Mortgage Update - October 7th, 2024
Good morning, team! We are officially in the fourth quarter of the year. Forget New Year’s resolutions, start the process now to prepare for 2025 before anybody else. The next 90 days are critical.
Let’s dive in!
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Read time: ~4 minutes
Jobs Shock WAY Above Expectations
The US economy added 254,000 new jobs, which was a SIGNIFICANT beat above the 147,000 expected.
Unemployment rate fell to 4.1%, down from 4.2%.
On paper, this report tells a far different story than what we’ve seen the past two months and feels contrary to some of the recent moves by the Fed. The US labor market is smoking hot 🔥🔥🔥🔥
Food services & restaurants along with healthcare saw the biggest gains.
July & August were revised higher by 72,000 jobs in total.
Mortgage rates bled on the news. Average 30 year fixed rate mortgage is now in the mid 6% range, up from the 6.1% lows from September.
Why?
Odds of a 50bps rate cut in November have dropped to just 3%, down from 50% just one week ago. While the markets still expect the Fed to cut rates, they believe it will be slower than expected on these hotter jobs numbers.
The S&P500 closed above 5,750 which is up over 21% in 2024.
The US economy is unbreakable.
Key Takeaway: This jobs report carried a lot of weight. Its on the heels of two big misses and one of the last before the election. With the sizable beat, mortgage rates experienced one of the biggest swings in recent months. Unfortunately it was in the wrong direction. Its hard to be upset knowing folks have employment options out there. Only time will tell if these numbers get revised, though.
The Return of Inflation
The economy dodged a bullet with the short-lived port strike on the east coast.
The implications were significant including disruptions in the supply chain, driving the price of goods higher quickly, job losses in related industries and the downstream economic instability affecting the ability of homeowner’s to pay their bills.
Though brief, Costco and many other retail shelves across the country were bone dry of major staples like toilet paper early in the week. I know because my wife definitely loaded up in preparation of weathering a much longer strike.
But signs of inflation are rearing their ugly head more broadly.
I saw the following video on TikTok and my jaw dropped. A Walmart shopper recently reordered an identical shopping cart from 2022, which included 45 items. Just two years ago, the total cost was $126. At the end of June 2024, the same cart added up to a whooping $414.
This gives us a frighteningly personal glimpse into how inflation over such a short period of time dramatically affects an average consumer.
Are You the Chosen One? 🙋♀️
This week, I had a conversation with an agent who was super bummed.
She’s been doing everything right. Tons of marketing, great events, posting daily on socials, but the leads just aren’t coming in the door.
She is not alone.
This type of feedback has become far too regular in our conversations with agents.
What can she do?
Learning how to unlock conversations to secure future referrals from anyone in your circle is a high-income skill.
We have prepared a script to help initiate these conversations. Deploy it 5x a week and watch your income 10x.