the federal funds rate increases this week while there's still really a dismal outlook on the economy here in the United States plus it's also forcing the FED to get more aggressive and have to do it for a longer period of time from what it sounds like let's see how that went ahead and affected the bonds market and the stock market and see how it affected the mortgage interest rates this week right after this foreign welcome back after the break everybody Mike Petrus here your star realtor of star and the Treasure Valley back with another weekly mortgage update for the week of 9 19 through the 23rd so what happened this week well really we do know that the FED met on Thursday and raised the federal funds rate by 0.75 percent and also really kind of said we now have to get aggressive and we have to continue to get more aggressive and maybe even do it for longer so what does that mean as we kind of trickle down and does it mean that the FED is actually going to be able to come in for a soft landing at this point as compared to the effects of the recession generally going to be right around the corner and how does that really relate with mortgage interest rates as we move forward so let's go ahead let's dive into the data let's see what's happened this week and let's go ahead and let's discuss it so what do we know over the last several weeks we definitely know that a lot of the investors out there have really been putting themselves in defense of positions and because of the CPI report that came out last week and all in anticipation of what the Fed was going to do and the overall stance of our economy according to them and of course as we know uh the results are still looking dismal and it still looks like the FED has not been able to accomplish their goal of anywhere near a soft landing and what do they basically say on Thursday they said that they're going to continue to be more aggressive and maybe for longer in order to correct the inflation problem that we have here in the United States so what was generally happening overall is that people were selling and ever since the FED did speak on Thursday they have been selling and selling even more and we can see that in the stock markets we can see that in the bond markets too as well now what really kind of affects say mortgage interest rates of more than the other uh it's not going to be so much the federal funds rate and what they do with that because we know that affects short-term deals more than it does longer term deals like say like the 10-year treasury note or the 10-year treasury bond but regardless is that even though the ffr did go up it still kind of ripples its way down and affects investor confidence overall and we know that when people sell uh their stuff that we know that the mortgage interest rates will go up especially if we're looking at the uniform mortgage-backed Securities or the umbs which is really directly in relation to mortgage interest rates so again when people sell and the value goes down the interest rates you can expect to go up and then vice versa investors come back in and they start buying up you can actually expect the interest rates to come back down and ever since then ever since again the FED speech on Thursday we have noticed that investors have been just kind of jumping out all over the place and selling so that is really the key of what has happened this week with mortgage interest rates is that everybody is on a selling Trend right now and we'll just have to see how this goes ahead and filters out as time goes on so let's start off with the umbs 30 year and we can see that the coupon actually changed to 5.0 because the value actually dumped out of the range of a 4.5 coupon and we can see from this trend boom we have just been going down really since Thursday a lot of the again Vesper confidence got rocked so let's go ahead and let's take a look at what happened over here throughout the course of this week and really we can just see that the umbs has been taking hit after hit and again as we know as the value of these uh the value goes down of the umbs we do know that interest rates go up and we can see starting off on the 19th I lost a quarter point then lost another 0.14 percent or for 14 basis points a little bit of relief on Wednesday but then Jerome Powell spoke and when he spoke bam just down 1.13 so over a full point uh loss in the overall value of the umbs and then today we've lost nine hundreds of a point again increasing the rate so I'll get to where everything kind of stands here in just a second over all of them but the 15 years today also went back into the uh 5.0 coupon over the week and we can see today that it actually went up 0.17 basis points which was good because again we know when the value goes up the the price was like the 15 year is going to go down on the mortgage interest rates but overall for the week you know again just kind of took its hits uh on the 19th we can see it went down 0.27 so a little bit over a quarter uh it went a little bit ticked back up the other direction on Tuesday Wednesday came back down nine hundredths of a point again and then Jerome Powell spoke the FED made their decision with the federal funds rate and we can see that it almost went down a full point and then today a little bit of relief when it comes to the 15 year so let's go ahead and let's see where everything stands right now honestly they have gone way up okay since say last week uh overall if we're looking at a 30-year fix right now we're looking at 6.70 percent uh for your mortgage uh over the day it went up point eight eight hundredths of a percent but over the week we can see it