Looking solely at the end of day trading levels in the bond market, we could conclude that we are once again deprived of any meaningful motivations for momentum. That’s partially true in the sense that today’s events were not “top tier.” Nonetheless, we can still make a case for some relevance. After all, bonds were definitely stronger ahead of this morning’s data. The initial weakness could be coincidental, but the 9:45am reaction to the PMI data was fairly clear in terms of volume and volatility. That’s interesting considering it was mostly in line with forecasts. Some analysts suggested the focus was on the “confidence” metric at a 22 month high in the services sector and that’s a fair take if we’re trying to justify the reaction. In the bigger picture, we’re waiting on next Friday’s PCE data (more like waiting on Monday since the bond market is closed next Friday).
Philly Fed Index
3.2 vs -2.3 f’cast, 5.2 prev
Philly Fed Prices
3.7 vs 16.6 prev
Jobless Claims
210k vs 215k f’cast, 212k prev
Continued Claims
1807k vs 1803k prev
S&P Services PMI
51.7 vs 52.0 f’cast, 52.3 prev
S&P Manufacturing PMI
52.5 vs 51.7 f’cast, 52.2 prev
Existing Home Sales
4.38m vs 3.94m f’cast, 4.0m prev
08:41 AM
After econ data, 10yr up to 4.247 (still down 3 bps on the day). MBS still up 5 ticks (.16) on the day.
09:58 AM
MBS are now down 2 ticks (.06) on the day and 10yr yields are unchanged at 4.277.
01:40 PM
Flat since 10am. MBS unchanged and 10yr half a bp higher at 4.281
03:45 PM
Still flat near unchanged levels. MBS up 1 tick (.03) and 10yr unchanged at 4.277.
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Mandatory Execution, Accounting, Warehouse, TPO Products; STRATMOR on Comp; Upcoming Events and Training
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Mandatory Execution, Accounting, Warehouse, TPO Products; STRATMOR on Comp; Upcoming Events and Training
By: Rob Chrisman
1 Hour, 35 Min ago
“90 percent of bald people still own a comb; they just can’t part with it.” Many companies that retained servicing in 2020 and 2021, complete with low interest rates and borrowers with large amounts of equity & abilities to repay, have made the decision to part with that servicing. Packages of servicing rights continue to hit the market. In a free market, for every seller there’s a buyer for these packages. And in a free market, where most loans from different lenders are often put into the same securities or at least sold at roughly the same price in the secondary markets with approximately the same servicing value, companies that manufacture those loans at the lowest cost stand a better chance of surviving than those that don’t. Turning to borrowers, consumer costs are certainly in the news, especially with any implications from the proposed NAR lawsuit settlement, specifically if the agreement leads to borrowers paying for their real estate commission when they previously did not. (Readers should know that the CFPB does not regulate real estate agents, and the TRID forms already allow disclosure of the fee to be disclosed on either the buyer’s or seller’s side.) Found here, this week’s podcast is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Today’s has an interview with attorney Marty Green on the implications of the recent NAR settlement.)
Lender and Broker Services, Products, and Software
“Discover the power of partnership with Planet Home Lending Correspondent. Our continually refined product lineup spans vanilla to niche products all tailored to your unique needs: Best effort, mandatory AOT, delegated, or non-delegated. Connect with Planet at the Great River Conference in Memphis, TN, April 16-18. To schedule your meeting, reach out to Regional Sales Managers Joe Griffin 859-806-3323 and Gary Strohwig 262-224-4435, or Renovation Account Executive Margie Walsh 732-673-6228. Not going to Great River this year? Click here to download the latest version of our Product Highlights, then put Planet to work for you in 2024.”
PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), understands the importance of efficiency when it comes to meeting mortgage lenders funding requests. “Express Funding” is how we help our customers reduce the time needed to get loans funded quickly. Express Funding allows our customers to submit multiple loans for funding in one simple data upload, whether it is one loan or 100 loans. We have a growing list of 5,000+ approved closing agents, No Doc funding requirements and funding turn times averaging under 20 minutes! As a well-capitalized financially strong banking partner we give our customers confidence in an uncertain market. If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett, (469)955-6786.
Make your general ledger profitable and run your business more efficiently with Loan Vision and LV-PAM. Instead of “staying alive until ‘25”, with Loan Vision, a software built BY the mortgage industry FOR the mortgage industry, you can “produce more in 24!” Customers on Loan Vision see improvements of 30 percent+ decrease in days to close the books, 20 percent+ reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility. Interested in learning how Loan Vision can help you run a more efficient and profitable company? Contact Carl Wooloff to schedule a call today.
For independent mortgage banks coping with shrinking production volumes and rising costs per loan, outsourcing accounting is an elegant solution to what’s become a very common challenge. Whether you have no accounting expertise in-house or you have a new team with no mortgage experience, you can tap the Richey May Client Accounting and Advisory Services (CAAS) team for the support you need. This team is stacked with mortgage industry experts who can tailor your solution to meet your most pressing needs in a volatile time, with no training needed. Need help transitioning to loan level accounting? Need a fully outsourced function? You got it! Need industry training for your controller? We can do that. In this article, Richey May’s expert Kim Dittmer answers all your most frequently asked questions around outsourced accounting as a mortgage bank.
STRATMOR Comp Survey
Lenders, how have rising rates and shrinking margins impacted your 2024 compensation plans? STRATMOR Group’s Spring 2024 Compensation Connection® Study provides valuable comparisons on compensation components, incentive plan structure, compensation percentiles, and more. Three-year trailing data is also included with most data points. Find out how you compare to your peers by participating. Results will only be available to participants, so register today! Questions? Email [email protected].
