Welcome to my April newsletter, featuring personal insights, advice on mortgage rates, and economic news affecting our local housing market.
Employment Reports
The most significant economic news of April thus far is yesterday’s U.S. jobs report. Analysts expected 100,000-200,000 new jobs to be added to the economy in March, but the number came in at 303,000. Month-over-month wage growth increased by a modest 0.3%.
The Jobs Opening and Labor Turnover Survey (JOLTS) data showed little change in job openings in the U.S. — 8.8M versus a revised number of 8.7M in February (the JOLTS report trails the national jobs report by 30 days). Additionally, the number of layoffs has held steady for the last few months. The surprisingly strong jobs number makes investors question whether a June rate cut might be off the table. However, most of the strength in the job numbers this week came from healthcare, which is not sensitive to economic conditions, so fears that the Fed won’t cut rates until later in the year might be overblown. Next week’s inflation report will likely be the deciding factor.
Overall, employment data shows moderate wage inflation and steady job growth, indicating a healthy U.S. economy despite the elevated interest rate environment. The news tells me what most real estate professionals in our area will echo — inventory is the true bottleneck in the housing market, not higher mortgage rates.
Interest Rates
Here are the rates I have available on key loan products this week:
• 6.375% for 10YR jumbo ARMs up to $5M with income documentation, banking relationship will result in a lower rate.
• 6.625% on a 30YR fixed-rate loan up to $5M with income documentation, banking relationship will result in a lower rate.
• Rates for bank statement loans, depending on loan-to-value, are in the mid to low 7’s, with a strong credit score and a lower loan-to-value. These are priced very aggressively and aren’t much higher than full documentation loans, and interest-only options are allowed.
• Applicants with a strong depository private banking relationship and income documentation may qualify for rates in the high 5’s.
Bear in mind that these rates and loan products are only a small representation of my available loan products. We have the best rates, service, and execution, no deal too difficult or loan amount too small.
Local Activity & Recent Transactions
The beginning of the second quarter is looking good. Demand is there, and inventory is getting a little better, although it is still tough for buyers under $3M.
Recent Transactions
HELOCs | Malibu | $3M
7.54% interest rate, 7.65% APR
Fixed for the first 5 years
Full income documentation
This banking relationship is the only institution that does HELOCs at this magnitude.
New Home Purchase | Pasadena | $7M
80% LTV Financing
Full income documentation
6.625% interest rate, 6.375% APR
New Home Purchase | West LA | $2.195M
90% LTV Financing
Full income documentation
6.375% interest rate, 6.52% APR
10-1 ARM
No PMI
New Home Purchase | Malibu | $5.2M
80% LTV Financing
5.75% interest rate, 5.875% APR
Private Banking relationship
7-1 ARM
Key Economic Reports to watch for this month:
April 10 – Core Consumer Price Index (CPI)
April 16 – Building Permits, Housing Starts
April 18 – Existing Home Sales
April 23 – New Home Sales
April 25 – Pending Home Sales
Lastly, this week, I was honored to be ranked as the #1 mortgage broker in the United States by Scotsman Guide, the industry standard for performance in lending. I am grateful to be surrounded by a fantastic support team, most of whom have been with me for decades. The benefit to my clients is that my standing and volume in the industry give me access to preferred rates, and an experienced team means we can get deals done faster than anyone else without a lot of red tape.
Call me today at 310-777-5401 to learn how I can make a difference in your next real estate purchase or refinance.
Sincerely,
Mark Cohen