Results Realty

10/31/2024

Happy Halloween!!!!! Be Safe, have fun and don't forget to laugh!

10/18/2024

What is going on in the real estate market?!?!?

Oil Sputters
Oil and mortgage rates tend to ebb and flow together. When oil prices move lower often interest rates move lower as well. That is what happened earlier this week. Last Tuesday, oil had its largest one-day decline in quite some time, in response to news that Israel was not going to attack Iranian oil facilities. Also, OPEC issued a forecast showing sightings of less global demand for oil. Both stories pressured oil prices to move lower which helped long-term rates modestly improve.

Inflation Around the Globe
In another positive sign for bonds and rates going forward, inflation around the globe continues to moderate. Recent readings from Canada, the UK, and Europe were reported lower than expectations. If inflation moves lower around the globe, it puts downward pressure on global interest rates, including here in the U.S.

Retail Sales Not “Real” Good
Retail sales, a measure of consumer spending, were reported above expectations in the monthly reading, pushing the year-over-year number to 1.7%. That sounded very positive, but when looking at “Real” Retail Sales, which adjusts the number for inflation, they were negative. This means people are not purchasing more year-over-year; they are just paying more. Real Retail Sales peaked in April 2021. When Real Retail Sales flatten, as they have for a couple of years, it has historically led to a recession. As they say, time will tell.

4.00%
The 10-year Note yield, which also ebbs and flows with mortgage rates, did improve from the worst levels this week. The Government Note touched a high of 4.10% couple times and declined down to a low of 4% this week in response to the oil news we discussed. Now, 4.10% is serving as yield resistance, preventing rates from moving higher and, 4% is serving as yield support preventing rates from going lower. Whichever way the 10-year Note breaks out of this tight range, mortgage rates will likely follow.

Bottom line: Home loan rates were able to stop rising this past week, which feels like a victory after the recent spike higher. The next directional move will likely come from high impact news like inflation, labor market, or the forthcoming election.

Looking Ahead
Next week’s economic calendar is also light, with just a few releases, none of which touch on the Fed’s dual mandate of inflation and the labor market. We will have some Fed speakers showing up for their final comments before the next blackout period, or “quiet period,” prior to the important Fed meeting in a couple of weeks.


Mortgage Market Guide Candlestick Chart
Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 5.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

If you look at the right side of the chart, you can see how prices and rates have moved sideways after a sharp decline.

09/26/2024

Anyone have a 2 or 3 bedroom house/condo or town home for rent. Client is looking to stay around $1,300. I know that will be tough in this market. Area's of interest Whitewater, Fort Atkinson, Jefferson, WI or surrounding areas. Thanks in advance.

09/13/2024

A little look at the market and what's trending!

Inflation Headed Lower
The August Consumer Price Index (CPI) inflation reading came in at the lowest levels since 2021. Long-term rates like mortgages, love low inflation so this bond-friendly news helped home loan rates touch the best levels since February 2023!

As we approach the highly anticipated Fed Meeting next week, will this report be enough for the Fed to cut rates by .50%. The markets are saying no, because one of the inflation readings, (the Core CPI monthly reading) came in 0.1% above expectations and the Fed wants to be careful about not letting inflation reaccelerate through lowering rates.

Oil Hits 2024 Lows
Often, you can track oil prices to see what rates are doing. If oil prices are moving higher, it's likely rates are moving higher too. The opposite is true. This past week oil prices hit the lowest levels of 2024, so it's of no surprise that rates also hit 2024 lows as well.

China Struggles are Pushing Rates Lower Too
China is going through some very tough economic times with significant deflation in their housing market. Essentially, they are in the opposite housing position of the United States. Here – we do not have enough homes and everyone wants one. In China, they have too many homes and no one wants them. In China, to spark demand, they are lowering rates and even taking homes off the market (government purchases) to help stem the deflation or price declines in their markets. The weak economy is putting downward pressure on rates around the globe.

It remains to be seen what happens as China attempts to stoke inflation and housing demand in their faltering economy and if it will push inflation and rates higher around the globe.

Treasury Auctions Did Well
Every couple of weeks, we watch how much the Treasury Department will sell in new debt to fund our government. When these auctions do well (and buying interest is high at current rates), it helps keep rates stable to lower. If the auctions do poorly, it can lead to a spike in higher rates. The good news? Even with rates at the lowest levels of the year, there was high demand to purchase the debt in the bond market and this helped rates too.

