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💸 The Time Has Come

💸 The Time Has Come

Mortgage Rates DROP ⬇️ — Rate cuts on the way. Gift Funds and how to avoid the taxes. SAVE THE DATE, GTG's Oktoberfest is 9/28.

Glenn Groves
August 27, 2024

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Issue 87 - Good Morning and Happy Tuesday.

Note: There will be no newsletter next week. I’ll be traveling back from LA on Monday and will not have the time to prepare anything worthwhile. If there is market-breaking news, I will publish something in the meantime!

Well, it’s been confirmed. Jerome Powell came out last week and proclaimed, “The time has come” about the Fed’s economic policy and rate cuts.

Star Wars Episode III: Revenge of the Sith - 2005, 20th Century Studios vis Tenor

We’ve been waiting, and now we’re here. Rate cuts are confirmed for September.

The Bureau of Labor Statistics (BLS) issued a revision. March 2023 - March 2024 job numbers were 818,000 OFF, or 1/3rd of that was thought to have been created, which was the last nail in the coffin.

What you need to know in 30 seconds:

Mortgage rates have already experienced a sizable shift in the last 120 days.

30 Year Rates, May-August 2024

Do not expect a massive downward movement right away. Most of the cut has already been baked into the mortgage rates, and buyers are taking full advantage of it. Yes, rates will lower over the next quarter and into 2025, but waiting will hurt more than help as more buyers enter the market.

Personal note: I spent my weekend shaking the head cold these kids brought home after the first week of school. Go the whole Summer healthy as an ox. First week, bam, back in the petri dish of elementary school.

I caught up on some admin work that had been falling behind and prepped the truck for the drive down to LA for the fantasy draft.

🛦 See you in the trenches.

INTEREST RATES
Rates 📢 August 27th, 2024

10-Year-Treasury 1-Month Snapshot

Product	Rate / APR	Weekly Change
⬇️ Conv.	6.375% / 6.390%	-.125%
⬇️ Conv. HB	6.625% / 6.635%	-.250%
⬇️ JUMBO	6.750% / 6.759%	-.125%
⬇️ FHA 3.5% DP	5.500% / 6.419%	-.125%
⬇️ VA 0% DP	5.625% / 5.883%	-.125%

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

Rate Markets: We’re seeing a multitude of different lenders rise to the top of our rate sheets. You might also see some different lender names pop up when you talk to your lenders.
Bottom Line: Beware of turn times! We’re already seeing substantial slowdowns as lenders leave their pricing too aggressive for too long and become overwhelmed.

TIPS & TRICKS w/ Robby Dearth
Understanding Gift Funds

🎁 Gift Funds in Mortgage Transactions: Annual Limits and Lifetime Exemptions

Navigating the complexities of securing a mortgage often requires a deep understanding of available financial resources, including gift funds.

These funds can play a crucial role in helping homebuyers reach their down payment goals. However, when planning to use gift funds in a mortgage transaction, it’s essential to understand the differences between the annual gift tax exclusion and the lifetime gift tax exemption.

How to Reach $72,000 with Gift Funds

Person Giving	Recipient	Amount Given
John's Mother	John	$18,000
John's Father	John	$18,000
John's Mother	Jane (John’s spouse)	$18,000
John's Father	Jane (John’s spouse)	$18,000
Total Gift		$72,000

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TECHNICALS
100bps in 120 days?!

🏠 GTG Weekly: Quick Market Update

Top Stories:

Powell Signals Rate Cuts Ahead: Fed Chair Powell confirmed a rate cut is likely in September, focusing on a cooling labor market and declining inflation. Markets expect up to 100bp in cuts by year-end.
Existing Home Sales Rebound: July saw a 1.3% increase in sales, breaking a four-month losing streak. Inventory is up 20% YoY, but homes are still selling fast, with 24% above list price.
New Home Sales Surge: New Home Sales jumped 10.6% in July, with tight inventory driving up the median price to $429,800. Demand remains strong, even as rates moderate.
Jobless Claims Steady: Initial claims rose slightly, but continued claims suggest a tougher job market, with hiring slowing down.