Dallas-Fort Worth Real Estate Investor Club

Interest rates have risen for five straight days as investors pull back from long-term U.S. Treasuries as strong economic data and sticky inflation have led investors to scale back expectations for Fed rate cuts this year. The labor market remains resilient—JOLTS came in at 7.7M vs. 7.3M expected, nonfarm payrolls hit 147k vs. 106k, and unemployment dropped to 4.1% vs. 4.3%. Initial jobless claims are down, and ISM Services and New Orders both beat forecasts.

Inflation is still running hot as well, with Core PCE at 2.7% vs. the Fed’s 2.0% target. As a result, markets now expect no cut in July and only a possible move in September. Long-end yields are rising globally, with the 30-year U.S. Treasury nearing 5%, driven by heavy supply, reduced demand, and broader fiscal and geopolitical uncertainty.

While the long end of the curve continues to get beat up, the steepening yield curve continues to provide options for affordable financing. Last month, Rate originated ~$700M of adjustable-rate mortgages and we're releasing more ARM options to try to help with lower payments.  Marry the house...date the rate!

https://apnews.com/article/real-estate-investors-home-sales-affordability-housing-7aa2bc78c87bfb1f292fe4321fe658cb?utm_source=copy&utm_medium=share

How about a 40 year, Interest Only mortgage?  Actually, any time a bank/lender starts bragging about an "untraditional" product, please be careful.  I know you already have knowledge about these things Robin but the average person may not know that lenders make a TON of money on these products. So, yes, we did write a lot of ARMs recently and are releasing more ARM products but in my consultations with people we do go over the comparisons so that everyone can see the real math and be on an even playing field. Remember that your mortgage is so frontloaded with interest that a 40 year, interest only mortgage may not save as much as you think.  But you'll still be owing that full mortgage balance to the lender after making 10 years of payments - as if banks didn't make enough money already.  

Hope all of that makes sense.