Yield Curve Disinversion Continues
As we shared last week, the 2/10 Note Yield curve inversion turned positive and has remained so throughout this week. Meaning, the 2-yr Note yield has normalized beneath the 10-yr Note yield. The markets are reading this as a warning sign of a potential recession in the not-too-distant future. It seems odd that this is possible, but the disinversion back to a positive or normal yield curve has quite often accurately predicted a recession in the past.

Bottom line: The trend is our friend as rates are at the lowest levels of 2024 and threatening to touch the best levels since early 2023. Moreover, the Fed is going to start cutting rates next week.

Looking Ahead
Next week is the end of "higher for longer" as the Fed is going to cut rates, breaking a streak of 14 months where the Fed Funds Rate has been kept at 5.50%. In addition to the Fed Meeting, there are a bunch of market moving reports, including Retail Sales – a gauge on consumer health.


Mortgage Market Guide Candlestick Chart
Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 5.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

Chai Charin
Senior Loan Officer | NMLS #222482
1500 Eisenhower Lane Bldg C Unit 200, Lisle IL 60532
O: (630) 430-4481 | M: 6304304481

08/29/2024

Just throwing this out there. My family and I have been doing this for almost 25 years now. It is real simple. To dumb it down, you have to pick a team that you don't think will lose. You can't pick the same team twice. Pre-covid the winners would talk home almost 15k. The pot is smaller now but we are growing. The wives can even play. I always do three pick for myself and Kelley does three picks as well. All the rules and contact info is below. Rock and Roll!

LAST MAN STANDING FOOTBALL POOL RULES

2024 survivor pool will be ran by Bobby Faulds [email protected]

Below are the rules for the 2024 survivor season. let me know if you are interested in signing up.

1 Each week you select the winner of an nfl game. The contest will end at the end of regular season with survivors splitting the pot or when there is a lone survivor

2. You can only select each team once during the season

3. If the team you select week 1 wins you move on to the next week and continue to move forward as long as you win each week.

4. A tie game will result in elimination.

5. Entry fee is $40 per player or 3 for a $100. You will know what the pool is after the entry deadline is reached.

6. Thursday games must be submitted by 6:30 pm EST. All other games must be in by Friday at 9:00 pm EST

7. If you turn a team in for a Thursday game that is late you will be notified to pick another game for the week.

If you are late getting Pick in on Friday night by 9:00 you are out.

8. Your money must be received by 9/5/24 that is the entry deadline.

9. When I send out the weekly picks, if you are not on it you need to contact me, if I have them and just missed it I will send out original email to the group showing you sent on time. If I did not get you will need to resend the original email so I can send out to group showing it was sent.

Send entry fee, along with name and email address to:

Bobby Faulds

1903 south post road

Anderson IN., 46012

Or you can send it via pay pal @ paypal.me/Bfaulds

email address is b.faulds .net


Zelle 765 749 1640

Go to paypal.me/BFaulds and type in the amount. Since it’s PayPal, it's easy and secure. Don’t have a PayPal account? No worries.

08/27/2024

Anyone find a purse about an hour ago in the Antioch Walmart?? I am pretty sure it was stolen right out of my moms cart but I figured its worth of try. Any help would be greatly appreciated!

08/17/2024

Inflation Cooling
This past week, the July Consumer Price Index (CPI) was reported. The year-over-year number came in at 2.9%, the lowest reading since March 2021. After stripping out food and energy, the Core CPI annual reading came in at 3.2% the lowest reading since April 2021. This is welcome news.

The numbers brought a sigh of relief to the bond market as bonds hate inflation. This news could likely prompt the Fed to cut rates at the September Fed meeting and by as much as .50%.

Gimme Shelter
Shelter makes up any enormous amount of the inflation reading. In fact, it makes up 90% of the 2.9% CPI figure and 70% of the Core CPI figure.

What is Included in Shelter?
The shelter component of the CPI includes:

Rent of Primary Residence: The actual rent paid by tenants for their main housing.
Owners' Equivalent Rent (OER): The estimated rent that homeowners would pay if they were renting their homes. This is a hypothetical cost, not based on actual rental payments, but rather on rental values of similar properties.
Lodging Away from Home: Costs of staying in hotels, motels, and other temporary lodgings.

