Tag Archive for: oil

Peace Deal Dies; Rates Up; Why Trump Can’t/Won’t “Finish The Job!” NOT GOOD FOR RATES…

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Iran ended negotiations in response to ceasefire violations and Israel’s renewed attacks on Hezbollah in Lebanon. Iran is also threatening to close the Strait of Hormuz. As a result, oil prices spiked, and interest rates followed. Per the likes of Luke Gromen, Exxon’s CEO, Peter Zeihan, and Doomberg – energy prices are only going to continue to climb now because so much production is now offline or restricted. And – more importantly – prices will also spike because much of the world is now running off its energy reserves, which will soon run out. And worse, myriad other prices will spike because so many other products need to travel through the Persian Gulf (making the midterm elections pretty scary for Mr. Trump).Read More

Oil & Rates Plummet; Why “Portable” Mortgages Are A Really Dumb Idea

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Oil prices plunged last night on credible rumors that the U.S. and Iran are close to an agreement to end the war. And, as I’ve been noting since the war started, as goes oil, so go rates. Rates fell sharply Portable mortgages are loans that homeowners can transfer from one home to another. Naïve housing analysts often float portable mortgages as a great way to free up “locked down” inventory (homes with very low rates that owners do not want to lose – so they refuse to sell). Homeowners with very low rates also often get excited by the prospect of portable mortgages.Read More

Uh Oh!! Fed Says No More Rate Cuts This Year!! Panic Time?

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Interest rates shot higher yesterday after the Fed signaled there would be no further interest rate cuts this year. And because 99% of Americans mistakenly believe the Fed is all-powerful when it comes to all interest rates, I am going to dispel the Fed myth one more time. We share these blogs with clients who insist on “waiting for the Fed to cut” before buying homes or locking in rates. SIDEBAR: This post explains that for every $1 rise in gas prices, the sitting president loses 6% of his support – meaning Trump has now lost 15% of his support. A) It is super interesting. B) You can be damned sure Mr. Trump is aware of this, so it will be interesting to see him pull out all the stops to push oil and gas prices lower. And that bodes well for rates.Read More

Expect Higher Rates In The Near Term; Two Huge Takeaways

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I predicted mid to low 5% mortgage rates later this year several times in blogs and talks – but I did not expect three things: Ukraine to get so good at attacking Russian oil facilities. The Iran war, and its continuance. And Too fast of an increase in the money supply. As recently as two weeks ago, I discussed energy analyst Doomberg’s reminder that oil producers always overproduce in response to high oil prices, which always results in gluts later on. Doomberg predicts that oil will drop to as low as $30 per barrel (from $105 today). But that could take several years to play out. High oil prices push up all other prices, sparking the inflation concerns that have been pushing rates way up since the Iran war started. Iran’s resistance and Trump’s escalatory language pushed oil prices up to a new high today, and rates are up again as a result.Read More

Uh Oh…Oil’s Up; Credit Scores – A Brief, Fascinating History – Pointing To Where We’re Going

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Oil was way up this morning, as were gold prices – and I was very worried about the ceasefire collapsing! But… oil prices just fell again, suggesting that something is signaling to oil traders that the ceasefire still has a chance to work out (whew!). A few interesting factoids: Every time oil prices double, America goes into a recession. High oil price recessions are confusing for bond investors – do they demand low yields because of slow growth or high yields because of oil-induced inflation? Oil prices QUADRUPLED from 1973 to 1974 (a fact I’ve shared before because it is so interesting) – brutalizing the American economy.Read More

Trump’s Speech to Calm The Markets, Roiled Markets

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On Friday of last week, JVM sent commandos into all of CrossCountry Mortgage’s offices in the SF Bay Area. The raid was very successful, as we shut down all of CrossCountry’s Bay Area operations. While CrossCountry is none too happy, JVM is very happy because we can now charge 1/4% higher rates in the Bay Area - now that all that competition is out of the way.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

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

Woohoo! Another Financial Crisis Is Coming – And It’s Gonna Be Bad!

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“What’s good for General Motors is good for America!” That is a slight bastardization of a quote famously uttered by GM’s CEO in 1953 – and he was largely right. What is ironic, though, is that the opposite is true for the mortgage industry (and for real estate).Read More

Should Buyers Wait For Lower Rates To Buy?

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Oil prices (WTI) spiked up to $90 per barrel (from only $66 prior to the war), and rates rose again in response. Interesting thing number #1: Inflation fears trump weak labor markets. A very weak jobs report surfaced today, which would normally have caused rates to plummet. But higher oil prices outweighed the very weak job numbers, and rates rose. Interesting thing number #2: Oil spiked far higher when Putin invaded Ukraine. WTI oil prices were in the $80 range when Putin started to build up his forces in anticipation of his Ukraine invasion in early 2022. After the invasion, prices spiked up to almost $116 in a few weeks – a $36 increase. What is interesting, though, is that Russia was only responsible for about 10% to 12% of the world’s oil production in early 2022, vs. 20% for the Persian Gulf region. This implies that the markets thought the Ukraine war would last longer and be more severe.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

Carvana CRUSHED CarMax! Should This TERRIFY Mortgage Lenders Or Realtors More?

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The internet is so interesting and fun that I can’t believe it’s legal. I’ve been stuck on episode 5 of Pluribus for over a month now because YouTube and X are so good at feeding me fascinating videos. Last night alone I learned that Turkey has a surprisingly strong military (9th strongest), that there are three different kinds of crude oil (light sweet, medium sour, heavy sour), that America’s finally removing millions of tons of plastic from the ocean, that the tallest Tsunami wave was over 1,700 feet (Alaska in 1958 – and a small boat road out it’s crest!), that the 1883 Krakatoa eruption created a tsunami that made 2004’s look like a mere ripple, that a brown bear could beat up a tiger or lion, that an African lion can beat a Siberian tiger, that a T. rex would easily beat an elephant, and that prime Mike Tyson could beat a chimpanzee (chimps aren’t as strong as we think, and Tyson’s head shots would take one out).Read More

Why Letting Russia Ship Unlimited Oil Would Cost Them The War

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I swear this relates to mortgages and real estate. 😊 I also just wanted to work this topic into a blog because it is so interesting. Russia is propping up its Ukraine war economy with oil revenues – despite the West’s best efforts to shut off the flow of Russian oil. The west is both stopping Russian tankers and going after countries that buy Russian oil with tariffs and sanctions – and it’s not working at all, per financial analyst Doomberg. But, here’s the really interesting part.Read More