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    February Update – Interest Rate Forecast

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

    Employment Reports

    Employment data dominated yesterday’s economic headlines. The Bureau of Labor Statistics Employment Summary reported a rather shocking addition of 353,000 jobs, and the national unemployment rate remained unchanged for a second month at 3.7%. Wages also climbed by 0.6%. However, analysts partially blame the larger-than-normal jump in January’s weather — lousy weather means fewer work hours, which pushes average wages higher.

    Additionally, the Jobs Opening and Labor Turnover Survey (JOLTS) data noted a slight increase in job openings in the U.S. — 9M openings versus 8.8M last month.


    Interest Rates

    While Friday’s wage and unemployment report presented challenges for a widely anticipated March rate cut, there are still reasons for optimism. Other economic indicators, like declining oil prices and an improving global supply chain, suggest a slowdown in inflation. So, while a March rate cut may be less likely, it’s not entirely out of the question.

    Predictably, bond market yields also took a hit yesterday following the employment report, which drove mortgage rates a bit higher. Small increases like this are temporary, but we may see some additional movement in rates if this month’s inflation report has any surprises.

    Here are some key loan products with competitive rates we have available to meet your needs:

    • 5.75% for 10YR jumbo ARMs up to $5M with income documentation, banking relationship required

    • 6% on a 30YR fixed rate loan up to $5M with income documentation, banking relationship required

    • Rates for bank statement loans, depending on loan-to-value, are in the 7.5% range, with a strong credit score and a lower loan-to-value

    • With a strong depository private banking relationship rates are in the mid 5% range


    Economic Reports Impacting Our Housing Market

    Local Activity & Recent Transactions

    While the LA housing market is no longer experiencing the red-hot growth of the pandemic era, it is not a buyer’s paradise either, especially under $2 million. Buyers are still frequently competing for properties, so pre-approvals and, even better, coming into an offer fully underwritten for mortgage financing is the way to go if you want to win in a multiple-offer scenario. Please contact me to discuss options if you are looking to buy, or have a client who has not taken this important step towards winning in a multiple-offer scenario.

    Recent Closed Loans – All Closed In 3 Weeks!

    Line Of Credit (HELOC) | Malibu | $3M
    80% LTV Financing

    New Home Purchase | Hollywood Hills | $3.6M
    80% LTV Financing
    Profit and loss statements only
    No bank statements required

    New Home Purchase | West LA | $5.8M
    80% LTV Financing
    Interest rate in the low 6’s
    Full income documentation

    New Home Purchase | West LA | $1.7M
    90% LTV Financing
    10/1 ARM
    Interest rate in the mid 6’s


    Key Economic Reports to watch for this month:

    February 13 – Core Consumer Price Index (CPI)

    February 16 – Building Permits, Housing Starts

    February 22 – Existing Home Sales
    The economy, LA housing market, and rates are always evolving. Contact me today for a personalized consultation and guidance on securing a mortgage loan or home refinancing. I am here to help you achieve your financial goals in this dynamic environment.

    Mark Cohen

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