Webinars, Events, and Training into April
(A good place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future.)
How lenders can save money: Most lenders are painfully aware of rising loan origination costs, which is a common trend in a down market. Yet some lenders are fighting back… Like Lower, which has found a way to save as much as 80 percent on these operational line items and win more loans. Sign up for this exclusive webinar taking place today at 11AM PT, featuring James Duncan and Donielle Geiser (Lower), and Richard Grieser (Truv), and yours truly where they’ll share their take on today’s market and how they’ve reduced costs on operational line items previously thought to be beyond a lender’s control.
Texas Mortgage Bankers Association monthly education webinar: “Guardians of Security.” Join Texas Mortgage Bankers Association for an insightful presentation on navigating cyber risks in the mortgage lending marketplace, Guardians of Security – Navigating Cyber Risks in the Mortgage Industry, today, 11:30 am – 12:30 pm.
Tomorrow, March 22, is this week’s episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Tomorrow’s will be co-hosted by TMC CEO David Kittle.
Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Next week, watch MBA President Bob Broeksmit discuss the industry!
FHA Servicing Quality Assurance Update, Virtual Webinar on March 27, 2– 3:30 PM (Eastern) will provide FHA quality assurance results for calendar year 2023 focusing on top findings from loan-level servicing and lender-level operational reviews. The webinar concludes with a live question and answer session.
On Thursday, March 28th from 2:00-3:00 PM, join CoAMP and Michael Flynn, Of Counsel, w/Buchalter for an informative session moving forward in the current mortgage market could look like, including: What are the areas of increased regulatory activity and likely new rules? The impact on brokers of likely foreclosure increases (increased attacks on whether loans meet the ATR and QM requirements. And increased repurchase and indemnity demands from lenders to brokers). The cost is $10 for CoAMP Member and Member Guests/$25 for Future Members (which can be credited towards an annual CoAMP membership). A virtual link will be sent prior to the event.
Want to hear how top producers are thriving in today’s market? Don’t miss the Modern Mortgage Summit on March 28th, hosted by industry leaders Dave Savage and Todd Bookspan. Tune in virtually to hear from 12+ of the nation’s top mortgage professionals, including Jeremy Forcier, Shayla Gifford, and Dan Keller, as they share their best strategies for success in a TED-talk style format. Virtual tickets are only $100, and a portion of your ticket purchase supports the financial literacy nonprofit, FirstHome IQ. Secure your ticket today at modernmortgagesummit.com.
During a virtual press conference on March 28, ABA Economic Advisory Committee Chair Simona Mocuta, managing director and chief economist at State Street Global Advisors, will present the latest consensus economic forecast from this panel of top economists at some of North America’s largest banks. The Committee’s updated outlook comes as inflation gradually abates, economic uncertainty persists, and the Federal Reserve considers a less restrictive policy. The committee’s forecast will include the group’s latest assessment of GDP growth, unemployment, inflation, interest rates and credit conditions. RSVP required: Please contact Ava Castelli to RSVP and receive login/dial-in information.
FHA is offering In-Person, Free Underwriting Training in Denver, CO., April 10, 9:00 AM – 12:00 PM MST. Training will provide an overview of FHA underwriting procedures as outlined in FHA’s Single Family Housing Policy Handbook 4000.1 and addresses several industry-related frequently asked questions (FAQs). This training will also take an in-depth look at a variety of topics including credit, income, and asset (CIA) documentation; manual underwriting; automated underwriting systems (AUS); closing; and more.
FHA is offering In-Person, Free FHA Appraisal Training in Denver, CO., April 10, 1– 4 PM MST. Training will provide an overview of FHA appraisal protocol and updates to FHA appraisal policy as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training will also take an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements; and more.
Join the MBA of NJ, in partnership with HUD for the 2024 HUD Housing Counseling Session, April 11th, 2:00PM – 4:00PM at the Federal Reserve Bank of NY., Keys to Homeownership: Building Strategic Partnerships.
Acquire a greater perspective from industry experts at American Mortgage Conference from April 15 – 17. Held in a new location this year at the Marriott Savannah Riverfront in Georgia. Co-hosted by ABA and the North Carolina Bankers Association, this premier conference is the only mortgage event that blends business and regulation to assure you are fully up to date and fully connected to crucial professional networks.
AmeriCatalyst explores the operational impact of climate change and its profound industry-wide implications for the US housing and finance market. The event brings together senior representatives and CEOs from government entities including the White House, The Fed, Treasury and the FDIC; government housing entities; insurance companies; institutional investors; investment banks; banks; mortgage originators and servicers; homebuilders; Single Family Rental Operators and REITs; the leading data providers; economists; academic institutions; climate tech providers and world renowned climatologists. The purpose of the event is to recognize, prioritize, mobilize, and prepare for an increasingly volatile, unpredictable, and potentially uninsurable future due to extreme and catastrophic weather-related events due to climate change. AmeriCatalyst’s GOING TO EXTREMES: The Climate, Housing and Finance Summit is being held at the Gaylord National Harbor (in the Washington DC area) on April 18 and 19. Contact Toni Moss (512-461-6340) with questions.