How is Shelter Computed?
Data Collection: The Bureau of Labor Statistics (BLS) collects data on rent and owners' equivalent rent from thousands of households across different geographic areas.
Rent Index Calculation:
For Rent, they collect data on the price of rent for a variety of rental properties over time.
For OER, they ask homeowners what they think their home would rent for and use data from comparable rental properties.
Weighting and Averaging:
Each type of housing has a different weight in the overall shelter component. Weights are determined based on how much of the average consumer's budget is spent on each type.
The BLS calculates an index for each type, taking into account the relative importance of different types of housing in different regions.
Price Change Calculation: The BLS then computes the average change in prices over time for all shelter components.
Aggregation: Finally, these changes are aggregated to form the shelter component of the CPI.

Importance of Owners' Equivalent Rent
Why OER?: Most Americans are homeowners, not renters. If the CPI only used actual rents, it would not accurately reflect the housing costs experienced by the majority of the population.
How OER is Estimated: OER is based on the idea that homeowners have an opportunity cost for living in their own homes, equivalent to what they could earn by renting it out.

Example:
Let's say the BLS collects the following data:

Rent for a typical two-bedroom apartment increased from $1,000 to $1,050 over a year.
OER for a similar property went from an estimated $1,200 to $1,250.
The BLS would calculate the percentage change in both rent and OER and then combine them based on their relative weights to get the overall change in the shelter component.

Why Shelter is Important in CPI
Shelter is a large part of most people's budgets and makes up a significant portion of the CPI. Therefore, changes in shelter costs can significantly impact the overall CPI, influencing economic policy, wage negotiations, and cost-of-living adjustments.

Summary
In summary, the shelter component of the CPI measures the cost of housing by combining data on actual rents and estimated costs for homeowners, weighted to reflect the spending patterns of the average consumer. This helps provide a comprehensive view of how housing costs are changing over time.

3.80%
The 10-yr Note which ebbs and flows alongside home loan rates was at 3.80% late last week, near the lowest levels in over a year. The lowest level for the 10-yr Note this year was 3.66%.

Refinance Activity Soaring
The decline in home loan rates did more than spike purchase activity. Refinances were at 35% on the week as folks look to take advantage of the lowest rates of 2024.

Bottom line: Rates continue to gradually improve as the economy slows, inflation declines, and the unemployment rate edges higher.

Looking Ahead
Next week doesn't have a lot of economic news, but there are a couple potential big market moving events. On Wednesday, the Minutes from the last Fed Meeting will be released. This was the Meeting where they decided not to cut, which was just hours before the weak July Jobs Report which has since elevated recession fears and talks of a .50% cut next month. Then on Friday, Fed Chair Jerome Powell will be speaking at the Jackson Hole Symposium. We have seen many big market moving comments come from this gathering...stay tuned.


Mortgage Market Guide Candlestick Chart
Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 6.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

If you look at the right side of the chart, you can see how prices are just below the best levels of the year.

Update on the market! Thanks to Chai Charin!!

07/26/2024

The Quiet Period Gets Voice Bombed
In the 12 days leading up to the Fed meeting, there is a period called the blackout or quiet period. During this time Fed members do not have speeches or speak publicly on monetary policy. With the Fed Meeting approaching next Wednesday July 31st, last week was supposed to be free of Fed speak. Well, it was and it wasn't.

Former New York Fed president, Bill Dudley, offered an opinion piece with Bloomberg titled "I Changed my Mind, The Fed Needs To Cut Now". The piece talks about how changing facts have changed his outlook on the economy, rates and that waiting too long to cut elevates recession risks.

That is all the bond market needed to hear for interest rates to move. The 2-year Note which moves in response to Fed hikes and cuts, fell sharply, beneath 4.40% and the lowest levels since February. This on the idea that a Fed rate cut is fast approaching.

Will the Fed cut rates next week? Likely not, but as of this moment, the Fed Funds Futures are now pricing in .75% of Fed rate cuts by year-end, meaning they see a rate cut in September, November and December, thereby lowering the Fed Funds Rate to a range of 4.50% to 4.75%.

Bad News is Finally Bad News
Outside the first look at 2nd Quarter GDP which came in better than expected, the incoming economic news was disappointing and led many economists and market thinkers to suggest that the economy is headed towards a recession.

