The MartiniFactor provides a glimpse of what happened last week in real estate and in the mortgage arena.  In addition, it shares thoughts on what to keep on the radar for the week ahead.

last week (4/1/2022) & this week (4/8/2022)

LAST WEEK

Employment Data

On Friday, April 1, 2022, we learned that 431,000 jobs were created in March of 2022. The market was expecting 500,000 jobs however there were upward revisions to the January and February reports which made up for the miss and confirmed that hob creation was strong.

Inflation 

This past week we saw data on Personal Consumption Expenditures (PCE). The PCE is the Fed’s favorite measure of inflation.  The headline number indicated that inflation is on the rise since it rose 0.6% in February. Year-over-year the PCE increased from 6% to 6.4% which is the highest level in 40 years.  Core PCE strips out volatile energy and foods prices  and that was up 0.4%…year-over-year, Core PCE increased from 5.2 to 5.4%

 The nemesis to mortgage rates in Raleigh is inflation. 

Raleigh Mortgage Lender & Certified Mortgage Advisor Kevin Martini

Housing News

The Case-Schiller Home Price Index, which measures the changes in sales prices of single-family homes certain markets showed a home prices increased 1.1% in January and 19.2% year-over-year.  The Federal Housing Finance Agency (FHFA), measures home price appreciation on single-family homes with conventional (a.k.a. conforming) loans rose 1.6% in January and 18.2% year-over-year.

THINGS ON THE MARTINI MORTGAGE GROUP RADAR THIS WEEK

The economic calendar is relatively quiet this week after last week’s wealth of data. Many are thinking that the Federal Reserve could move interest rates significantly higher than the markets currently expect. The Martini Mortgage Group will be  paying close attention to the minutes from last month’s Federal Reserve monetary policy meeting, scheduled for release this Wednesday. 

Raleigh mortgage rates have already increased by more than 1% since the beginning of the year. Even so, the market may take a little break from the recent volatility due to a relatively quiet economic calendar this week. That doesn’t mean the volatility is over.  

The Martini Mortgage Group Bottom Line

Right now, real estate and the current mortgage rate environment remains an opportunity. The Martini Mortgage Group is here to talk about what you have just read and here to help you on the path to buying you home. Contact the Martini Mortgage Group by dialing (919) 238-4934.

Kevin Martini | NMLS 143962 | Certified Mortgage Advisor and Producing Branch Manager | Martini Mortgage Group at PCL Financial Group (powered by Celebrity Home Loans, LLC NMLS 227765) | 507 N Blount St Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | nmlsconsumeraccess.org | Equal Housing Lender

The MartiniFactor provides a glimpse of what happened last week in real estate and in the mortgage arena.  In addition, it shares 3 things to keep on the radar for the week ahead.

last week (3/25/2022) & this week (4/1/2022)

LAST WEEK

New Home Sales and Pending Home Sales

If you just look at the headlines and don’t read the full story, it is understandable one could be scared about real estate.  Last week reports were released that showed a decline in New Home Sales and Pending Home Sales too – OH MY! It is critical to know the major reason for the decline was not a deceleration of demand but low supply.

Let me get granular on Pending Home Sales, they fell 4.1% in February, which was weaker than expected and comparing February of 2021 to February 2022, Pending Home Sales were down 5.4%.  Sure, one could say the decline was caused by higher mortgage rates, but I do not think so.  The real story behind the decline is inventory.

The Fed and Raleigh Mortgage Rates

There was a lot of Fed chatter last week.  Here is what one needs to know, the Fed has 2 tools on their belt to tighten the economy and they are: 1) increase their benchmark Fed Funds Rate and 2) reduce their balance sheet. 

Over time, it is my opinion, the Fed raising the Fed Funds Rate will be a good thing for Raleigh mortgage rates because the Fed should be able to curb inflation and preserve fixed return on mortgage bonds.  You see, mortgage rates live in the bond market and inflation is the nemesis to a bond.  With inflation in check, Raleigh home loan rates will improve but from a historical perspective, Raleigh mortgage rates are still very low.

As a primer, the Fed purchased $2.9 trillion of mortgage bonds since March 2020. As the Fed plans to reduce it mortgage bond holdings in the coming months it could cause Raleigh mortgage rates to increase.

3 THINGS ON THE MARTINI MORTGAGE GROUP RADAR THIS WEEK

Major Economic Reports on the State of the Jobs Market

The closely-watched jobs report is scheduled for release this Friday (4/1/2022). In addition to looking at the unemployment rate and the number of jobs created in March, the market will closely examine the “average earnings” component of Friday’s jobs report. It’s widely expected that wages will have jumped by roughly 5.5% year-over-year. Meanwhile, the ADP employment report is due for release on Wednesday, and this is often interpreted as a sneak peek into Friday’s official numbers. Also, the JOLTS Job Openings report is due for release on Tuesday and is expected to show over 11 million job openings in the economy, the highest numbers on record.

PCE Inflation Reports

The Fed’s favorite measurement of inflation is the PCE inflation report and we’ll get two perspectives on that this week. On Wednesday, we’ll get the quarterly inflation numbers for Q4 2021, and on Thursday we’ll get the monthly inflation numbers for February. Both reports are expected to show up to 5.5% year-over-year annual consumer inflation.

The Fed’s Reaction

The Federal Reserve indicated in recent weeks it will be removing its pandemic-era stimulus programs and increasing interest rates more aggressively, starting with its monetary policy meeting in May. This caused bond prices to plummet across the entire global bond market with mortgage rates jumping by more than 1% since the beginning of the year according to the Freddie Mac weekly survey of mortgage rates. The volatility is likely to continue as the market continues to react.

The Martini Mortgage Group Bottom Line

Right now, real estate and the current mortgage rate environment remains an opportunity. The Martini Mortgage Group is here to talk about what you have just read and here to help you on the path to buying you home. Contact the Martini Mortgage Group by dialing (919) 238-4934.

Kevin Martini | NMLS 143962 | Certified Mortgage Advisor and Producing Branch Manager | Martini Mortgage Group at PCL Financial Group (powered by Celebrity Home Loans, LLC NMLS 227765) | 507 N Blount St Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | nmlsconsumeraccess.org | Equal Housing Lender