💸 $419,300 Median

Issue 79 - Happy Monday.

We’re leaving for a family vacation this morning (hence the earlier email!)

So naturally, a few contracts roll in, and other clients want to start making offers, scheduling pre-approval calls, and uploading documents requested months ago.

Sounds like I need to go on vacation more often.

🙏 It's a good thing Meg Peterson, Mark Wilson, and Melinda Sperbeck are holding down the fort while I’m gone! All systems remain in go status, and yes, I will have my phone and computer.

Some of you may have noticed a new platform for GTG Weekly! We are migrating from Active Campaign to Beehiiv for issuing the newsletter. It’s been a good 1 ½ year run on AC, but it’s time to level up.

So far, loving it. Better tools, resources, formatting, AND it’s about $100 a month, CHEAPER! On top of that, each issue will be hosted on a website and easily accessible later.

Great offer for those interested —> 🎁 30-day Free Trial + 20% OFF their first 3 months on any paid plan!

🪖See you in the trenches

PERSONAL
Air Cooled Affair

On Saturday, My dad and I participated in a casual rally for air-cooled cars only.

It was called the “Air Cooled Affair,” put on by Breakfast Club Rally. We were one of only about five VWs in attendance. It was a very Porsche-heavy event, and we loved it.

It’s always fun to talk to other gearheads and smell all that vintage exhaust!

The drive took us all over. It started in Tiburon, through Corte Madera and Mill Valley.

Through Muir Woods overlooking an ocean of fog from Panoramic Drive (sorry, I was driving and couldn’t take a pic) out to Point Reyes Station to regroup with everyone and then a winding drive to the new location of Old Caz Brewing in Rohnert Park for some well-deserved beers.

Some may ask, “Why?” because it’s the love of the drive. We met some really nice people and got to talk cars. Those are good times, for sure. We did our best to stay out of the heat, especially in a convertible…. The redwood cover and the coast helped a lot!

INTEREST RATES
Rates 📢 June 24th, 2024

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity.

• Rate Markets: With the exception of Jumbo, rates remain relatively unchanged from last week. Jumbo pricing usually lags behind pricing adjustments, as we see here. The door is open for sharp lenders/borrowers to utilize Jumbo pricing for high-balance scenarios when applicable.

• Friday, we will see the PCE report (aka inflation report), and experts think this could be good for rates.

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TECHNICALS
Supply & Demand 101

Are you telling me that with less inventory, prices continue to rise? No way.
There’s no huge wave of homes coming onto the market anytime soon. The stats below show that builders are not keen on a 2005-2007 run-up in building and overinflating inventory either.

Meanwhile, we will all continue to talk to the “I am waiting for the market to crash” or “My uncle said it’s not a good time to buy” crowd. They will look back in 5 years and regret not buying. Don’t give them too much of your energy.

Sales fell 0.7% in May, but I think we will see that come roaring back when the June numbers are released next month.

Opportunity remains for those buyers that embrace the mentality of:

• Can we afford the payment right now?

• Do we want to invest in our future?

• Rent is doing nothing for us.

• We have to live somewhere! 

📉 Existing Home Sales Slower but Median Home Price at Record High

• Sales Drop: Sales of existing homes fell by 0.7% in May, hitting a 4.1-million-unit annualized pace.

• Record Prices: Median home price reached a record high of $419,300, a 3% increase month-over-month and 5.8% year-over-year.

• Market Dynamics: Homes sold faster, with an average of 24 days on the market (down from 26 days in April), and 30% of homes sold above the list price (up from 27% in April).

• Inventory Boost: Inventory rose to 1.28 million homes, up 6.7% from April and 18.5% from a year ago, but still below a healthy level at 3.7 months’ supply.

Bottom Line: Despite slower sales, high demand and competition persist, driving up home prices and reducing time on the market.

🛠️ Home Builder Sentiment Hammered Lower

• Confidence Drop: Home Builder Confidence dropped to 43 in June, below the key threshold of 50.

• Index Components: Current and future sales expectations, as well as buyer traffic, are all in contraction territory.

Bottom Line: Persistently high mortgage rates and challenges like higher construction loan rates, labor shortages, and a lack of buildable lots are dampening builder sentiment.

🏗️ Housing Starts, Permits Lower Than Expected

• Housing Starts: Fell 5.5% from April to May, with single-family home starts down 5.2%.

• Building Permits: Also moved lower, indicating a slowdown in future construction.

Bottom Line: The decrease in construction activity could limit future supply, potentially supporting home price appreciation and wealth building through homeownership.

🛒 Flat Retail Sales: Start of a Slowdown?

• Retail Sales: Only 0.1% higher from April to May, with April's sales revised to a 0.2% loss from March.

• Economic Indicators: The Fed will monitor retail sales closely, as consumer spending impacts economic health and monetary policy decisions.

Bottom Line: The slight increase in retail sales was below estimates, signaling potential economic slowdown and influencing Fed policy.

👷 Watching Trends in Jobless Claims

• Initial Claims: Fell by 5,000 to 238,000, while continuing claims rose by 15,000 to 1.83 million.

• Labor Market: Elevated levels of jobless claims suggest a slowdown in hiring.

Bottom Line: The Fed is closely watching jobless claims trends to gauge the labor market and make informed decisions on rate cuts and monetary policy.

📅 What to Look for This Week

• Tuesday: Appreciation data for April from Case-Shiller and FHFA.

• Wednesday: May’s New Home Sales.

• Thursday: Pending Home Sales and Jobless Claims.

• Friday: Key inflation update with Personal Consumption Expenditures (PCE).