Capital Markets
AC/DC released its masterpiece, “Back in Black,” 44 years ago. The album was a rebirth after its original lead singer’s death. After challenging times, mortgage lenders seek to get back in the black on their income statements. One solution is moving back to mandatory delivery, and Optimal Blue can help you do it. For nearly 20 years, Optimal Blue has advised and guided originators to transition from best efforts to mandatory successfully. With recent data showing the best efforts to mandatory premium above 40 basis points (bps) for conventional 30-year loans, the return on investment provides a clear path to a return to the black. Whether you are approaching or expecting a volume boost or looking to put fewer agency-eligible loans on your balance sheet, now is the time to learn how Optimal Blue can help. To learn more, connect with Mark Teteris, CMB, Optimal Blue’s director of solutions specialists.
Interested in learning more about moving from best efforts to mandatory loan sales? Maybe you’ve already moved to mandatory and are looking for even more pickup and ways to mitigate risk? Join MCT’s Moving to Mandatory Loan Sales webinar on April 4th at 11am PT to learn how mandatory loan sales is helping lenders improve profitability while reducing risk. In this webinar, MCT’s Scott Holtz, Vice President of South Regional Sales, will discuss how to leverage mandatory loan sales to improve profitability, manage risk with pipeline hedging, and operational changes needed for the transition. Register for the webinar or join MCT’s newsletter to receive the latest educational content.
In interest rate news, as was widely expected, the Fed held the federal funds target steady at a range of 5.25 percent to 5.50 percent yesterday, extending the pause on rate changes that followed their most recent hike last July. This decision was unanimous as the Fed believes that employment and inflation goals are moving into better balance. However, the committee also repeated from their prior statement made January 31st, that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
Meanwhile, the latest summary of economic projections showed no change in the Fed’s median fed funds rate projection for this year (4.6 percent) while the forecast for 2025 was raised to 3.9 percent from 3.6 percent. The Core PCE forecast for 2024 was raised to slightly while the GDP growth forecast increased slightly as well from the last estimate in December. During his press conference, Fed Chairman Powell said that it will be appropriate to slow the pace of asset runoff fairly soon. Rate cut expectations increased by yesterday’s close with the implied likelihood of a June cut rising to 74 percent from 59 percent on Tuesday.
Following yesterday’s Fed events, today brings the latest decisions from the Swiss National Bank, Norges Banks, and Bank of England. The U.S. calendar has already kicked off with the Q4 current account deficit, weekly jobless claims (210k, down slightly; continuing claims 1.807 million), and Philadelphia Fed manufacturing (3.2, down but not negative).
Later today brings S&P Global flash PMIs for March, existing home sales for February, leading indicators, Treasury announcing the auction sizes for next week’s month-end supply auctions before auctioning off $16 billion reopened 10-year TIPS, Freddie Mac’s Primary Mortgage Market Survey, and remarks from Fed Vice Chair for Supervision Barr. We begin the day with Agency MBS prices a tough better than Wednesday, the 10-year yielding 4.24 after closing yesterday at 4.27, and the 2-year yield down to 4.58.
Jobs
“It’s 1999: Californication and Slim Shady dominate the charts, the iconic films Fight Club and The Matrix are released, Serena Williams wins her first Grand Slam to kick off an outrageous career and with inspiring greatness being born all around Seth Fass founds East Coast Capital. Celebrating its 25th anniversary, East Coast Capital has scored incredible victories for clients to achieve their homeownership goals. Once a small broker, NY-Based East Coast Capital is now a licensed bank across the nation, approved with Fannie, Freddie, and FHA and also specializes in underwriting Non-QM loans. Committed to providing homeowners access to capital and supporting loan officers with a diverse range of products and common-sense approach to underwriting, the movies and songs may have fallen off the playlist and Serena has retired from the courts, but born among the best, East Coast Capital still remains! Ready to Join? Email us here.”
Congratulations to John Hedlund, the Chief Operating Officer and Managing Director of AmeriHome, who has announced his retirement from the company.
Calling all applicants for Flagstar’s MortgageTech Accelerator, a highly acclaimed incubator for young fintech companies with fresh solutions for the mortgage sector, now in its fifth edition. Flagstar is looking for applicants who are making breakthroughs in all facets of the mortgage business including origination, processing, marketing, servicing, compliance, sales, underwriting, credit, and quality assessment. The program comes packed with perks like access to Flagstar senior executive mentors and a wide network of potential customers, as well as the opportunity to test solutions in a real-world controlled environment. Ranking high among the selection criteria are the potential for technological innovation, prospects for growth, and CRA impact. Past alums Greenline, Calque Inc., and Housetable, give the program a resounding thumbs-up. Check it all out here and email your pitch deck to [email protected] by April 15.
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Average mortgage rates edged higher yesterday. Unfortunately, it was the sixth consecutive business day on which they’ve risen.
Earlier this morning, markets were signaling that mortgage rates today might barely move. However, these early mini-trends frequently alter speed or direction as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.15%
7.17%
Unchanged
Conventional 15-year fixed
6.57%
6.61%
-0.04
Conventional 20-year fixed
7.16%
7.19%
+0.02
Conventional 10-year fixed
6.63%
6.66%
-0.05
30-year fixed FHA
6.51%
7.19%
Unchanged
30-year fixed VA
6.61%
6.72%
-0.03
5/1 ARM Conventional
6.3%
7.39%
Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Tomorrow’s Federal Reserve events (see below) could make a big difference to mortgage rates in the near and medium terms. But, right now, I’m pessimistic about our seeing a sustained downward trend until the summer. And some wonder if the fall might be a more realistic timeframe.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes held steady again at 4.32%. (Neutral for mortgage rates. However, yields were rising this morning.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were mixed this morning. (Neutral for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $83.18 from $81.35 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices inched down to $2,156 from $2,159 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — dropped to 69 from 75 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hold close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Tomorrow
I covered yesterday the three Federal Reserve events due early tomorrow afternoon:
2 p.m. Eastern — Rate announcement and report publications
2 p.m. Eastern — Summary of Economic Projects publication. This occurs only quarterly and includes a dot plot
I’ll brief you more fully on those tomorrow morning. That way you’ll know what to look out for before it’s too late to act.
