Mortgage Market Update - "TBD" - Warning Lights (recap Oct 14 -20, 2024)

The economy flashes warning lights that dramatically impacted a short-lived #refinance and #purchase #mortgageapplication boom.? I cover why the shift halt of #mortgageapplications at a national bank and rapidly reversing #rates cause many cautious #homebuyers to pause.? Read the headlines impacting the #realestate?market, #mortgagerate trends, and the #finance sector in this week's mortgage market update...plus, I share how I am taking my own advice and seeing an expert about some warning lights I saw this week.

• TD Bank announced it will no longer offer correspondent #lending and will instead focus on a "retail-oriented customer franchise model" following TD Bank pleading guilty in a criminal money laundering case and agreeing to pay $3 Billion in fines along with receiving growth restrictions in a similar settlement to Wells Fargo in 2018, which ultimately resulted in Wells Fargo, once one of the nation's leading mortgage lenders, limiting mortgage production to a relatively restricted footprint.? TD Bank seems to be following a similar path.
• #MortgageRates jump quickly to highest levels since July.? With no real new economic data, there's no great explanation for the extent to which bonds are losing ground this morning.? However, the 10yr Treasury yield started October at 3.73 and ended Monday at 4.20, dragging rates up.
• Rising mortgage #rates squeezed the momentum out of the short-lived homebuying boom in early October as mortgage applications fell 17% for the week ending Oct. 11, according to the Mortgage Bankers Association (MBA). The #MBA’s Refinance Index took an even larger hit, falling 26% from the previous week. However, #refinancing remained 111% above the same week in 2023.?
• Market volatility since the September #ratecuts nearly ensures that the #mortgagerates will remain volatile through the end of 2024.?
• The #mortgage industry and #Congress request executive action, noting a near-monopoly in the credit scoring market costing homeowners.? Since 2022, the cost to acquire a #FICO credit score has jumped by a whopping 400%, with that cost being passed on to the consumer as market forecasts anticipate another price hike next year.

A bright orange #warning light came on in our minivan last month. ?I had just taken the car in for the 100-mile #checkup and the car was in good shape. ?Knowing that it comes on ever time we need an oil change, I thoughtlessly reset it. ?Then, last week it popped up again, only this time I cannot reset it. ?Now, I could ignore it or try to fix it myself, but I am no mechanic. I learned to drive living in NJ, where it is illegal to pump your own gas...so even that took some adjusting at one point.? I can change a wiper blade, headlight, a few filters, and I am great at cleaning a car...but that is really the extent of my automotive maintenance abilities...and I know my limits.? So, I was still tempted to ignore it, but when a warning keeps presenting itself...it is best to at least look into the warning signs and see an expert on the subject.?So, I am typing this from a hotspot in the lobby of my trusted local auto mechanic.

Lately it seems #banks, #mortgagelenders, #realtors, and basically everyone in #financialservices has earned a reputation just above politician and just below car dealer/mechanic on the trust scale. ?Still, when you see warning lights, it is best to turn to those who specialize in the topic. ?As you can read in the headlines above, we expect #mortgagerates to endure a volatile Q4. ?Markets were looking for (and pricing in anticipation of) at least a .75% #fed policy #ratecut by the end of 2024. ?That is now falling to maybe only a .25% cut, with most speculation hoping the cut comes in November, which would still leave room for a potential cut in December. ?

The warning lights will flash in the #economicdata and rate trends. ?So,when navigating this market, it is important that current #homeowners (looking to refinance) and #homebuyers stay in close contact with a trusted #lender to:

• Set Refinancing Goals - If purchased a home in 2023 or 2024, speak with your #lender (by that I mean me) to set-up your goals. ?Discuss the savings you want to achieve. ?Have your file updated and ready to go so that when the savings light flash?you can act quickly to grab the savings, while they last in a volatile market.
• Keep Pre-Approvals Current - Run offer specific #LoanEstimates to verify that your approval is in good standing (at the current rates and terms) to verify that your offer is still on #personalbudget.
• Stay on #Budget - Depending on your timelines you may decide to lock or float your loan. ?Speak with your lender to develop a budget and plan. ?Know your ideal savings and worst-case scenarios. ?These can act as "warning lights" on your file. ?The lender can help you watch the daily trends and ensure you lock within your budget.

Now the outcome of my car's warning lights are still TBD. But when it comes to your #home, work with someone you can trust to be a teammate in your #homebuyingprocess and a partner throughout your #homeownership journey. ?A trusted #lender should get to know your goals, create plans (using language you understand), and share all your options transparently so that you can make well informed decisions. ?Your home is an investment...and expensive investment...so, when warning lights are flashing, see a trusted expert who can help you address any potential "warning lights" before they become hazards.

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