concerns. The University of Michigan Consumer Sentiment Index came in very weak, particularly regarding employment concerns; 61% of participants expected unemployment to increase over the next 12 months.Read More

The Real (Much Bigger) War Behind The Scenes; Why Gold Crashed & It’s Good News!

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Economies can’t handle interest rate shocks (the mortgage industry is a case in point), and the repercussions put politicians in deep peril. So, it is a certainty that nobody is freaking out more than Trump administration officials. This is because oil prices and interest rates are up again today! (Mortgage rates have now climbed almost 5/8%!) But here’s a fascinating and comforting reminder: In 1993 and 1994, 10 Year Treasury Yields rose from 5.2% to over 8.0%! (A 3% increase!) This was in response to Clinton’s efforts to push through a massive stimulus bill that the bond market did not like.Read More

Seller Rent Back Rules; Two Forces That TERRIFY & BEAT Trump and All Presidents

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President Trump was panicking last night. Guaranteed. Sheer panic. This is because, in what was the most interesting weekend in finance in the last 18 years, there were two forces that brought Mr. Trump to his knees. I will explain why below, but first, a quick reminder: Sellers can rent back a property they just sold (and remain in the home) for up to 60 days after close of escrow.Read More

Watch Oil Prices For War Status; Danger: Arterial Through Streets!

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When I want to know how the Iran war is going, I don’t check CNN (“We’re getting crushed! WWIII Is Here! Trump eats babies!”), and I never check Fox (“We’re kicking ass and taking names! The war was over last week, and high oil prices are propaganda! Trump walks on water!”). In other words, I don’t trust war updates that involve people, because people invariably have agendas that influence their reporting, and even the best journalists can be swayed by propaganda. What I do trust, though, is the oil markets. The reason, as I have explained several times, is that oil buyers and sellers can never afford to have an agenda. They have to look only at reality, or they can lose tens of millions, or even billions, of dollars.Read More

Fed Day! Should The Fed Cut Rates To Offset High Oil Prices?

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Today is “Fed Day” – when the Fed announces whether or not it will cut rates. And – given that PPI (Producer Price Inflation) came in hotter than expected today, the Fed will very likely not cut. PPI is from February too, BEFORE the Iran war and the run-up in oil prices, so we can expect an inflation-leery Fed to be very concerned.Read More

Irony: Today’s Very High Oil Prices Will Result In Very Low Oil Prices & 4% Mortgage Rates (A Very Bad Thing)

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Prior to the Iran war, the average mortgage rate was 5.99%. Today’s average is closer to 6.4%, and our brief purchase-and-refi boomlet has come to a screeching halt. Rates shot up so quickly because oil prices shot up so quickly – from about $65 per barrel (WTI) to about $94 per barrel today. So that is why loan officers and real estate agents should care so much about oil prices; they have an enormous influence on rates.Read More

People No Longer Move For Jobs – And It’s Bad! (Data That Will Amaze You)

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Laura Ingalls Wilder (of Little House on the Prairie fame) moved SEVEN times when she was a little girl in the 1870s (from Wisconsin to Missouri to Kansas to Wisconsin to Minnesota to South Dakota). She failed to mention three of the moves in her famous books because they didn't always work out well, and life was pretty tough (extreme poverty, death of her little brother, “Pa” worked as a hotel clerk, etc.) I learned about this in a book about Laura called “Prairie Fires.” It told the real story of the Ingalls family – and it also mentioned that Michael Landon (who played “Pa” in the TV series) got shitfaced drunk every day during filming (which was obviously the best part of the book). TV Pa also had the peculiar habit of taking his shirt off and wrapping bandages tightly around his love handles every time he got injured – which always made me question the authenticity of the TV show.Read More

The Coming “Silver Tsunami” Housing Crash = More Nonsense

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NOTE: Rates have been rising again on more oil market news. My Marketing Director, however, told me that I can’t blog about “the stupid oil markets” again. 😊 So, suffice it to say that oil market jitters (and inflation concerns) resulting from the Iran war continue to drive rates higher.Read More

Oil & Rates Spike WAY UP Again…Then Plummet; We Now Know When The War Will End; Whew!

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All hell broke loose in the financial markets yesterday – in what had to be one of the most interesting weekends ever. First of all, WTI (oil prices) spiked to almost $120 per barrel – nearly double the $65 price we saw before the war (and $30 higher than the $90 price we saw Friday). Needless to say, interest rates spiked too in response – and the world (especially mortgage guys, the Trump administration, and Asian countries dependent on oil imports) panicked. Oil spiked because of direct attacks on Iran’s oil facilities, because the Strait of Hormuz remained closed (choking off oil shipments), and because countries near Iran shut down their oil and liquid natural gas production.Read More

Rates Up Again; When Will They Come Back Down?

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We saw record loan volume last week, hitting a number of locked loans we have not seen since 2022. Then…it all stopped. The reason, of course, was the Iran war – which threatens the distribution of as much as 20% of the world’s energy supplies (sparking inflation fears). In other words, right when things were getting good, geopolitics threw a wrench into the machine (again).Read More

Why Rates Will Now Stay Elevated Even When The War Ends; But Don’t Worry…

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West Texas Intermediate (WTI) oil was down to $64 per barrel last week before the Iran war. Today, WTI is close to $74 per barrel – a whopping 16% increase that will work its way into every other thing we purchase. This is because the war threatens the supply and transportation of a huge portion of the world's oil and liquid natural gas (over 20%). Gasoline prices are already up 20 cents per gallon – the largest jump we’ve seen over a short period in over 20 years.Read More

How Will Epic Fury (Iran) Impact Rates; Good News and Bad News

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In the days after the 9/11 attacks in 2001, interest rates fell sharply, as investors fled to the safety of bonds due to the uncertainty of what was happening. In the weeks leading up to GW Bush’s invasion of Iraq in 2003, interest rates plummeted - with the 10-Year Yield falling 1/2 percent! Similarly, when COVID news surfaced in 2020, rates plummeted and continued to fall in the face of extreme uncertainty. These events illustrate why today’s rate increase could be construed as good news, as it implies that investors are not overly concerned about Epic Fury blowing up into something much bigger.Read More

U.S. Men’s Hockey Team Wins Gold For Obvious Reason; How It Applies To Mortgages

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The U.S. Men’s Hockey Team won the gold medal yesterday for the first time in 46 years. And what really frustrated me was how EVERYONE missed the obvious implications this has for the mortgage market. Hat tip to the U.S. women as well, who also took home gold. But A) They’ve won gold a bunch now, and B) I don’t have salary data for women, so I can’t draw irrational conclusions.Read More