Weekly Update

April 3rd, 2024 - #449

Good afternoon, gang,

Welcome to the latest weekly update. We just put the finishing touches on April, which means the year is somehow one third complete. Time flies when you’re having fun. We had a good month last month thanks to your referrals – we appreciate every one of them. Our editors worked overtime to find some great stories this week. Please forward this update to your friends, family, coworkers, or clients, who have questions about mortgage budget, credit, home loan items, etc. We’d love the opportunity to have a chance to talk to those folks who are looking to buy, sell, refinance, or renovate, and earn the chance to help. Rates bounced around this week but IMPROVED some, the results of which you can see just above the trivia question. Before you scroll down to those, as usual, there is LOTS GOING ON, SO LET’S GET STARTED.

CRAZY STORY

Last weekend was race weekend at Barber Motorsports. There were practices starting Friday, more practices and qualifying races Saturday, and then the Indy NXT and NTT IndyCar Series races on Sunday. There were festivals, food and car shows around the track, and as folks get to the track, they notice the Museum with its 1200 motorcycles and racecars and the art around the track. 

One of the most well-known actually was installed prior to the opening of the motorsports park in 2003. Created by sculptor Ted Gall, “The Chase” (picture above) took over a year to create and combine to weigh nearly five tons! There are also several very cool metal gates that depict cars, or a scene and there are Lions and Birds and horse sculptures as well some giant bug and spider sculptures. One of the pieces is includes an ant that is picking up a motorcycle. You can click the picture above to read more about the Art in the Park.



During the race last weekend, one piece of art wanted to get in on the action, even more than the ant carrying the motorcycle. Around lap 52, a mannequin fell onto the racetrack from her perch on an overhanging bridge. In the article linked below, the commentators explain that the mannequin, named Georgina, had fallen on the track and they wondered about whether the rate would have a yellow caution flag to slow the racers down and remove the debris. Around that moment, race leader, Alex Palou likely had the shock of his racing career to enter a corner, driving VERY fast and catch out the corner of his eye a human figure on the track. I very likely would not have reacted well to coming upon something like that at 100 mph. Click here to read the full article and click below watch the scene unfold. 

150 YEARS OF RUNNING FOR THE ROSES

Moving from perhaps the scariest moment on record for an IndyCar Race last weekend, to the “Most Exciting Two Minutes in Sports” this weekend. Tomorrow, May fourth will be the 150^th running of the Kentucky Derby. The favorites, Fierceness (5-2) and Sierra Leone (3-1), will take to the post to try to beat the rest of the field and long shots, Grand Mo the First, Society Man, and West Saratoga (all at 50-1 as of the writing of this section). Our editors love hearing about the stories behind each of the unique horse names so we wanted to provide a little bit about each of the 21 horses in the race and how they got their names, by clicking here.

Beyond the horse names, the Run for the Roses has been one of the most enduring sports events as it celebrates its 150^th Anniversary on Saturday. The Masters, a tradition like any other, has been going since 1934 (but wasn’t played in 1943-45 due to WWII.) The Indianapolis 500, known as “The Greatest Spectacle in Racing,” in spite never having a mannequin fall onto the track, has only been running since 1911 and was paused in 1917-18 and 1943-45. The US Open Tennis tournament, which was originally called the US National Championships, started in 1881, which was 143 years ago, but has been played every year since. The Kentucky Derby's 150 years, stands alone for its longevity and the generations that have watched since that inaugural running in 1875, a race won by jockey, Oliver Lewis, in front of 10,000 fans. To put the 1875 date in more perspective, thirteen states have joined the United States since the initial running. Click below to read more about the history behind this race.

Of course, when you think about the Kentucky Derby, some may immediately think about the amazing hats that are worn that are huge and gaudy and classy and amazing, often ALL at the same time. Gang, an unusual hat “designer” has stepped up this year with a unique spin on a Kentucky Derby hat – Panera Bread. Made to look like a bread bowl, Panera’s designed a hat to get in on the (food and) fun. Although it LOOKS like it could be eaten, it’s a 3-D replica of a bread bowl surrounded by colorfully dyed ostrich feathers. The hat ALSO came with a $100 gift card, which all cost a total of $21 plus shipping and handling. I know you’re probably thinking, “Heck, I’d pay $100 for that hat alone! I get some free food with it as well… what a deal.” Gang I have some difficult news – the hats are currently sold out in the Panera Online Store. But you can get on the list to receive notice if the restock. Click below to read more about the Derby Bread Hat.

