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Posted (edited)
7 hours ago, Gatorubet said:

What is the response from your clients who were holding out for lower rates before they pulled the trigger?  Are they jumping at this or does Hope spring eternal and they’re still sidelining it waiting for better rates?

This is why I structure everything for all bills paid when rates are higher. So they can jump and take the win now and do it again in 6 months. My suggestion is not to hunt bottom until you get into 30’s with a 4 handle. 
Personally I have 37 loans on the books right now for September and expect to add 15 more. That’s after closing 19 in August. 
I expect to be the #1 or 2 volume LO in texas in the broker channel for the month. We shall see. 
My clients response that have worked with me in the past is trust, because we’ve planned this strategy for a year or two with lender paid buy downs, lots of closing cost money from me and other stuff. 
people who get referred to me have a response of “why doesn’t everyone do this?”  Well, bc the typical customer doesn’t understand the business so they ask exactly one question “what’s your rate?” So the vast majority of LO’s become stupid rate monkeys that don’t listen to their customers lives and plan strategy accordingly. 

Edited by Wulaw Horn
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Posted
7 hours ago, Dbeasy said:

Yes. What’s interesting is that the 5 yr bond is down to 3.5%, which is below both of the rate cuts planned for sep and nov. so the bond market believes it’s headed lower, faster than the current consensus rate cut predictions. 

Maybe. Maybe there’s some hedge as well thinking we could see a bit of a surprise 50 point cut. 
I personally think they are still too restrictive by 150-200 basis points but I’m a contrarian by nature, who knows. I follow the macro but trying to time up policy or market moves in the extreme short term is a fools errand. Like trying to time any market be it stock, housing etc. 
I have so many problems with how my industry has been run the last 2.5 years from a  facing the customer perspective that it makes me sort of ragey in a purely autistic kind of way where something doesn’t affect me but it bothers me bc it’s not being done right. 
do you know that when rates where in the 7’s 80% of the market was buying points?  That’s literally fucking insane. Buying points at the height of the market when you are most likely at any time ever to be refinancing shortly into the future?  

it’s like the morons who were putting people on arms during Covid… really?  You want to make it so your rate can get worse than 2.75%?


there’s nothing in this game that’s more important than the break even time. Get that break even below 6 months (0 is better, having money out in your pocket is even better than that) and don’t get greedy and take money off the table (for free) every time rates drop. 

this was actually a fuller answer to gator’s question  

 

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Posted
23 minutes ago, Wulaw Horn said:

But we pretended they were and market priced accordingly. 
it’s awesome that the Fed drives looking through the review rather than the windshield. 

I think most people have felt for awhile that the employment situation seemed worse than the reported numbers. I’ve certainly felt that way for about a year. 

But with that said, you do realize that there are 160 million people employed in the US, right? The unemployment rate is still not high, and these number adjustments are still relatively small on a large denominator. 

We haven’t even begun to see the types of job loss numbers you see in a recession. Those numbers are coming, though, because of the government policies being enacted. The economy is being driven into a ditch as we speak, and it’s not due to Fed policy. It’s a President looking for someone to blame. The BLS numbers have become the latest politicized topic for people to try and bolster their “team”. 

https://www.bls.gov/news.release/empsit.a.htm

Rate cuts are definitely coming now, but too much too fast and the inflation problem that is already a problem (PPI 3%, etc) will become a serious problem. Oh, and the inconsistent tarriff policies, global foreign relations disasters, and other bad policies make it virtually impossible for the Fed to do their job. The problem is this President. Period.   

There is a reason this administration has been begging for rate cuts. They don’t care about inflation, and especially don’t care about the fact inflation is an incredibly regressive tax on the lower income populations. They care only about business growth for their wealthy donors and their own business interests. And there is a real chance he wants a recession so the wealthy can buy up even more of the country’s wealth during it. 

All this to say that the Fed has not been driving thru the rearview mirror, and I don’t think you’ve fully realized who this President is really working for. 

Posted
42 minutes ago, Dbeasy said:

I think most people have felt for awhile that the employment situation seemed worse than the reported numbers. I’ve certainly felt that way for about a year. 

But with that said, you do realize that there are 160 million people employed in the US, right? The unemployment rate is still not high, and these number adjustments are still relatively small on a large denominator. 

We haven’t even begun to see the types of job loss numbers you see in a recession. Those numbers are coming, though, because of the government policies being enacted. The economy is being driven into a ditch as we speak, and it’s not due to Fed policy. It’s a President looking for someone to blame. The BLS numbers have become the latest politicized topic for people to try and bolster their “team”. 

https://www.bls.gov/news.release/empsit.a.htm

Rate cuts are definitely coming now, but too much too fast and the inflation problem that is already a problem (PPI 3%, etc) will become a serious problem. Oh, and the inconsistent tarriff policies, global foreign relations disasters, and other bad policies make it virtually impossible for the Fed to do their job. The problem is this President. Period.   

There is a reason this administration has been begging for rate cuts. They don’t care about inflation, and especially don’t care about the fact inflation is an incredibly regressive tax on the lower income populations. They care only about business growth for their wealthy donors and their own business interests. And there is a real chance he wants a recession so the wealthy can buy up even more of the country’s wealth during it. 