Personally, I’m not very hopeful about the impact of the Fed’s events on mortgage rates. Of course, I can’t be sure what they’ll bring. But recent economic data has likely reinforced the central bank’s natural caution. And I suspect that it may signal later and fewer cuts in general interest rates this year than markets have been expecting.
If I’m right, that could be seriously bad for mortgage rates. So, let’s hope I’m wrong.
Today and later in the week
I’ll be surprised if today’s economic reports move mortgage rates much. They cover February’s housing starts and building permits. It’s not that those data are unimportant. However, they rarely attract the attention of the investors who largely determine mortgage rates.
We have to wait until Thursday for a couple of reports that sometimes affect mortgage rates. They’re two March purchasing managers’ indexes (PMIs) from S&P. One is for the services sector and the other covers manufacturing. I’ll brief you on those tomorrow morning.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Mar. 14 report put that same weekly average at 6.74% down from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Feb. 12 and the MBA’s on Feb. 20.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.5%
6.3%
6.1%
5.9%
MBA
6.9%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Average mortgage rates climbed moderately last Friday. Indeed, they rose on every business day last week. However, that followed a week of mainly falls. And those rates begin this morning close to where they were at the start of March.
First thing, it was looking as if mortgage rates today barely move. But that could change later in the day.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.12%
7.13%
+0.02
Conventional 15-year fixed
6.62%
6.65%
+0.03
Conventional 20-year fixed
7.15%
7.17%
+0.04
Conventional 10-year fixed
6.64%
6.66%
Unchanged
30-year fixed FHA
6.49%
7.17%
+0.01
30-year fixed VA
6.61%
6.72%
+0.02
5/1 ARM Conventional
6.28%
7.38%
Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
I doubt we’ll see mortgage rates enter a consistent downward trend much before the summer, and possibly later.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes held steady at 4.32%. (Neutral for mortgage rates. However, yields were rising this morning.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were rising this morning. (Bad for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $81.35 from $80.62 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices inched down to $2,159 from $2,162 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — nudged up to 75 from 71 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hold close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
The Fed
The Federal Reserve’s rate-setting body (the Federal Open Market Committee or FOMC) begins a two-day meeting tomorrow. And a flurry of events is scheduled for the following afternoon.
Almost nobody expects an announcement of a cut in general interest rates on Wednesday. But events that afternoon include:
2 p.m. Eastern — Rate announcement and report publications
2 p.m. Eastern — Summary of Economic Projects publication. This occurs only quarterly and includes a dot plot
These FOMC documents and the news conference may provide new insights into how the Fed’s thinking on future cuts to general interest rates is evolving. So, markets globally will be paying the closest attention to every word written and uttered.
And there is huge potential for Wednesday’s Fed events to move mortgage rates.
I covered this in last Saturday’s weekend edition. And I’ll brief you in more detail again on Wednesday morning so you’ll know what to look out for.
Other influences on mortgage rates this week
Most of the economic reports on this week’s calendar are unlikely to affect mortgage rates. It’s not impossible. But they cover areas of the economy that rarely interest the bond investors who largely determine those rates.
Today’s lone report is a good example. It’s the home builder confidence index for February, which came in as expected. I don’t recall the last time that had a perceptible influence on mortgage rates. And the same goes for tomorrow’s housing starts and building permits, also for February.
The two reports that might move mortgage rates this week are both March purchasing managers’ indexes (PMIs) from S&P. One covers the services sector and the other manufacturing.
They’re both expected to show purchasing activity slowing modestly. But I’ll brief you more fully on what to expect on Wednesday.
Friday has no scheduled economic reports. However, three Fed speakers, including Chair Jerome Powell, have speaking engagements that day. Those could be an opportunity to reinforce messages communicated on Wednesday and to correct any misunderstandings. So, they could have an impact on mortgage rates.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Mar. 14 report put that same weekly average at 6.74% down from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Feb. 12 and the MBA’s on Feb. 20.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.5%
6.3%
6.1%
5.9%
MBA
6.9%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
A lot has been written about whether now is the best time to buy stocks.
Many think that it is a good idea, and others are still skeptical. So which one should you believe?
This article will help answer the question once and for all with facts rather than opinions.
But first, let’s look at some statistics:
S&P 500 Total Returns for 2021 was 28.71% (source)
In the past 20 years (2003-2021), the S&P 500 was down three times. (source)
Over the 10 year period of 2011-2020, the S&P 500 averaged 13.9% (source)
With that said, will it be best to invest now?
Honestly, that is an answer no one can give you. And the movies about Wall Street won’t help you either.
However, you can learn to read charts become a technical analysis trader, and have a better idea of where the market is going.
The stock market is a volatile thing. It can go up or down at any time. As the statistics show, it goes up more often than down.
Is it Smart to Invest in Stocks?
The stock market is a great way to make money whether for income or for long-term investments. Plus it is a lot more accessible than you think.
