Welcome to my September newsletter featuring personal insights, advice on mortgage rates, and economic news affecting our local housing market.
Interest Rates
Benchmark Rates
Jerome Powell’s remarks at last week’s Jackson Hole Economic Symposium all but guaranteed a half-point hike in the benchmark rate when the Fed meets on September 21st. Some economists predict a steeper, three-quarter point hike. Still, I am optimistic that the smaller wins in weaker economic reports and benign inflation data we’ve seen in the last few weeks will temper any overly aggressive moves.
Mortgage Rates
This week, a rocky stock market pushed mortgage rates a little higher, but homebuyers should not panic because there is still a lot of liquidity in the loan market. If you know where to look, there are lenders who are still offering aggressively priced loans with terms that can help buyers get past a high-priced, higher interest rate environment to secure the property they want.
As a broker of loans, I am able to sift through hundreds of loan offerings to select the best of what’s available to ensure every buyer and homeowner gets over the finish line.
New Loan Program
My distinguished reputation and longevity in the mortgage industry afford me access to loan products few other lenders can offer. Here is a tremendous opportunity for highly leveraged borrowers with a moderate credit rating.
Low Down Payment Options | A-Paper Rates In The Low 5’s
Minimum FICO score 620 | Full Income Documentation
– 97% LTV up to $1M
– 95% LTV up to $1.5M
– 90% LTV up to $2M
Recent Transactions
We are proud to offer some of the best mortgage financing in Southern California and can create a variety of loan solutions for buyers. Here are some examples:
New Home Purchase | West LA | $17.75M
30Yr Fixed
70% LTV Financing
4.75% 30-Year Fixed Rate
4.875% APR
Duplex Purchase | Mid-Wilshire | $1.85M
90% LTV Financing
A-Paper Rate
One Loan
Debt-To-Income Ratio (DTI), high 40’s%
Refinance | Beverly Hills
Cash Out Refinance
$5M All Cash
Economic Reports Impacting Our Housing Market
Jobs Report
The U.S. Bureau of Labor Statistics Employment Summary on Friday reported a solid addition of 315,000 jobs. However, the unemployment rate rose to 3.7%, signaling the possibility an overheated job market may be cooling and that the Fed’s steps to calm inflation are moving in a positive direction. Modest wage growth had a positive effect on the bond market as this has been a key barometer of inflationary expectations.
California’s unemployment rate plunged to 3.9%, the lowest on record since the state began tracking data in 1976. Robust numbers bode well for our housing market because employment drives demand and minimizes foreclosure activity.
Inflation
Last month inflation decreased a half-point to 8.5% on a year-to-year basis. However, inflation levels for the past two months have had extremely favorable nominal increases. We need a few more months of this before the Fed would consider a pivot in policy. Additionally, the most recent manufacturing index shows a slower increase in the cost of goods for suppliers, although there is still a shortage of goods and labor costs remain elevated.
The August Core Consumer Price Index (CPI) report, the most-watched measure of consumer price inflation, will be released on Tuesday, September 13th.
Key Economic Reports to watch for this month:
September 13th – Core Consumer Price Index (CPI)
September 15th – Retail Sales, Fed Manufacturing Index
September 20 – Building Permits, Housing Starts
September 21st – Existing Home Sales, FOMC economic projections, Fed interest rate decision
Overall, national economic data from multiple sources show promise that inflation has peaked and brighter days are on the horizon.
As always, I remain bullish on the health of our local market and the opportunity Southern California real estate presents for long-term wealth creation. Please don’t hesitate to contact me to learn more about the loan products I have available to support your goals.
Sincerely,
Mark Cohen