All this to say that the Fed has not been driving thru the rearview mirror, and I don’t think you’ve fully realized who this President is really working for. 

Don’t tell me about “latest politicized issue dude”. I’ve been saying this for 30 months. Consistently. And I’ve been right literally every single time I’ve said it. 
And I was calling for them to raise rates 4 years ago (or at least 3.5).  

Posted (edited)
1 hour ago, Dbeasy said:

 They don’t care about inflation, and especially don’t care about the fact inflation is an incredibly regressive tax on the lower income populations. 

100% agree, but begs the question. The last 4 years saw an average of 4.95% inflation with a peak of 9%, the worst period for the working class since Nixon, was the problem the President as well?

To combat this interest rates were increased and home mortgages went from sub 4 to +7% while home prices were still rising. This effectively shut out 80% of the country from the real estate market for the last 4 years and counting. 

Edited by ChickenSandwich
Posted
36 minutes ago, ChickenSandwich said:

100% agree, but begs the question. The last 4 years saw an average of 4.95% inflation with a peak of 9%, the worst period for the working class since Nixon, was the problem the President as well?

To combat this interest rates were increased and home mortgages went from sub 4 to +7% while home prices were still rising. This effectively shut out 80% of the country from the real estate market for the last 4 years and counting. 

Yes, except I would point out that the initial inflation that was so bad was caused by the trillions of dollars the Trump administration dumped into the economy during Covid, not Biden. It was the most egregious financial move in us history. 

Then Biden, rather than trying to rein it in more aggressively, let spending as a percent of gdp still remain too high. Trump in his second term, is making spending as bad if not worse than Biden.

So we have two Presidents and three Presidencies that have caused these problems. People need to get educated and put a leader in office who is effective, Republican or Democrat , and quit being duped by disinformation.

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Posted
11 hours ago, Dbeasy said:

People need to get educated and put a leader in office who is effective, Republican or Democrat , and quit being duped by disinformation.

Is my sarcasm meter broken or did you really just type this with a straight face?

  • Haha 2
Posted (edited)
16 hours ago, Dbeasy said:

Yes, except I would point out that the initial inflation that was so bad was caused by the trillions of dollars the Trump administration dumped into the economy during Covid, not Biden. It was the most egregious financial move in us history. 

Then Biden, rather than trying to rein it in more aggressively, let spending as a percent of gdp still remain too high. Trump in his second term, is making spending as bad if not worse than Biden.

So we have two Presidents and three Presidencies that have caused these problems. People need to get educated and put a leader in office who is effective, Republican or Democrat , and quit being duped by disinformation.

Agree to disagree on the cause

https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed

 

 May 27, 2021

New YorkCNN Business — 

Larry Summers is urging Washington to tap the brakes on stimulus — or risk unleashing a serious burst of inflation.

In December 2020 the inflation rate was 1.4% with an average of 2.46% the previous 4 years

 

2020

image.thumb.jpeg.c73cbcc3a01b9bdc1ccab8d44e5d3e87.jpeg
 

2025

image.thumb.jpeg.58069b496090c31f1b9f58d44f32155f.jpeg

Edited by ChickenSandwich
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Posted
3 minutes ago, ChickenSandwich said:

Agree to disagree on the cause

https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed

 

 May 27, 2021

New YorkCNN Business — 

Larry Summers is urging Washington to tap the brakes on stimulus — or risk unleashing a serious burst of inflation.

In December 2020 the inflation rate was 1.4%

And the COVID-19 pandemic was still in its early stages with a vaccine months away. Cmon man, stop being so willfully obtuse and ignorant. It's not a good bit.

Posted
2 hours ago, ChickenSandwich said:

Agree to disagree on the cause

https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed

 

 May 27, 2021

New YorkCNN Business — 

Larry Summers is urging Washington to tap the brakes on stimulus — or risk unleashing a serious burst of inflation.

In December 2020 the inflation rate was 1.4% with an average of 2.46% the previous 4 years

 

2020

image.thumb.jpeg.c73cbcc3a01b9bdc1ccab8d44e5d3e87.jpeg
 

2025

image.thumb.jpeg.58069b496090c31f1b9f58d44f32155f.jpeg

You say agree to disagree, but I stated above Biden was also to blame. So that means you believe Trump wasn’t also to blame. So using your own sources, here is the summary from them during Trump’s first Presidency. Why people don’t understand that inflation never shows up immediately, I’ll never understand. It’s completely obvious. 
 

1. Lawrence Summers

  • In 2020, Summers (former Treasury Secretary) cautioned that the Trump tax cuts (2017) plus emergency COVID stimulus created risks of overheating once supply recovered.
  • He later (in 2021) became the loudest critic of excessive stimulus in the Biden era, but his warnings built on the idea that the U.S. had already primed the pump with Trump-era fiscal expansion.

 

2. Olivier Blanchard

(former IMF chief economist)

  • Blanchard warned in 2020 that the scale of COVID stimulus (Trump-signed CARES Act, $2.2 trillion in March 2020) was “larger than necessary” and could lead to inflation once demand rebounded.
  • His point was that fiscal packages were not just relief, but also injected huge demand capacity.