With stocks on an upswing lately, it might be tempting to dive in. But do not get too excited just yet!
You must learn how to invest in stocks.
Are you ready to make money in the stock market? If so, learn the steps to start investing today.
In order to make educated decisions, it is crucial that you understand what makes stocks go up or down.
Since you might be asking yourself whether it is a good time to buy stocks after the market has been on such an upswing for several months. The answer is yes, but there are some important factors you should consider before handing over your money.
This article will discuss how the stock market works and provide you with reasons why now may not be a great time to invest in stocks as well as alternatives that could make sense for you if this is indeed a bad time to purchase them.
Read more!
What is the Stock Market?
The stock market is a system of securities, such as stocks and bonds, in which investors buy and sell ownership stakes to each other on various exchanges using money or their own businesses.
Simply put, the stock market is a place where people invest money.
There are many different ways to invest in the stock market, but one of the most popular ways is through buying stocks.
Investing in stocks is a commonly used way to make money.
In the stock market, people can buy and sell shares of companies they believe will rise in value. You can participate by investing in the stock market by buying individual shares of a company like AMZN (Amazon), investing in an ETF like VTI, or investing with a mutual fund, such as VTSAX.
One former assistant principal, Teri Ijeoma, changed her life when she left her job as an educator and become an active trader.
What does it mean when the stock market is up or down
When the stock market is up, it means that stocks have been doing well.
Conversely, when the stock market is down, it means that stocks are losing value.
You have heard the saying… buy low, sell high.
Stocks are an investment that you can purchase in order to make a profit, but the best time to buy stocks is when they are at their lowest price.
If you bought a stock for $100 and its value increased by 10%, then your stock would be worth $110. However, if you bought 20 stocks at $100 and the value increased by 10%, then your new value is $2,200. If you are trading options, then your return (and risk) is much greater.
When the market is up or down there are always going to be opportunities to make money from the stock market!
The hardest part for the novice investor is to determine when to buy and sell.
Thankfully, there is a great investing course to help you figure out how to invest in stocks and options.
Timing the Stock Market
Can you even time the stock market?
Many people are concerned with timing the stock market because of its volatility. Honestly, no one knows what the stock market will do.
As a technical stock trader, you will learn based on previous actions how the market and individual stocks may react.
When day traders or swing traders “time” the market, they are using time frames to make their predictions. Those traders who manage their risk and potential losses well will do better in the market.
For the average investor or someone going off a friend or Reddit recommendation, timing the market can be detrimental to your portfolio.
The real answer to the question, “Is now a good time to buy stocks?” is that there’s no such thing as an ideal moment. It could be a great time or it could also be terrible timing. There are too many variables and market risks which makes this decision very difficult for investors.
Too many times, investors fall into the trap of panic selling while stock prices are low and buying when stocks are high on the fear of missing out (FOMO).
That is why the common knowledge states don’t time the market.
However, I can tell you that you can time the market. If (and it is a big if) you are willing to put the time and effort into an investing education as you would going to college.
Many people have found success in timing the market.
Why investing is always a good idea
Remember earlier in this post, we stated the stock market has averaged 13.9% over the past 10 years and only had 3 negative years in the past twenty.
Simply put, that means you can make money, and investing is a good idea.
That is better than the flip side of your money sitting in the back earning slightly above 0% and when you account for inflation, your money is worthless.
The stock market is (almost) always following an upwards trajectory.
This means investors are more likely to experience gains in their investments than they would if the prices were going down. Moreover, it’s almost never a good idea to just let your money sit doing nothing for years on end because inflation will eventually force you into losing value at some point.
Instead of waiting until then and hoping for the best, focus on what you want instead of what the market is doing at any specific moment.
Must Read: How To Invest In Stocks For Beginners: Investing Made Easy
Is now a good time to invest?
This is the wrong question. The better question to ask would be “What is a good time to invest?”
It is not always a good time to invest. Before buying stocks, it is important that you do your research and have a clear purpose for investing in the first place. Once you know why you are investing, then it will be easier to answer when now might actually be a good time.
What are your goals for investing in stocks?
Are you looking to make extra money?
Do you enjoy learning about the fundamentals of your favorite companies?
Do you have the time to invest to learn about investing in stocks and executing trades?
The desire to increase your investment accounts and net worth appealing?
If you answered yes, then you are ready to start investing in stocks.
If you said no, then stick to consistently investing in EFTs or mutual funds. That is still a solid investing strategy!
The bottom line is whether you are ready to invest. The stock market will continue to do its thing whether you choose to participate or not.
Why does the stock market just keep going up?
The stock market has been steadily climbing for the long trend.
As a result, it’s important to be aware of the factors that influence how much you can profit from stocks. This includes understanding what drives stock prices and when these markets are likely to go up or down.
The reality is that there is no such thing as an “always” in investing — there will always be downturns at some point for any market, but those dips won’t last forever either.
As history proves, the stock market over time will keep going up.
Why has the stock market dropped?
This is the #1 reason why most people are terrified of investing in the stock market.
The fear of the stock market dropping and losing money. Or maybe they were burned in the previous market corrections in 2001 or 2008.
Typically, the stock market has dropped because of the following:
The global economy is going through a rough patch.
There is fear that the US may be headed for another recession.
The US is experiencing inflation that has caused the Federal Reserve to raise interest rates.
In other words, investors are uncertain about the future of the global economy and are afraid of a recession in the US, which will have a significant impact on the stock market.
Just remember, the S&P 500 has come back each time after posting a year or two of negative returns.