Existing home sales was unfortunately an utter disappointment, showing the worst June sales activity since 1999. The lack of mortgage demand, due to high interest rates and limited but growing housing inventory were the culprits behind this disappointing reading.

Durable Orders, which are purchases of big-ticket items were also a large disappointing miss - highlighting the notion that people are slowing their spending.

Problems Abroad As Well
Besides the weak economic data here at home, Germany and France also reported disappointing economic news with the former showing a surprise contraction in economic activity. Bad news in other parts of the globe pushes global interest rates lower. This is a reason for the sustained bid or buying of US Bonds.

China Surprise Rate Cut
On Thursday morning, China surprised the world by lowering their mortgage rates to stimulate their sagging economy and slumping housing market. The region is suffering from outright deflation in housing. This is a phenomenon where prices continue to fall because there is no demand. This is the opposite of what is happening here in the US and let's hope we do not see any deflation in our economy.

4.20%
The 10-year Note has been unable to move beneath 4.20% and this has limited the improvement in mortgage bonds and mortgage rates as well. This can be seen in the MMG bond chart below.

Bottom line: The economic story here in the US is changing quickly with disappointing economic news putting pressure on short term rates and greatly elevating the chance of a Fed rate cut. It was just a few weeks ago, at the June meeting when Fed Chair Powell said they were going to cut rates just one time. Now markets and former Fed officials like Dudley above, say the Fed needs to act sooner and more aggressively with rate cuts to lower the risk of a recession.

Looking Ahead
As we mentioned, next week's Fed Meeting is a big deal as Fed officials now must address the slowing economic news and the calls from former officials and market thinkers to cut rates sooner and more often in the coming months. It's also Jobs week with an important Jobs Report next Friday. If the unemployment rate ticks higher, the calls for rate cuts will grow louder. The opposite is true.

Mortgage Market Guide Candlestick Chart
Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 6.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

If you look at the right side of the chart, how prices have been stuck near a ceiling dating back to March, which has limited any further rate improvement.

Chai Charin
Senior Loan Officer | NMLS #222482
1500 Eisenhower Lane Bldg C Unit 200, Lisle IL 60532
O: (630) 430-4481 | M: 6304304481
[email protected]

06/07/2024

A Look Into the Markets

Interest rates dropped to the lowest levels in the last two months. Let’s discuss why and what’s next.
“The future's in the air, I can feel it everywhere. Blowing with the wind of change” Winds of Change – The Scorpions.

Economic Deceleration

A big driver of interest rates is the state of the economy. In times when the economy is booming, interest rates tend to run higher as both unemployment and inflation creep higher. The opposite is true.

In the past couple of weeks, there have been many economic readings revealing that the economy is slowing. Our gross domestic product (GDP) for the first quarter was revised lower to 1.3%. Coming on the heels of 4.9% and 3.5% for both the third and fourth quarters of 2023, this highlights an economic slowdown. There was also growing sentiment that the second quarter would rebound sharply from the 1.3% reading. However, the Atlanta Fed poured cold water on that idea. They significantly lowered their forecast for the second quarter from over 4% to 1.8%. This downward revision caught the financial markets by surprise, and interest rates declined sharply in response.

Manufacturing Not Manufacturing

Another sour reading on the economy was the Institute of Supply Management (ISM) Manufacturing Index. This report persists in indicating a contraction or absence of manufacturing. This means that people are losing jobs in this sector, which is never a good thing. Bonds like bad news, and this bad news helped bonds last week.

Help Wanted Signs Disappear

The JOLTS report showed that help-wanted signs continue to disappear, meaning there are fewer jobs available and highlighting the loosening in our labor market. Currently, there are just over 8 million jobs available, the lowest reading in three years and well off the high of 11 million seen a few years ago.

This is an important figure to watch because if there are fewer jobs available, people are less likely to quit and are not in any position to demand higher wages, which feeds inflation. This is another case where bad news helps bonds because it fuels the idea that a Fed rate cut could come sooner rather than later.

Unexpected Weakness

Interest rates still have the overhang of debt and inflation pressures, which hurt rates. However, Fed Chair Powell said at the previous Fed meeting that they will not have an appetite to cut rates unless they see “unexpected weakness” in the labor market. We may very well be seeing that unexpected weakness happening now. A Fed cut may be on the near-term horizon if labor market prints continue to show weakening signals.

