Happy Friday, Brian Manning here with the weekly update. Let’s get right to it.
So, stocks were on a wild ride this week, on-again off-again negotiations regarding the stimulus package. I mean, it’s something that’s desperately needed. You have airlines in trouble, small businesses that need help… Hopefully we get our act together there and see what can get put together. But yes, it did create a wild ride for stocks this week.
Wednesday of this week, we got the Fed minutes. So the Fed minutes were from the Federal Reserve meeting last month, and last month is when they announced that they will keep the Fed rate at 0% until 2023. And the minutes showed that this was really not a unanimous decision on all of the Fed voting members, so one thing to keep in mind and really to be aware of is that the Fed funds rate is an overnight rate, this is not mortgage rates. So this doesn’t mean that mortgage rates will be at 0% because they’re not. In fact, the last time the Fed had a long-term approach and they left rates at 0 mortgage rates went from 3.5% on a 30-year-fix to 4.625%. So mortgage rates are not directly tied to the Feds funds rate and you can see a difference there. And I will definitely anticipate, you’re going to see rates go up in the future for multiple reasons. One of them is what we’ve talked about in the past, this is going to be inflation. As the world has really, kind of, gotten itself back together and I know everywhere you go right now you see more traffic on the highways, airports are slightly busier, people are buying more goods, etc. So as you see more and more activity, that means that there’s a stronger demand. And the supply chains are being challenged right now, because not everyone is going back to work for various reasons, so as we’ll potentially see inflation coming into the future. And this is something that’s going to cause mortgage rates to go up and there’s just no way around it.
Thursday of this week and every Thursday, we get initial jobless claims. We’ve been paying very close attention to this because of the pandemic situation that we’re in, but this week California messed up and they were not able to report their numbers, and the challenge is that, for initial jobless claims California makes up 20%-25% of initial jobless claims across the country. So the numbers this week, just really weren’t that accurate there. Still currently floating at around 25.5 million people unemployed which is insane. if we look back at the same exact week last year, in last year, in 2019 we had about 1.4 million people unemployed so it’s just crazy to see the impact that this is having right now. Today, we got some information on forbearance, and forbearances are down 18%, so many people that went into a forbearance program for their mortgage, they went into it about 6 months ago, most forbearance programs were a 6-month program and we’re starting to see people drop off there now which is really good to see. So, 18% is the reduction of people and forbearance for their mortgages.
Don’t forget – next week, Thursday October 15th, Fall Fiesta. McDevitt’s Tacos, we’d love to have you. It’s a socially-spaced event, there’s two options. You can do a drive-thru meal pickup or you can pick up in person, there’s going to be live music we’re super excited to pull this event off this year, we’d love to see everyone. Please make sure you are RSVP, the link is in this email and we’d love to see you out there. I’m also available all weekend, if you have any questions – let me know. I’d love to help you with your pre-approvals and answer any questions you have. Reach out to me in any time.
Call me or text me on my cellphone. Happy Friday, have a great day.