However, you can still make money as an investor when the market goes down! Learn how to ride that elevator up and down.
What are the best times to trade stocks?
Ask a few different investment gurus and you are likely to get a variety of answers such as:
It is best to trade stocks when the market is down and on a day with low volume. This way, you are less likely to be hit with volatility that could cause your profits to drop.
The best times to trade stocks are when the market is stable, meaning that there are few fluctuations in price. The most optimal time to enter and exit the market is during a period of low volatility.
The best time to trade stocks is when the market is at an all-time high. (very wrong idea, so don’t try this one)
Traders should try and stay away from markets when volatility or uncertainty is high.
It is important to understand the best times for trading stocks in order to maximize profits.
Overall, your trading plan will tell you the best time for you to trade stocks. Over time with practice in a simulated account, you will be aware of the best times for trading.
Your best times will be different than mine; they will vary for all of us and that is okay. We all view the stock market and read charts in our own way.
Best Stocks to Buy Right Now
What are the stocks to invest in right now? Should you buy stocks now?
Well, first of all, I am not an advisor telling you what to invest in. You are responsible for doing your due diligence.
The best stocks to buy are the stocks that you understand the best– YOUR Watchlist!
Typically, that means following 10 stock tickers and learning everything you can about how those stocks move.
Other investing gurus may tell you the best stock to buy is one that has a low price-to-earnings ratio. This is because the company has room for growth, and they are more than likely not overvalued in the market. They look for industries that are experiencing either a slowdown or an increase in competition.
Personally, I like to stick with strong, healthy companies to buy.
Many times the best stocks to buy right now are growth stocks, which have been very successful in 2021. These types of companies grow rapidly and offer significant returns on investment in a short period time frame.
What are the best stocks to buy now or put on a watchlist? These are the most popular stocks investors tend to follow:
Apple (Nasdaq: AAPL)
Advanced Microdevices (Nasdaq: AMD)
Amazon (Nasdaq: AMZN)
Meta / Facebook (Nasdaq: FB)
Nvidia (Nasdaq: NVDA)
Tesla (Nasdaq: TSLA)
More Best Stocks to Buy
When you invest in these stocks as an investor, it is important that you look for them during their good moments so that your investments will increase significantly over time and always have risk management strategies in place (BEFORE YOU ENTER THE TRADE).
Can You Afford to Buy Stocks?
There are a lot of factors that go into determining the best time for someone to begin investing or trading stocks.
The most important aspect is whether or not you have enough money at your disposal, which can be determined by your personal financial situation.
Other factors that may play a role in determining the best time to trade are whether or not the person trading has a specific investment objective, and if they have a time-sensitive need.
You need to know your long-term goals for buying stocks.
Are you buying stocks as a long-term investor or if you are buying stocks for income?
Either way, you need a solid idea of how to plan to manage your risk and maximize your profit. That is why investing in stocks is so enticing for so many traders.
Read Now: How Fast Can You Make Money in Stocks?
So, should you buy stocks now?
The current market conditions are a great time to buy or short-sell stocks.
However, there are many trading mistakes when investors place a trade.
Whether we are experiencing a bull run or heading into a bear market, there is always money to be made in the stock market. You should not question yourself is it time to buy stocks.
Regardless, you must invest the money in a solid investing education. That is non-negotiable.
If you want to go out and start buying stocks without investing knowledge, that is fine. Just do not complain if you lose more money than the only investing course I recommend. Check out my Trade and Travel review.
You must do your own due diligence when investing in stocks and finding a good time to buy stocks.
This is your investing journey!
Your journey will be different than my investing journey. That is okay because we each will find our niche and how we like to trade stocks.
Back to the original question, is now a good time to buy stocks?
Overall, you must look for the best companies to invest in. That will make you successful at investing.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
I didn’t know how to pronounce Les Miserables until 2017. Now I know all the songs. My wife bought us tickets to the show for my birthday this year. What a triumphant masterpiece! 99% of children dislike art museums, musicals, and reading the news. But many adults find beauty or intrigue in those same ideas.
A similar “boring-to-not-boring” transition happens in personal finance. The problem is that the fun doesn’t last. We had fun getting our personal finances under control. We got hooked on that fun. It lasted for months or even a few years. Money went from a scary unknown to an exciting area of optimization.
But then we got it all figured out and…well, the thrill is gone as B.B. King sang. And thus you find yourself here, on a .blog domain. Who uses .blog?!
Don’t despair. The lack of financial fun is a good thing. It’s a sign that your finances are in a great place.
But I still find fun financial things to think about and learn. There are a few traditionally “boring” topics that I find exciting. I’ll share them below, and maybe you’ll be intrigued too.
Get to Know Your Taxes
Can it get more boring than taxes?!
Actually, I like taxes. Over the past two years, I’ve realized that the tax code is half puzzle and half game, and I love puzzles and games.
The rules are well-defined (but there are a lot of them). I certainly do not know all the rules, but the more rules I learn, the better my “strategies” become.
The “pieces” interact in different (and sometimes surprising) ways. There are always multiple ways to “solve” a tax problem. Some solutions decrease this year’s taxes, and others decrease future taxes. Sometimes, we trade off lots of effort and paperwork to save a few bucks; is that a worthwhile trade?
If you’re a young W2 worker (like me), there’s not too much to know. Our tax scenario is fairly simple.