3. Douglas Holtz-Eakin

(former CBO director, conservative economist)

  • Criticized Trump’s 2017 tax cuts and 2020 stimulus for dramatically increasing deficits without long-term growth offsets.
  • He flagged the inflation risk, even if it didn’t show up immediately due to depressed demand in lockdowns.

4. Jason Furman

(former Obama economic adviser, Harvard economist)

  • Supported emergency spending in 2020 but also warned about lagged inflationary risks if fiscal and monetary policy stayed loose as the economy reopened.
  • He noted that the Trump-signed relief checks and expanded unemployment benefits were unusually large compared to past crises.

5. Federal Reserve Voices

  • While Jerome Powell (Fed Chair) emphasized in 2020 that the priority was stabilization, Fed minutes from mid-2020 reflected concerns that the size of fiscal stimulus under Trump could “eventually be inflationary” once bottlenecks cleared.
  • Some regional Fed presidents (like Robert Kaplan of the Dallas Fed) flagged that a surge in government spending would likely push inflation higher in a delayed way.


So like I said earlier, people need to stop blindly following “their team”.  And you are one of the worst offenders of that. You are a smart enough person, like many others, to hold these politicians accountable for their behaviors, but why you don’t, I’ll never understand. When a politician is doing stupid things, it should be pointed out. 

Posted

3.98 coming down the pipe this morning on the CPI data. First time we (fingers crossed) have been below 4.00 since April for 36 hours but more realistically October of last year. 

Posted

Warning - Potentially boring Fed conversation debate post - Actual industry questions at the end that I am really curious about.

So what do you guys think about the bump up in inflation in today's reports as the other side of the Fed's dual mandate coin?  It seems as if a quarter point rate cut is built into most all the market predictions.  But I would love to be a fly on the wall hearing everyone's point of view.  Is this inflation transitory?   Or perhaps more accurately what weight is 3% inflation going forward, with the potential to rise as tariffs trickle through the economy?  

The flip side of the mandate coin is job creation.  And while job creation sucks, unemployment is is a fairly comfortable place overall.  If you are just looking historically.  How bad do individual fed members think the momentum is?  Is it markedly higher than inflation?  Right now it seems that is where the sentiment is, but I would love to know the high and low predictions of individual members of the Fed say 3 and 6 months and a year out right now.  (on both inflation and jobs)

The other odd ball thing that has been added to the rate cut debate is the affect of a potentially shrinking workforce, in relation to job creation and in turn unemployment numbers.  And what weight members give that (if any) in their forward looks?

Right now we are in almost exactly the spot I predicted a year ago.  I said it would be a miracle to see the MMI below 6.25%.  Simply because of what policy implementation of tariffs would entail creation of a lot of conflicting data, making it hard for the Fed to have moved comfortably downward through the Spring and Summer as many hoped for.  Anyhow I just like the debate.  Which side of the dual mandate coin will the data push the Fed the next 6 months? Most likely move is a quarter point, with the conflicting data. Not a jumbo half.  But fuck what do I know. I sort of fear we get the quarter, and then inflation starts to make it's move, stalling/slowing that next quarter point. 

--------------------

The good news for the RE market IMHO?  Is that folks have seen those rates they just had to wait a few more months for, within sight.  So there may be some brisker off season activity than the norm.  Basically off the realization that the just beyond the horizon downward moves in rates back to covid/post covid levels are not a guarantee.  Not to say rates may not indeed continue to drift downward!  Just to say that emotionally folks who have been waiting, probably are feeling pretty good about where rates are right now.  OR do you still think that the mindset of the folks that have been holding off is that waiting for lower is still the prevailing mindset?

One last question - Do you think that lower rates and longer DOM heading into Fall will also create some price capitulation to help buyers along with lower rates?  In other words sort of create a Fall sales graph volume anomaly, to the usual decline heading toward Spring?  

 

Posted

Just gonna snag one piece of your post -- I actually do think we get a rate decrease in a hungry RE market and prices get more fine tuned and RE sees a bump. Especially higher end homes where that .25 lower rate makes a bigger difference. I think lenders then push 1-0/2-1 buydowns and such which sellers will gladly agree to and we have a decent fall season which sellers sorely need 

Posted
1 hour ago, horn4life said:

Do you think that lower rates and longer DOM heading into Fall will also create some price capitulation to help buyers along with lower rates? 

I’ve long held the hope that the typical summer buying cycle might be disrupted if rates fall into attractive territory, but I will share something with the board that’s the benefit of having 40 years of experience either in the industry or growing up under someone in it.

Forget about interest rates, affordability, what the Fed might do, etc.  Nothing compares to employment uncertainty when it comes pulling buyers off the market. 

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Posted

I think there is a lot of pent up demand to trade houses. Feels like any significant movement down in rates could unlock some of that.

 

But what do I know. 

Posted
2 hours ago, tbone_ said:

I think there is a lot of pent up demand to trade houses. Feels like any significant movement down in rates could unlock some of that.

 

But what do I know. 

From your lips to gods ears 

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