Market Update: How Global Trends and Lower Rates Impact Your Home Plans

Check Interest Rates at www.SimRates.com

Recent headlines have highlighted issues such as bond sell-offs in Japan and discussions about "Selling America" at the World Economic Forum.

As your mortgage partner, my role is to focus on what directly impacts your finances. Here is why this week is important for both buyers and current homeowners.

The Numbers: Rates Are Moving in Your Favor

According to the Mortgage Bankers Association (MBA), mortgage rates are declining and placing them 62 basis points lower than this time last year. This change significantly increases your purchasing power.

For Buyers: Purchase applications increased 5% last week and are up 18% year-over-year. More buyers are returning to the market as monthly payments become more manageable.

For Homeowners: If you purchased when rates were near 7% or 8%, note that refinances have increased 183% compared to last year and now account for 62% of all mortgage activity. If you have not reviewed your rate recently, you may be missing potential savings.

The Global View: Why Japan and Davos Matter

You may wonder why a "bond sell-off" in Japan or comments from U.S. Treasury Secretary Scott Bessent could impact your home loan in the United States.

The mortgage market is closely linked to the bond market. When investors become concerned, as seen with Japan's rising yields, they shift funds globally. However, Secretary Bessent stated this week that foreign investment in U.S. Treasuries remains at record levels.

In summary, despite global uncertainty, the U.S. housing and bond markets remain stable. This stability helps prevent unexpected increases in domestic mortgage rates.

Looking Ahead: The "Fed's Favorite" Report

Tomorrow is a big day. We are expecting the delayed PCE (Personal Consumption Expenditures) report. This is the Federal Reserve's preferred way to measure inflation.

The Forecast: Analysts expect inflation to ease to 2.7%, down from 2.8%.

If the data confirms that inflation is cooling, markets are likely to respond positively. This typically results in further downward pressure on mortgage rates.

Recommended Next Steps

Buyers: With increased inventory and declining rates, now is an ideal time to update your pre-approval. A 1% rate difference can save you hundreds each month.

Homeowners: If your current rate starts with a "7" or an “8”, consider reviewing your options. With the current refinance surge, this may be an opportune time to act.

Meet the Broker:

Freddy Kling, Simplicity Mortgage

Simplicity Mortgage is a one stop mortgage shop in Port Orange, Florida, where I make homeownership dreams come true all over the State of Florida. Our extensive portfolio and simplified loan process allows us to close loans quickly and successfully, while providing each client an exceptional customer experience.

I come from a family of entrepreneurs and have always understood the value of integrity, challenging work, and dedication. It is extremely important to me that clients and referral partners appreciate that I am available and responsive around the clock.

I have been a resident of Florida for over 50 years and graduated from Embry Riddle Aeronautical University with a bachelor's degree, majoring in computer science and a minor in mathematics. Before the mortgage industry, I was a Senior Principal Program Manager for the world’s fourth largest software company.

Call me today to discuss your real estate goals!

386-401-9000