MAY THE FORTH BE WITH YOU

Not to be outdone by a 150-year-old horse race, this Saturday is May 4^th, or Star Wars Day, as in May the Fourth be with you. Tough to pick between a tradition laden horse race and a space opera with more special effects than we know what to do with. Folks will be celebrating in a variety of ways, with several retailers like Wal-Mart, Target, Macy’s and Amazon running sales on their Star Wars merchandise, and this year is the 25^th anniversary of the release of Episode 1, The Phantom Menace. That movie will be re-released in theaters to commemorate the day. Click here to read more about the Movies, sales and celebrations.

Star Wars Day USUALLY comes with some unusual crossover or co-marketed event, and Birmingham Alabama is getting in on the action. The Birmingham Legion FC is offering up some special pricing and prizes for fans that show up dressed in their finest and best Star Wars gear for their game on May 4^th against FC Tulsa. Tulsa’s logo SOUNDS like it may be a Star Wars monster to avoid – the scissor tailed flycatcher, which is also the state bird of Oklahoma. Click below to read more about the upcoming Birmingham Legion Game. 

REAL ESTATE TO BEHOLD

We have a great renovation program and construction loan, BUT I’m not sure that the conventional loan limit of $766,550 will help with this next one. A waterfront home in Boca Raton, Florida, sold for a record-breaking $40 million. The buyer, Steven Dingle, a luxury home builder, plans to DEMOLISH the existing 1990s home and guesthouse and rebuild. That's right gang, it's a $40 million dollar tear down. The 1.7-acre estate, located in the prestigious Royal Palm Yacht & Country Club, was initially listed for $52 million and was most recently priced at $44.9 million. The property's value lies in its large acreage and approximately 400 feet of water frontage, which includes both the Intracoastal Waterway and a canal. The house itself is around 10,000 square feet and features two swimming pools, including an infinity-edge pool. Steven Dingle and his brother, Scott Dingle, are known for their spec mansions and recently sold another property in the Royal Palm community for $28 million, setting a record for Boca Raton at the time. Click below to read more.

Bidding on houses OVER their list price seems to happen in all sorts of price ranges, evidently for this next one, even at the higher escalated price point, the PRICE IS RIGHT. Bob Barker's Los Angeles home, previously owned by the late TV game-show host, was sold for $3.788 million, $800,000 over the asking price, after just a month on the market. The buyer, Julia Dempster, an interior designer, plans to update the property while preserving its historical integrity. The house, built in 1929, features four bedrooms, three full bathrooms, and two half baths, with original interior details like a hand-painted fresco, stained glass, and coffered ceilings. Dempster intends to consolidate kitchens, relocate the primary suite for garden views, and maintain the living room's character through careful restoration. Barker, who lived in the house for 54 years without making any changes, passed away in 2023 at the age of 99. Click below to see more and don't forget to "have your pets spayed or

neutered." 

THE ECONOMY AND REAL ESTATE

This week was Fed week, as Wall Street Traders, economists, and mortgage companies alike, watched the Federal Reserves’ interest rate decision and somewhat more consequential press conference following the rate announcement. The Fed maintained interest rates where they’ve been since July 2023, which aligned with what most everyone thought they were going to do. Inflation remains elevated, surpassing the FOMC's preferred levels. The statement said, ““The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” Certainly, rising insurance costs, whether for homeowners or vehicles, contribute to inflationary pressures. During the press conference, they did strike a positive tone remaining optimistic about economic growth, citing. Progress with strong job gains and low unemployment. Chairman Powell said, “Inflation is still too high, further progress in bringing it down is not assured and the path forward is uncertain.” BUT he did reassure investors by stating that path was “unlikely” to include a rate hike. The Stock market jumped after the remarks with eh Dow Jones up 500 points and pushing bond yields slightly lower. Click below to read the full article.

Today came the much-anticipated jobs report, which showed that there were 175,000 jobs created during the month of April, which was below expectations of 240,000. That total also contributed to the unemployment number edging up to a total of 3.9% higher than last month's 3.8%. Additionally, wage increases were lower than expectations, which all combined to be somewhat encouraging for future inflation readings. The market agreed with the Dow Jones, NASDAQ, and S&P all improving. Our Rates liked it as well... the results of which you can see in the chart at the bottom.

Rates continue to bounce around inextricably tied to any report or data about inflation. With that in mind, let’s close out with an article from Keeping Current Matters, titled,

What’s going on with Mortgage Rates?

You may have heard mortgage rates are going to stay a bit higher for longer than originally expected. And if you’re wondering why, the answer lies in the latest economic data. Here’s a quick overview of what’s happening with mortgage rates and what experts say is ahead.