But if you’re a retiree earning Social Security income, making IRA withdrawals, realizing short and long-term capital gains, earning interest, dividends, and more, you’ve got an interesting puzzle before you! The interactions on a simple 1040 Federal Tax return can be quite complex and involve thousands of tax dollars per year.
If you’re a business owner or a real estate investor, the “puzzle” intensifies! This is why a good CPA accountant is worth their weight in gold.
To be clear, tax planning is not about cheating the tax system. When accountants tell me they’re “aggressive,” I take it as a euphemism for “I bend the tax code until it breaks.” That’s bad—and usually illegal. Avoid that. If you’re an honest accountant, please find a different word than “aggressive.”
But working with a tax professional who 1) knows the “rules” of the tax code and 2) enjoys optimally “solving the puzzle” you bring to them…well, odds are they can solve your puzzle much better than you can alone.
Pro tip: starting this year, review your 1040 Federal Tax Return (or your country’s equivalent)…try to go line-by-line, and if you don’t understand what a particular line item means, look it up.
Wait. For A Decade or Two.
The Best Interest is a big proponent of long-term investing, which, as you might have noticed, includes the verbiage “long-term.”
We’re not talking weeks or months. We measure in decades. We beat a slow-tempo’d drum of basic tenets, like “buy and hold” and “diversify” and “don’t look for needles, buy the whole haystack.“
BORING!
To spice things up, I like to remind myself (and you) of market history. One of my favorite cautionary tales is that returns are never promised, and we’ve suffered decades of zero returns.
In that article linked directly above, I put together this chart:
WOW! Multiple ~20 year periods of zero return?!
As I’ve realized in hindsight, there’s a problem with that chart. Everything is factually correct, but the chart presents data differently than most people think. I inflation-adjusted the data. In other words, the chart does not measure dollars and cents. It measures purchasing power.
There have been multi-decade periods when investors’ purchasing power was stagnant. Their accounts increased in value, but inflation ate the entirety of those gains.
Most of us, though, measure our accounts in dollars and cents. We understand the reality of inflation, constantly knawing at our purchasing power. But we don’t inflation-adjust our conception of the world. If $1.00 grows to $2.00, we see exactly that. We don’t say, “…but inflation was 14%, so really it’s like I only have $1.86.”
To fix this problem, I reconstructed the plot to show nominal dollars.
If you read my primer on accounting for inflation in retirement, the chart above lives in “the convenient world” while the chart below lives in “the true world.”
The lesson: it’s realistic for your diversified stock portfolio to go through a ~5+ year period of negative nominal returns. If you’re unlucky, it might stretch out to 10+ years!
Now that’s exciting (in the same way BASE jumping is exciting).
It’s a far stretch from the lazy shorthand of “the S&P returns 10% year!” that too many FinFluencers use. I’ve been guilty of that shorthand, and I understand its usage when calculating 30-year compound math.
I despise that shorthand, though, when I hear it used to explain expected stock market returns to a new investor. New investors need to know that stock investing is not a smooth ride. It’s not always up and to the right. It involves years – if not decades – of what feelslike wasted time.
5 years is a long time. 10 years, per math, is longer. Are you excited to stay the course that long through thick and thin?
Important note: this analysis looked at a lump sum investment. Dollar-cost averaging, though, smooths this ride out immensely!In fact, DCA actually takes advantage of bad times and volatility. I’m a huge fan of DCA’d monthly contributions through thick and thin.
Know Your Flow
Cashflow is the cinder block of personal finance.
It’s boring and basic and plain and every other synonym thereof.
But it’s also foundational.
You cannot build strong personal finances without healthy cash flow, and you won’t know if you have healthy cash flow unless you measure it.
Buy Protection
Speaking of BASE jumping…
The exciting part of extreme sports is “the jump” itself. But it’s someone’s job to consider the “boring” questions like,
“Is that parachute packed correctly?”
“Can that bungee cable support a 300-pound man?”
“If he doesn’t make it and lands in the pit of burning tires, what’s the rescue plan?”
Ok. That’s kind of funny. But on a more serious note, about the modern miracles of CPR and AED?
Christian Eriksen is a Danish soccer player, currently on the roster for Manchester United. On June 12, 2021, Eriksen had a cardiac arrest during a national team game against Finland. 50 years ago, he would be dead. But because the training staff is both CPR-trained and well-equipped with a automated external defibrillator (AED), Eriksen’s heart was shocked (one shock!) back to life. He’s still plays today.
A similar cardiac arrest happened to Damar Hamlin in a Buffalo Bills football game in January 2023. Again, an AED shocked his heart back to life. He’s alive and well and still playing football.
These might be 1-in-10000 events. Easy odds to ignore, right? But asking, “What happens if…” can lead you to some life-saving answers. A little preparation goes a long way.
The personal finance world skews less life-and-death than cardiac arrest, but some of the financial “Q&A” will point you toward:
A well-funded emergency fund.
Life insurance (term only!)
Home and auto insurance
Disability insurance
An umbrella insurance policy
If you’re unsure what kind of insurance you do (or don’t) need, ask yourself:
If something bad happened on [this axis], do I have the assets needed to pay for it?
If I died, would my family have the assets and cash flow to continue our desired lifestyle? If not, you need life insurance.
If I got disabled and couldn’t work…
If my house burned to the ground or got swept away in a hurricane…
If I got sued when the mailman trips on my sidewalk…
Etc. etc.
If you don’t have the assets to cover your liability, you need insurance.
You Made It. Go Live Life!
If everything in your finances feels boring, that’s a good thing. You’ve reached the top.
There are plenty of nuanced topics to nosedive into.
