Issue 109 - Hello and Happy Tuesday.

It looks like the M&A action (merger and acquisitions) is heating up. Rocket is buying Redfin. Just a matter of time before we hear what Realtor.com and Zillow are working on in the back rooms.

Let the AI wars begin…

The industry is moving faster and faster as technology continues to evolve daily. It is becoming harder to keep up with the launch of new AI models and LLMs all the time.

I am confident that there will always be a need for human professionals in Real Estate and Mortgage. 

I think the pendulum might swing back to in-person meetings (or at least face-to-face “zooms”) pretty quickly, as the consumer will soon be overwhelmed with instant mortgage options and on-demand showings.

The consumer will crave authenticity, and that’s where we will come in… you and me, the real pros that can connect and really understand the wants and needs of today’s home buyers.

TLDR (Too Long Didn’t Read) Summary

• ↔️ RATES - Not a whole lot of movement.

• 🏡 INDUSTRY - Rocket Companies to Acquire Redfin.

• 📊 TECHNICALS - Labor market woes may lead to Fed action.

INTEREST RATES
Rates 📢 March 11th, 2025

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. www.nmlsconsumeraccess.org

Rates: Little roller coaster last week with a mixed bag of rates here.

💰 CPI Preview:

• Headline inflation expected 2.8%-2.9% YoY – progress!

• Core inflation could drop to 3.1%-3.2%, but shelter costs (44% of core CPI) remain key.

• Energy prices ⬇ 6% & used car prices ⬇ 0.7% – potential inflation relief.

👉 Bottom Line: Inflation progress, but rates stay bumpy. Watch shelter costs for real impact!

INDUSTRY
🚀 Rocket Companies to Acquire Redfin

In a significant move within the real estate industry, Rocket Companies, the parent company of Rocket Mortgage, has announced plans to acquire Redfin, a leading digital real estate brokerage, in an all-stock transaction valued at $1.75 billion.

Key Details of the Acquisition:

• Transaction Value: Redfin is valued at $12.50 per share, representing a 63% premium over its recent average price. ​

• Company Integration: Upon completion, Rocket Companies' shareholders will own approximately 95% of the combined entity, with Redfin shareholders holding the remaining 5%. ​

• Leadership: Glenn Kelman, Redfin's CEO, will continue to lead the Redfin business under the Rocket Companies umbrella. ​

Implications for the Real Estate Industry:

• Enhanced Client Experience: The merger aims to create a seamless homebuying journey by integrating Redfin's property listings with Rocket's mortgage services, potentially simplifying the process for clients. ​

• Increased Competition: This consolidation could intensify competition among real estate platforms, prompting other companies to innovate and enhance their offerings. ​

What This Means for Realtors:

📌 More Big Tech Control – Rocket may push its own mortgage products harder, limiting options for buyers and agents.

📌 More Competition – Redfin’s discount agents could get a boost, putting pressure on full-service Realtors.

📌 Better Tech, But for Whom? – Faster transactions are great, but will agents benefit or be sidelined?

📌 Referral Model Shakeup – Will Rocket keep Redfin’s Partner Agent program or steer deals to in-house agents?

📌 More Disruption Ahead – Zillow, Realtor.com, and now Rocket-Redfin—staying ahead means doubling down on personal service and strong local relationships.

As the industry evolves with such significant mergers, staying informed and adaptable is crucial. This acquisition underscores the growing importance of technology in real estate, highlighting the need for professionals to embrace digital tools to remain competitive.

TECHNICALS
Labor Market Weakness: Will the Fed Cut Rates Sooner?

The labor market is showing cracks, and if this trend continues, the Fed may have no choice but to cut rates sooner than expected. While home prices remain strong, slowing wage growth and rising layoffs could impact buyer confidence, making affordability a key concern.

📉 February Jobs Report Misses Expectations

• 151,000 jobs added, below forecasts.

• Unemployment up to 4.1%.

• Household survey reports 588,000 job losses—a major red flag.

• Full-time jobs down 1.2 million, replaced by part-time work.

💡 Impact on Rates: Weak labor data could push the Fed toward rate cuts sooner, improving affordability for buyers.

🏢 Private Sector Hiring Stalls

• 77,000 jobs added—less than expected.

• Job losses in trade, transportation, healthcare, and tech.

• Wage growth slowing, reducing buyer power.

💡 Impact on Rates: Economic uncertainty may lead to lower rates, making home loans more attractive.

🚨 Layoffs Surge While Jobless Claims Remain Low

• Unemployment claims fell to 221,000, but...

• 1.89 million continuing claims—highest in nearly 3 years.

• 172,000 job cuts announced—biggest spike since 2020.

💡 Impact on Rates: If layoffs continue, the Fed may act sooner on rate cuts, boosting buyer confidence.

🏡 Home Prices Still Rising

• Home prices up 3.3% (CoreLogic), 3% (ICE).

• Forecast: 3.6% annual growth ahead.

• $600K home = $24,000 equity gain in a year.

💡 Impact on Rates: If inflation slows and labor weakens, rates could dip, creating a great buying window.

🔎 What to Watch This Week

• Tuesday: Job Openings Report (JOLTS)

• Wednesday: Inflation Data (CPI)

• Thursday: Producer Prices (PPI) + Jobless Claims

💡 Big Picture: If labor weakness continues and inflation cools, mortgage rates could see relief soon.

👉 Want to prepare your buyers for potential rate changes? Let’s strategize!

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