Morning! This is MF Lending - the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Here’s what we’ve got for you today:

1. Job Market - is it beginning to soften? 🎥

2. Investors pull back…for now 🏚️

3. Today’s Economic Data 🧮

By the way, this article on Housing Bubble? is the most clicked link in this newsletter, you should check it out if you are interested.

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Rates Today 📈

Job Market - is it beginning to soften? 🎥

Federal Reserve governor, Christopher Waller was on CNBC yesterday giving his take on the current job market. Here are a few highlights from the interview:

• The recent data will allow the Fed to proceed carefully…and see if things continue. The Fed does not need to make any drastic moves, they can move more strategically.

• There have been two good inflation reports in a row indicating that we are on the right track

• Unemployment rate rising - “data last week indicates the job market is starting to soften”. We are roughly where we were a year ago in terms of the job market.

• It’s tough to say we have avoided a recession. Recessions typically happen in a shock event, they don’t happen gradually - but the data has been looking very good.

Investors pull back…for now 🏚️

Investor home purchases fell 45% from a year earlier in Q2, according to a Redfin study.

With limited inventory and rising interest rates, it has made it much less attractive for potential investors to purchase in this market.

Here are some of the stats from the Nashville Metro -

Investor purchases have dropped to 15% of overall purchases in Nashville. This should be extremely encouraging to potential first-time buyers.

In 2020 and 2021, new buyers may have had attractive interest rates, but they had to compete with investors who were offering way over list price, all cash. There was a point in 2021 where investors were 66% of purchases in some cities.

Although interest rates are elevated, it may be time to look into options at price points between 350-400k for clients who may want to purchase their first home. Purchasing something now will save them from a not-so-distant future when these investors reenter the market in a big way.

Here are some other interesting stats from the study:

• Investors had the highest market share in Miami (30%)

• Highest share of investor-owned properties selling at a loss Detroit (14%)

You can see the full list of metros here

Today’s Economic Data 🧮

This morning we received Jobless claims for August. This tracks unemployment claims.

Forecasted - 234k | Actual - 216k

This is the first negative piece of news we have seen in a few months. This report shows the labor market may be stronger than we think with LESS people claiming unemployment.

Interestingly, this did not have an immediate negative effect on interest rates this morning and the bond market is actually up. It appears that the market is digesting this relatively easily, but we will see how this plays out throughout the day.

Hopefully, this is not the canary in the coal mine.

Thanks for reading - that is all we have for today 😎

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— Michael F DiLucchio