Economic Factors That Impact Mortgage Rates

When it comes to mortgage rates, things like the job market, the pace of inflation, consumer spending, geopolitical uncertainty, and more all have an impact. Another factor at play is the Federal Reserve (the Fed) and its decisions on monetary policy. And that’s what you may be hearing a lot about right now. Here’s why.

The Fed decided to start raising the Federal Funds Rate to try to slow down the economy (and inflation) in early 2022. That rate impacts how much it costs banks to borrow money from each other. It doesn't determine mortgage rates, but mortgage rates do respond when this happens. And that’s when mortgage rates started to really climb.



And while there’s been a ton of headway seeing inflation come down since then, it still isn’t back to where the Fed wants it to be (2%). The graph below shows inflation since the spike in early 2022, and where we are now compared to their target rate:

As the graph shows, we’re much closer to their goal of 2% inflation than we were in 2022 – but we’re not there yet. It's even inched up a hair over the last 3 months – and that’s having an impact on the Fed’s plans. As Sam Khater, Chief Economist at Freddie Mac, explains:

“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates.”

Basically, long story short, inflation and its impact on the broader economy are going to be key moving forward. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“It’s the longer-term outlook for economic growth and inflation that have the greatest bearing on the level and direction of mortgage rates. Inflation, inflation, inflation — that’s really the hub on the wheel.”

When Will Mortgage Rates Come Down?

Based on current market data, experts think inflation will be more under control and we still may see the Fed lower the Federal Funds Rate this year. It’ll just be later than originally expected. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), said in response to the Federal Open Market Committee (FOMC) decision yesterday:

“The FOMC did not change the federal funds target at its May meeting, as incoming data regarding the strength of the economy and stubbornly high inflation have resulted in a shift in the timing of a first rate cut. We expect mortgage rates to drop later this year, but not as far or as fast as we previously had predicted.”

In the simplest sense, what this says is that mortgage rates should still come down later this year. But timing can shift as new employment and economic data come in, geopolitical uncertainty remains, and more. This is one of the reasons it’s usually not a good strategy to try to time the market. An article in Bankrate gives buyers this advice:

“ . . . trying to time the market is generally a bad idea. If buying a house is the right move for you now, don’t stress about trends or economic outlooks.”

Bottom Line

If you have questions about what’s happening in the housing market and what that means for you, let’s connect.

Have a great rest of the weekend. Stay safe out there. If you have any questions, please do not hesitate to call. You can contact me by email. Please, follow us on Facebook, Twitter, or LinkedIn. Thanks to many of you, we are continuing to expand our readership, so if you have a friend or client that you think may benefit from this newsletter, please feel free to forward it to them! If you got this from a friend, click here to sign up to receive it.

Today’s Trivia question: 

Check out the rates below—remember, there is a drawing to enter to win a gift card. This is your chance to enter for a chance to win the gift card awarded every other month. This trivia question is for the March & April drawing/card.

Pricing and rates remain erratic and volatile. Confirm rates & pricing directly with your loan officer.

TRIVIA QUESTION

Tomorrow is the Kentucky Derby, and some jockey and horse will etch their name into history, along side horses like Secretariat who still has the fastest time in not only the Kentucky Derby (1:59 2/5s), but also the Preakness and Belmont Stakes. Only Secretariat and one other horse completed it in under 2 minutes. There was only ONE Race that a time isn’t recorded, which was that first one in 1875. What Horse won the first Kentucky Derby?

A. Aristides

B. Vagrant

C. Hindoo

D. Baden-Baden

E. Mage

And for EXTRA TRIVIA CREDIT… What Horse won the SECOND Kentucky Derby?

Click here to EMAIL ME YOUR ANSWER.

Lemme hear from you.

**Email your answer to me to have your name entered in a drawing for a gift card at the beginning of odd months and YES you can go back and answer previous weeks’ questions if you have not answered them already AND if we have not unveiled the answer yet***

COMMUNITY CARES PROGRAM

Last week here and then we’ll move it to the bottom of the update. If you have any questions about the program, please feel free to simply reply to this email, or even better, forward this email to someone who you think may qualify and benefit from the Community Cares Program.

In February we announced the Community Cares Homebuying Program, which can work hand in hand with our Community Referral Program. This is not just for first time homebuyers, or just for primary residences, or just FHA or Conventional loans. This program will provide a credit of $500 towards closing costs of qualifying borrowers. What borrowers qualify? We wanted as many folks to qualify as possible so here’s the full list: active military, veterans, firefighters, paramedics, EMTs, law enforcement officers, and all other first responders. All nurses, doctors, and other health care professionals. Also, pre-k, elementary, secondary, and post-secondary educators, teachers, professors, and educational administrative staff. Non-profit organization employees. Click below to read more.