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    April Forecast – Will Interest Rates Go Up?

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

    Interest Rates

    Yesterday marked the beginning of a new quarter and an economic chapter that remains uncertain. According to Freddie Mac, the average rate on a 30-YR fixed-rate mortgage jumped 24% in March – a record for mortgage rates. There has been some claw back in the past few days, but inflation, rising prices, and instability in Eastern Europe will likely continue to drive short-term volatility in interest rates.                           

    On a positive note, I am seeing signals that rates will start to moderate because inflation drivers like oil prices and freight costs are coming down.

    Another trend I have a close eye on is the bond market yield curve inversion. This week the 2-year and 10-year treasury yields inverted for the first time since 2019. The inversion means that it is now cheaper to borrow long-term than short-term. For economists, the inversion of the curve is a signal that the economy could be moving towards a recession.

    Local Trends

    Our volume on purchase loans is still strong even though rates have gone up because demand continues to exceed available inventory, which stands at about a two-month supply in most areas of Los Angeles. I am, however, seeing an uptick in our deal flow on bridge, swing, and ARM financing because home buyers are thinking more creatively about how to get into the property they want.

    Here are some examples:

    New Home Purchase | La Canada | $2.5M

    I completed a 10-1 adjustable-rate mortgage (ARM) loan at 3.65% APR for this homebuyer who financed 90% of the purchase price.

    New Home Purchase | Los Angeles | $925K

    I executed a 30-day close for a client with 90% financing, 3.625% APR and no purchase mortgage insurance (PMI).

    New Home Purchase | West Los Angeles | $4.1M

    Our client closed on a 10-1 interest-only ARM loan, 85% loan-to-value, and no tax returns.

    Economic News Impacting Our Housing Market

    Jobs Report

    The U.S. Bureau of Labor Statistics Employment Summary reported an addition of 431,000 jobs in March, unexpectedly sending the national unemployment rate to 3.6%, which is now in striking distance of the pre-covid low of 3.1%. This is the 12th straight month new jobs have exceeded 400,000, and wages are up 5.6% YOY – all great news.

    In California, the unemployment rate has dropped to 5.4%. With nearly 200,000 jobs added in the first two months of the year, the state has now recovered 87.2% of the jobs lost at the onset of the pandemic.


    The Core Consumer Price Index, which measures inflation in the U.S., released disappointing numbers last month. Inflation accelerated 7.9% YOY, the highest it has been since 1982.

    This month’s report drops on April 12th, and some experts expect the rate to surge as high as 10% due to increases in gasoline prices.

    Despite the higher inflation numbers, oil and other commodities are coming down. I feel we are near the peak in interest rates this cycle – all good news.

    Key Economic Reports to watch for this month:

    April 6 – Federal Open Market Committee (FOMC) Meeting Minutes

    Crude Oil Inventories

    April 7 – Initial Jobless Claims

    April 12 – Core CPI

    April 20  – Existing Homes Sales

    April 26 – New Home Sales

    In closing, I want to share an announcement from the Scotsman Guide, the country’s leading ranking system for mortgage lenders. I have been fortunate to earn a spot on their top mortgage broker list for over a decade and am thrilled to be included again this year.

    Cohen Financial Group 2021 Rankings

     Total Loan Volume

    #1 mortgage broker in Los Angeles

    #5 mortgage broker in the U.S.

    NonQM loan volume

    #1 in the U.S.

    I could never reach this level of performance without my spectacular team and loyal clients like you. I am deeply grateful for your support and trust. Stay positive and remember the volatility will pass.



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