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    July Might be the Best Month Ever for Home Financing

    June ended on a very positive economic note, and thus far, July seems to be following suit. U.S. Airline carriers were expecting a 164% increase in travel last weekend, and AAA predicts that nearly 50 million people traveled over the holiday despite lingering Covid concerns and high gasoline prices.

    In other news, Wednesday’s Fed meeting notes sent financial markets to a new high, but global economic concerns have created a roller-coaster stock market this week.

    As we move through the month, here are the trends I am watching.

    I’ve seen very few moments better than this to secure a mortgage loan.

    The lender market is awash in cash, creating a perfect storm for borrowers seeking historically low rates and favorable term options like cash-out at close and no PMI (purchasers mortgage insurance).

    Here are a few examples:

    New Purchase Loans (Owner Occupied)
    90% of the purchase price up to $2,000,000
    85% to $3,000,000
    75% to $5,000,000
    70% to $7,000,000
    60% to $10,000,000

    New Purchase Loans (investor, non-owner occupied)
    85% of the purchase price up to $2,000,000
    80% to $3,000,000
    70% to $5,000,000

    A few other loan opportunities worth noting this month:
    30 YR fixed – 2.98%
    10-1 ARM – 2.78%
    15-1 ARM, – 2.78% (financing to 80% of the purchase price up to $4,000,000)

    Unemployment will factor into rate hikes.

    Job growth is strong, adding 850,000 new positions in June, but the economy remains 6.8 million short of the number of jobs it had in February 2020. In the future, many economists feel it is a matter of time before hiring catches up with solid labor demand. Lydia Boussour, senior U.S. economist at Oxford economics, foresees job growth exceeding 1 million a month over the summer. “Let the employment fireworks begin,” she stated in a recent report. A full job recovery will undoubtedly play into future Fed policy decisions.

    August Fed Meeting may signal change.

    Fed chairman Jerome Powell commented on Wed, “We are now thinking about, thinking about rates,” which, for me, is a sign we may see movement next month. Typically, we get an inkling of where the Fed is going on monetary policy at the August Economic Symposium in Jackson Hole, Wyoming. The meeting is worth mentioning now because if they signal a move in rates, July may be the moment to move on a loan if you want to time the bottom.

    Key economic data to watch for this month:

    July 13 – Federal Budget

    July 14 – The Beige Book report (Federal Reserve Banks)

    July 15 – June Building Permits

    July 22 – Existing Home Sales

    July 28 – Fed Interest Rate Decision

    I hope you take time from your schedule this month to enjoy the beautiful summer weather and revisit the activities we missed last year. If you are thinking about jumping into the housing market for a refinance or home purchase in California, please contact me to discuss your options.