went up 0.35 percent and over the month we're up almost a full point over the year however the 30-year fix has definitely jumped up a lot and we all know that at 3.60 the 15-year fix right now is sitting at six percent basically unchanged on the day but over the week what also went up 0.35 percent and over the month almost again up a full point the 30-year FHA is sitting at 6.25 percent this week up up today by 0.505 percent over the week up a half a point and then over the month up 1.13 the 30-year jumbo today is sitting at 5.95 but basically unchanged for the day but up a quarter percent over the week and up 1.05 on the month the five year five and one arm is sitting at one point or six point one two I wish one point that'd be great 6.12 unchanged for today unchanged on the week but up over the month just shy of a quarter percent and then for the 30-year VA we're sitting at 6.25 up 0.01 or point 100th of a percentage point today up 0.40 on the week and for the month up 1.11 so let's briefly dive into the treasury yield or the treasury yields and we'll go ahead and we'll start off with the 10-year treasury note here uh as we know again the same kind of principle applies that as people come in and start buying up these bonds we can actually see that the yields will go down and today uh the yields are actually sitting at 3.687 uh percent which is actually down a little bit today because people came in and started buying up uh this particular Treasury and which is good because the 10-year treasury yield and the umbs really kind of even though they're separate they do correlate with one another so when the treasury yield uh goes down we can expect mortgage rates actually go down with them uh but when they do when they are on the rise we can actually expect the mortgage interest rates to be on the rise with the 10-year treasury note and if we're taking a look here especially when we hit Thursday there was a big sell-off here in the 10-year treasury yield or the 10-year treasury note which brought down the price which raised up the yield so inversely what did that do to the umbs it also raised up mortgage interest rates to the levels that we're at today uh today though which is kind of good you can see that the price change happened overall if people were coming in buying this up a little bit more maybe because of what's happening in the stock markets overall and that people are just losing in the stocks so what happens when they lose in the stocks they generally run to the bond market which can be good for mortgage interest rates overall but this week everything started taking hits we know that since the beginning of this video had started but good news a little bit for the 10-year treasury note today is that the price went up a bit which brought down those yields and we kind of saw a little bit of that change uh today as it came over into the umbs so let's go over to the two-year treasury yield now the two-year treasury is actually more affected by the federal funds rate increase that happened on Thursday because it's considered more of a short-term deal that is the power that they that the Federal Reserve basically has and we know right now that the two-year treasury note to the 10-year treasury note is inverted and when it's inverted it usually screams out recession so do we see a recession in the effects of recession coming up absolutely I do it's just going to be a matter of time before it does hit and what do we know that happens with mortgage interest rates when a recession does hit we do know that the that the mortgage interest rates historically will come back down because the FED needs to loosen their policy in order to stimulate the economy but but over this week I mean the two-year treasury note uh it has just been kind of losing a lot of people dumping out of it and you can see that the actual treasury uh the yield itself has been on a rapid rise in fact it's at four so if you're it's above four four point two oh three percent if you're looking at today so what are a lot of investors thinking right now do they want to invest in a 10-year Treasurer yield which is only getting them 3.6 or do they want to still invest in the 4.2 of course they're going to want to invest and get a better yield overall so that is what the FED is trying to correct to put us more on a normal slope and get us back to where it's more advantageous to invest in the 10-year treasury yield as it is in a two-year and right now the two year is definitely eclipsing but we can see that the sell-off is still happening here and the price change and we can see that the yields on the two-year treasury note have been on the way up and especially if we're looking back you know on Thursday when uh the Fed chair did speak we can see boom there's a lot of sell-off because usually what happens with bonds too is that when the federal funds rate goes up a lot of people start selling out and what does that do to the yields it raises them up so now just very briefly I just want to go through and show what happened in this stock markets overall this week ever since really Thursday we've seen some really big hits uh Happening Here Again in the stock markets and usually when people do start losing in the stock markets they do generally run to the bond market so that could be a good thing you know for mortgage interest rates overall we'll just have to go ahead and wait and see uh but again people's confidence in the Bond Market stock market umbs Etc their confidence is rocked because they do know that the FED has to get aggressive and they have to do it for longer and then inflation is still an issue so as long as that's