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    Interest Rates Down Last Week on Fed News

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

    Interest Rates

    Last week, the market anxiously awaited the outcome of Tuesday’s Federal Reserve Meeting. Ironically, nothing in the meeting notes was unexpected, and rates dropped slightly after the news. I believe baring any unforeseen change in the economy or the pandemic; interest rates will remain aggressively flat for the remainder of 2021.

    In case you missed the latest news from the Federal Reserve – they will begin tapering the Fed bond purchasing program later this month and leave interest rates at near zero for the time being due in part to inflation concerns.

    Local Trends

    I mentioned in previous newsletters that there is an unprecedented number of mortgage loan products available for consumers to choose from. Here are a few examples of deals we have put together in the last thirty days that would not have been possible last year.

    New Home Purchase

    Closed a $7M purchase loan, 100 % cross-collateralized with another property, the borrower did not put any cash in the deal.


    Secured a $3.6M second mortgage with a two-week closing on a property with an $8M first mortgage. The appraisal on the property was $16M.

    Economic News Impacting Our Housing Market

    Jobs Report

    The U.S. Bureau of Labor Statistics Employment Summary reported the addition of 531,000 jobs in October, sending the unemployment rate down .2 percentage points to 4.6%. California is not due to report October employment numbers until later this month, but the state employment rate has been stalled at 7.5% since August.

    While the national numbers are robust, many employment sectors are suffering from a lack of labor supply, putting a bigger crunch on already clogged supply chains, pushing consumer prices higher. The persisting question many economists are talking about now is a wage-price spiral, a condition our economy hasn’t experienced for decades. The New York Times published an excellent article on the topic this week.

    How does this affect the housing market? A tight labor pool increases the price of raw materials, cost to build or renovate, which, in turn, contributes to the run-up of home prices.

    Key economic data to watch for this month:

    November 10 – U.S. Jobs Report and Core Consumer Price Index (CPI)

    November 12 – Job Openings and Labor Turnover (JOLTS) report

    November 16 – Core Retail Sales Report

    November 17 – Building Permits and Housing Starts Reports

    November 19 – California Unemployment Data

    November 22 – Existing Homes Sales Report

    November 23 – Q3 GDP report

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