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. Big Week of News Ahead 🗞️

2. Last Week’s Negative Pressures & What it Means for Buyers 🛖

3. Should the market hinge on the words of Fed officials? 🗝️

By the way, this article - MF Lending: Best of '23 | 2024 Predictions - is the most clicked link in this newsletter, you should check it out if you are interested.

Was this email forwarded to you? Subscribe to get it directly!

Rates Today 📈

Big Week of News Ahead 🗞️

Two key pieces of economic data is being released this week:

1. Thursday’s Q4 GDP report

2. Friday’s PCE report.

These will be the last pieces of economic data the Fed can go off of before their meeting next week. Throughout January, all data has pointed to the economy heating back up - exactly what the Fed does not want to see. Job loss was down and retail sales was up.

Hopefully, we will see a cooler GDP and PCE report to give the Fed some positive data points.

The Fed has entered its “blackout” period this week, so we will not be hearing from any Fed governors about the state of the market. This is all leading up to the first Fed meeting of 2024 on Jan 31.

Right now, do not expect a cut - CME Group is currently showing a 97% chance of the Fed holding rates in their first meeting.

Last Week’s Negative Pressures & What it Means for Buyers 🛖

Last week, we saw extremely negative pressure on the bond market, resulting in rising interest rates. This came, primarily, from a speech made by fed Governor Christopher Waller:

The basic premise of the speech was that the Fed needs to move slowly. Unlike the whiplash we saw in 2021. This led investors to pull back on their forecasts for potential rate cuts in March, moving many projections out to May 1st before the first cut.

What does this mean for buyers?

Over the last few weeks, we have been discussing the window of opportunity present in today’s market. While rates are still elevated (climbing back up to around 7% last week), the market is still seeing limited buyers.

This gives buyers in the market added leverage on homes listed for sale.

Just in the last week, I have worked on contracts for clients with 3-4% of the purchase price in seller concessions. Those are incredible numbers. Clients are getting 2/1 buydowns at record numbers, plus having closing costs paid for.

Two clients I am working with are getting a 2/1 buydown and bringing only their down payment. 

Yes, rates will likely fall mid/late this year, but, as Waller said above, it will be slowly falling. We will likely still see rates above 6% all year.

If I were an agent advising a client, I would highly recommend getting in now while the sellers have to sell their homes.

Should the market hinge on the words of Fed officials? 🗝️

The Cul-de-Sac

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

Please forward this to your friends and colleagues if you found it valuable.

— Michael F DiLucchio