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    February Newsletter – Mark Cohen’s insights on interest rates, mortgage loans and economic news

    Welcome to my February newsletter featuring personal insights and advice on the mortgage rates, plus economic news that affects our local housing market.

    Interest Rates

    The Fed’s move to raise interest rates starting next month has created speculation on how much mortgage interest rates will increase in 2022. For example, a report released this week from the economists at Redfin predicts the 30-year fixed-rate mortgage will rise to 3.9% by year-end.

    My take? No one knows for sure, but most loan products have been on a steadily rising trajectory since early January. At this point in time, it is difficult to see rates decreasing, however, a lot of the rate increases for the short term have already been priced into the market. Also, bear in mind rates are still below pre-pandemic levels.

    Local Trends

    Clients are taking advantage of plentiful loan options and rising equity in the real estate they own by pulling cash out to finance more properties, remodeling their current home, or other general investments. I have never seen so many loan options with simplified terms – especially for self-employed borrowers. For instance, I am one of the few originators in the country who can offer bank statement loans up to $10M along with certainty the deal will close if I give an initial “thumbs up”.

    Here are some interesting bank statement loans we have closed in the last 30-days

    New Home Purchase | Topanga | $9.5M
    Secured a $6M interest-only loan qualified with Bitcoin, and no tax returns.

    New Home Purchase | Santa Monica | $8.5M
    I closed an interest-only loan in 27 days for a client with 70% financing and no tax returns.

    New Home Purchase | West Los Angeles | $3.78M
    Buyers opted for 85% financing; I was able to get them a rate in the mid-3s and no PMI.

    Re-Finance | Beverly Hills | $8.5M value
    Arranged for a $5M all cash-out loan, no tax returns, 4.1% APR, and no previous banking relationship with the lender required.

    Economic News Impacting Our Housing Market

    Jobs Report

    The U.S. Bureau of Labor Statistics Employment Summary reported a surprising addition of 467,000 jobs in January, but the unemployment rate remained unchanged at 4%. For the time being, the job market is robust, and substantial numbers like this are propelling the economy and the real estate market, but unfortunately is also adding to inflation woes.


    The Core Consumer Price Index, which measures inflation in the U.S., will release January numbers next week. Since supply chain constraints and port capacity issues are still plaguing our economy, we may see a slight increase over the current inflation rate of 7%.

    Many economists and the Fed predict high inflation numbers will begin to recede in the next few months, and by this time next year, hopefully, the tone of inflation fears will be greatly reduced. Inflation, however, will have little impact on our local housing market because the driving force in rising prices is low inventory.

    Key Economic Reports to Watch for This Month:

    February 10 – Core Consumer Price Index (CPI), U.S. Initial Jobless Claims

    February 11 – Fed Monetary Report, Core Retail Sales

    February 17 – Building Permits and Housing Starts

    February 18 – Existing Homes Sales

    February 24 – New Home Sales, GDP Q4

    February 26 – Pending Home Sales

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