On a different topic, my wife and I argue about this annually. I’m just surprised it has started so early this year. I mean, this is early even for us.
I texted her Friday afternoon to let her know I didn’t feel like cooking. I’m the cook in the house but didn’t have it in me that night.
The reply? “OK, I need to go to Ulta.”
That’s code for “I need to go to Ulta, and you are coming.”
Do you know why we were going to Ulta?
Christmas shopping. Grandma left cash for some holiday gift cards.
It’s mid-October. Not mid-November or December. It’s mid-October.
We’re leaving, and she says something to the effect that maybe Christmas shopping will end early this year.
Here’s the rub… it won’t end early, and there is no budget. Any conversation about that not being the case is a charade. 😊
Appraisal Update
A quick note regarding the appraisal changes.
As noted in previous commentaries, the format for a conventional appraisal (VA and FHA are not impacted) is changing. Any loan being delivered to Fannie Mae or Freddie Mac after November 3 requires the new format.
Many lenders, including us, have begun ordering the new form.
Not every appraiser is ready. There is new software, training, etc., and not everyone is prepared.
A few appraisers I spoke with said they would be ready by the beginning of November, but they aren’t able to handle requests using the new format just yet.
What we’re generally seeing is that turnaround times are a little longer, and some appraisers are charging higher fees.
We’ll keep an eye on this.
I think ultimately everyone will get used to the new format, and turnaround times won’t be affected. That said, these appraisals do take more time, more training, and updated software, so I expect costs to rise a bit.
We’ll monitor and keep you apprised.
Market Notes
Last week, we talked about signs that rates may have hit a ceiling. We saw some notable buying when yields hit their highest marks in many years.
The wild card for last week was going to be the inflation data.
Well, we got it, and it was not great.
Consumer inflation was notably higher than expectations (I feel like the expectations were too soft to begin with, but I am not an economist), and the inflation was broad-based, meaning it wasn’t just tied to energy costs.
After that data was released Wednesday morning, we saw a notable sell-off early.
Then, wouldn’t you know it, buyers came in, and by the end of the day, we were at the same levels as before the release.
The following day, Thursday, we saw more buying, with the 10-year Treasury (the industry benchmark) falling as low as 5.08%.
This is some 25 basis points lower than the highs we saw, and that happened literally in a matter of days.
Very interesting.
The early discussion is about tech companies and AI, how those stock prices may be inflated, and the potential for economic weakening given the elevated inflation data.
We’ll see where this leads.
For now, rates are some .25% lower than their peak a couple of weeks back.
We’ll get a little better view this week and share that in the next update.
Looking Ahead*
Hope everyone enjoyed a cool fall weekend.
Please feel free to call with any preapproval needs or mortgage questions.
I’ve been tasked with scrubbing and cleaning the bathroom. I will need a break. 😊
-Steve-
*All loans are subject to credit approval and program guidelines.