4.29%

The 10-year Note, which ebbs and flows with mortgage rates, declined to 4.29% last week, the lowest level since early April. Moreover, the yield pushed beneath its important 200-day Moving Average. If the 10-year Note can get comfortable under its 200-day Moving Average, it could lead to stable to lower rates ahead. The incoming news will have a major say if that is possible.

Oil is Lower

Another metric to watch in determining where rates are headed is oil. Oil prices have declined sharply in the last couple of weeks, in tandem with interest rates. This is on the perceived notion of an economic slowdown here and abroad.

Bottom line: The winds have changed in bonds’ favor over the past two weeks as a slew of bad economic news has hit the market. It also appears that “bad news is finally bad news," meaning that it supports lower rates.

Looking Ahead

Next week, we have important inflation data and debt being sold by the Treasury. So, while it was great to see rates tick down to the best level in two months, this could all change again very quickly. If inflation comes in hot and/or the Treasury auctions do not go as desired, this rate relief could be short-lived.

Mortgage Market Guide Candlestick Chart

Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 6.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

If you look at the right side of the chart, you can see how prices have bounced sharply high, providing rate relief.

Chart: Fannie Mae 30-Year 6.0% Coupon (Friday, June 7, 2024)

05/31/2024

Everyone is always asking me where the real estate market is heading. Here is a nice little update!

For the week of May 31, 2024 — Vol. 22, Issue 22
A Look Into the Markets

This past week interest rates moved sharply higher in response to a host of unfriendly bond news. Let's discuss what happened and what to watch for in the weeks ahead.
"So many tears I've cried. So much pain inside. But baby, it ain't over 'til it's over". It Ain't Over ‘til It's Over by Lenny Kravitz.

We Need More Revenue

This past week was shortened due to the Memorial Day holiday, but it was filled with tall problems which caused rates to spike. It all started on the Friday before Memorial Day when Treasury Secretary Janet Yellen told the world that the path for rates is higher, and we need more revenue.

This was an important statement as it highlights our deficit spending and our need to sell more treasury debt to fund our government.

The debt sales were tested this past week and ended up being a main driver for the spike higher in interest rates. The Treasury sold $183B worth of 2,5 and 7-yr Notes and the auction results were poor where buyers demanded higher interest rates to purchase all the debt. As Treasury yields move higher, mortgage-backed security prices drop, thereby elevating home loan rates.

Higher For Longer

Since the Fed Meeting back on May 1st, where the Fed Chair Powell said they are not hiking or cutting rates, many officials have since been pouring cold water on the idea that a rate cut is coming soon.

This past week, we heard comments like "Don't count out a rate hike" as the next move and "higher indefinitely" was uttered by another Fed official. This means those betting on a rate cut soon might want to reassess their position as the chance for the first cut has now been pushed back to November. And as we have seen over the last year or so, if inflation remains stubbornly high, we may not see a cut at all in 2024.

Higher Oil

Yet another problem for interest rates and the overall economy is energy prices. Oil hit $80 a barrel last week. This is significant as oil and 30-year mortgage rates tend to ebb and flow together. When oil prices edge higher so do mortgage rates. Why??

High oil prices are inflationary. If inflation readings remain near current levels or even edge higher, there is no way the Fed can cut interest rates which means higher for longer.

Consumer Sentiment Moves Higher

Bonds hate inflation, bonds hate more bonds and bonds hate good news. Despite the uncertainty about higher interest rates and elevated oil prices, the consumer sentiment reading last week was an upside surprise as people felt a bit more optimistic - breaking a trend of recent pessimism.

Bottom line: We should take the Fed at its word that rates will be higher for longer. Deficit spending and high energy prices will help fuel this notion.

Looking Ahead

Next week is jobs week. The Fed has a dual mandate of promoting maximum employment and price stability. The Fed's higher for longer narrative is based on inflation remaining high, but only if the labor market shows further weakness. The bad news could reignite talks for rate cuts sooner. The Jobs Report is supposed to show 151,000 jobs created.

Mortgage Market Guide Candlestick Chart

Mortgage bond prices determine home loan rates. The chart below is a one-year view of the Fannie Mae 30-year 6.0% coupon, where currently closed loans are being packaged. As prices move higher, rates decline, and vice versa.

If you look at the right side of the chart, you can see how prices have backed away from the best levels in a month.