Mortgage Update - January 13th, 2025
Our thoughts and prayers are with those affected by the wildfires on the west coast.
I hope the insurance companies feel every citizen’s eyes on them and how they respond. We’re ALL watching. From North Carolina to California. Don’t play games, get to work.
We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!
Read time: ~4 minutes
US Payrolls Added 256K Jobs in December 🤨🤨
Nonfarm payrolls added a shocking 256,000 jobs in December, which beat the snot out of the forecast of 155,000 and the 212,000 added in November.
The unemployment rate dropped to 4.1% from 4.2%.
By industry, healthcare added 46,000 jobs, retail added 43,000 (to prep for the holiday season), leisure & hospitality up 43,000 and government up 33,000.
Revisions to October and November removed a minimal 8,000 jobs total.
As a result, Wall Street’s outlook on Federal Reserve rate cuts have been revised at a number of high-profile firms:
Goldman Sachs & JP Morgan - Revised DOWN to 2 rate cuts this year, first one expected in June 2025
Bank of America - Expects ZERO rate cuts this year, expects HIKES more likely than cuts
Citigroup - Rate cuts expected to begin in May 2025, pushed out from January 2025
Mortgage rates moved to their highest levels since May 2024.
Key Takeaway: And this is precisely why interest rates shot higher on Friday. The markets are pricing in far fewer rate cuts in 2025 based on the limitless strength of the US labor market. We get CPI (inflation) data this week, which is our next opportunity to see a swing in rates one way or the other.
Medical Collections Out—A Healthier Credit Score In! 🩺➡️💳
The Consumer Financial Protection Bureau (CFPB) announced Tuesday that they finalized a rule that will remove ~$49B in medical bills from credit reports. Additionally, lenders will no longer be able to consider unpaid medical collections as a credit history factor when they review candidates for mortgages, car loans or business loans.
How will this impact consumers?
1 in 5 Americans have at least one medical collection. Once removed, credits scores are expected to jump by an average of 20 points.
The CFPB states this change should lead to the approval of 22,000 additional mortgages annually.
Key Takeaway: See ya, medical collections! This is awesome news for many Americans with credit scores being dragged down by medical collections. The CFPB was fed up with consumers frequently receiving inaccurate bills or being asked to pay bills that should have been covered by insurance. Amen! It amazes me how complicated the healthcare/medical insurance industry has become and this ruling by the CFPB is welcomed.
TikTok Ban Incoming? Here’s What to Know 📱🚨
One of my 2024 goals was to start putting educational mortgage content on TikTok for the Gen Z but I’ve been super-hesitant ever since rumors started to spread of a nationwide ban on the app.
As we all know, TikTok is the popular app where people share short videos (like dances, recipes, funny moments, etc.) owned by ByteDance, which is based in China. Recently, some US leaders worry that the Chinese government might be using TikTok to collect information on American users or spread misleading content, which they see as a threat to national security.
In April 2024, the US government passed a law requiring ByteDance to either sell TikTok to an American company or face a ban in the US. The deadline for action is January 19th, 2025.
On Friday, ByteDance and TikTok took arguments to the Supreme Court suggesting the law violates the First Amendment. During the session, it appeared as though the justices agreed with the national security concerns and might uphold the law. As such, betting markets shot much higher on the potential of a TikTok ban.
Key Takeaway: TikTok is heavily used in the real estate world by many realtors and mortgage lenders to help educate and market to the younger generation. Without this platform, many are going to have to pivot to other apps to continue doing business. Do you have a backup plan?
Are You Ready to REbel? 💪
Did you attend Rise & Thrive 2024 with us? It was a first-of-its-kind event here in central Ohio designed to help provide agents value like they’ve never experience before.
In 2025, Kreg and I challenged ourselves to up the ante, and of course we are delivering.
We’ve partnered with Ryan, from AgentLaunch, and Justin, from DR Horton, to help make this year’s event bigger, edgier, more fun and more valuable.
Mark your calendars for February 13th, but in the meantime, sign up for our Zoom event on January 29th where we will reveal our exciting guest speaker for the first time AND open ticket sales before the public launch. We can’t share all the surprises yet. More details SOON 💪💪