going to be the deal we can expect to see hits coming across the Dow Jones NASDAQ bond market s p you name it so we just have to keep watching in tune but this week definitely the FED really rattled that have I made that point really clear over these but over uh this week it basically lost another thousand points just a little over a thousand points at 3.69 percent on the Dow Jones if we're looking at the NASDAQ same Trend NASDAQ went down 470 points down 4.15 percent over the last five days and then lastly for looking at the S P 500 it's gone down 156.68 points which is down four percent so again hits Just Happening all over people are selling off their stuff so we're just gonna have to continue to Monitor and see what happens but in the end interest rates are definitely on the way up they definitely eclipsed what we had last week and I can anticipate them to continue to rise uh until this kind of generally irons itself out and right now I just don't see where it's anywhere near it at the moment but again is it a bad time to buy let's go ahead let's talk about that in my final thoughts well thank you very much everybody for taking the time to watch that video I do hope that you found the information useful but let's go ahead and let's tackle the big giant question that has been looming is this a bad time to buy and really the answer to that question is no and why is that the case because really we are in a buyer's market right now so what does that mean that means for you buyers that are out there there is a lot of inventory to be able to choose from that means that you'll be able to find the home of your dreams with really no fight that's going to come along with it there's also been price reductions happening all over active listings across the Treasure Valley in record numbers Plus on top of that we can probably go ahead and negotiate to be able to maybe even save you some more money but what is also returned to the market is sellers concessions because of the buyer's market so what is a seller's concession that's either giving you money for closing costs or maybe you can go ahead and take that money and buy down your rate with it whatever it is you really decide to do because sellers now are really kind of in the position to where they're offering seller concessions in order to be able to sell their home to you so that's a win-win-win across the board now interest rates yes are they high they definitely are and you're probably going gonna end up feeling that pinch until today if you were to buy or say even a month from now to the point where the effects of a recession hit is the recession here absolutely two negative quarters of GDP unemployment's under four percent inflation's above four percent doesn't look like the FED can get a handle on it either to be able to create the soft Landing that they kept talking about so are the effects of the recession eventually going to hit yes they are and what happens when a recession hits historically that mortgage rates will have to come back down because the FED will be forced to loosen their policies that they have going on so if you you will end up feeling the pain you know when you're talking about you know from the time that you end up buying until the effects of the recession happen and the FED has to loosen their monetary policy and come back down like in their federal funds rate Etc and promote growth in this economy so but between that time you not only did you get the housing of your dreams you got it maybe with a closing cost picked up got it for even cheaper because of the price reductions that are happening in this buyer's market but then you'll be able to go ahead and refinance it for free to practically very little of anything at all so it is a win-win-win situation uh right around the right around the corner we're just gonna have to wait and see how long it's going to be until the effects of the recession actually hit and if I was a betting man I would say sometime after the midterms maybe up until quarter to of 2023. so again we'll just have to wait and see well thanks again everybody very much if you are looking to buy sell or invest in real estate right here in the Treasure Valley feel free to reach out to me today I can be reached at 208 715 star again that's 208 715-7827 and if you're looking to begin your home shopping experience today please visit my website at www.yourstarrealtor.com also if you looking in to move in from out of state right here to the Treasure Valley please click in the description below download my free relocation guide so that way you're in the know before you decide to make the move also please hit that subscribe button below hit the notification Bell and comment please I'd love to hear what your thoughts are on the state of our economy and what you think is going to happen in the real estate market say right here in the Treasure Valley or even across the U.S I'm also going to go ahead and post a couple of videos to Mikey's monthly Market updates which covers what's happening right here in Ada and Canyon counties over the last month which was August so if you'd like to be in tune with what happened in the real estate market right here in the Treasure Valley please watch that video and also if you'd like a more in-depth analysis I'll also include at the end of this video the feds meeting that happened on Thursday so that you can get a full breakdown of what to expect from here so thank you again very much everybody I look forward to the day we speak I look forward to the day I call you my neighbor God bless until then thank you so much bye
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