Or, you can just go live your life. Go check out a musical or a museum. Another story must begin!
Thank you for reading! If you enjoyed this article, join 8000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.
-Jesse
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As I watch it snow here in the Sierra, hey, if you’re going to watch one video this week, watch this 15-second classic (with sound) on how our banking system works. You’ll watch it at least twice, and let your kids figure it out. Since its all-time high of 30,456 in 1921, the bank population in the United States had declined to only 4,377 at the end of 2020, a decline of about 86 percent. Thousands of residential lenders hope they’re not involved in the same trend. I mention this because, speaking of numerical trends, the United States is producing more oil than any country has ever produced in the history of the world: 13 million barrels per day. It’s been economically punishing for the countries in OPEC+, which has seen its global market share drop to a new low of 48 percent. This is an interesting issue when it comes to inflation, which helps drive mortgage rates, and will be a very interesting issue in the next eight months when it is expected that two octogenarians will be vying for the top job. (Found here, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Hear an interview with Nerdwallet’s Kate Wood on housing market supply and advice for potential homebuyers.)
Lender and Broker Services, Products, and Software
To access the largest subset of home buyers in the market, lenders are redefining their go to market strategy. Milestones’ homeowner engagement solution goes well beyond a “What’s my home worth?” assessment. It enables lenders to proactively guide consumers through the entire homeownership journey with weekly touchpoints that are relevant and specific to their home. With essential resources for home services, home improvements, home document storage, and a homeowner dashboard to monitor and track their activity in one place, this platform is the one-stop shop for all things home. What sets them apart is its fully white-labeled capabilities that provides a seamless consumer experience that keeps YOUR lending products and partners top of mind. Adopt the ultimate homeowner engagement solution to connect more meaningfully with your prospects and borrowers and uncover new opportunities to boost your revenue. Book a meeting with sales today.
“Innovation-Powered Precision, Time-Tested Excellence! With a foundation built on 43 years of experience, PCV Murcor brings a deep understanding of our clients’ goals that complements appraisal modernization. Over our long history, we have honed our processes to provide reliable and unparalleled appraisal management services, setting the standard for excellence in the industry. Our use of state-of-the-art AI technology ensures precision and efficiency in every aspect of our service. AI’s ability to enhance efficiency, accuracy, and flexibility is reshaping the way properties are evaluated with distinct advantages. To learn more about our future-ready solutions for today’s appraisal management, visit here.”
“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), focuses on relationship-driven business with long-term success, by-the-way, have you heard about our BTW Services? We are pleased to offer all customers our Broker-Dealer, Treasury Management and Warehouse Lending (BTW) services. Our Broker-Dealers can help customers hedge their origination pipelines by buying and selling TBAs, specified pools and whole loan trading. Our Treasury Management team helps customers with escrow and cash management. Finally, the Warehouse Lending team provides customers with confidence to meet their loan funding needs. If you are interested in learning more about our BTW Services please contact Deric Barnett or Justin Tannen.”
TPO, Broker, and Correspondent Product News
“It’s been a busy first quarter for the Newrez Correspondent team! Delegated pilot programs for both 2nd Mortgages & Non-QM have been launched with more exciting news on the way. Enhancements to come include HomeReady® & Home Possible® $2500 grant products; FHLMC’s GreenCHOICE; FHA HUD 184/Heritage; Co-Issue offering, along with improvements to our Non-QM Smart Series programs, Enote expansion and more. Soon, our sales team will present our top 2023 clients their Premier Partner Plaques (PPP). This PPP award recognizes the partnership and is awarded to our lenders who finished at the top for loans funded in 2023. There are so many reasons to be aligned with a top tier partner, and Newrez Correspondent is that partner! For those not signed up with Newrez and looking to take advantage of these enhancements, or existing partners who want to become Premier, contact our sales team to learn more.”
Rocket Pro TPO has announced an update to its offerings, including its Credit Upgrade program. This initiative, previously exclusive, is now available to all partners. It provides a no-cost, rapid rescore service for clients with credit scores between 570 and 779, aiming to help them qualify for better loan products and rates. Additionally, Rocket Pro TPO offers a Home Equity Loan product that allows clients to protect their low mortgage rates while tapping into their home’s equity at a competitive rate. This option provides a fixed-rate, lump-sum payment, offering a stable alternative to variable-rate loans. For those interested in learning more about Rocket Pro TPO’s cost-saving products, the replay of their latest IGNITE Live seminar is available on their YouTube channel: IGNITE Live Replay. For more information on Broker or Non-Delegated Correspondent partnerships, contact Rocket Pro TPO to learn more.
Angel Oak Mortgage Solution is now offering Bank Statement Loans tailored specifically for self-employed individuals who have been in business for 1-year.
Reach more clients with LoanStream’s Non-QM Programs with loan amounts up to $4 Million. LoanStream NaNQ / Non-QM Programs are proprietary programs specifically created to fulfill mortgage program options for LoanStream brokers with non-prime programs.
The 5 Cs of Credit
A good trivia question for underwriters, or loan originators, is, “What are the 5 C’s?” The answer is character, capacity, capital, collateral, and conditions. Those are from a simpler time, but the fundamentals still apply despite all the hubbub about credit costs, scores, monopolies, hard pulls versus soft pulls, and… tri-merge versus bi-merge. I bring this up because it appears that the “new” scoring and bi-merge will be done at the same time, at the end of 2025. So, the industry has some to adjust and accommodate.
“Dear Stakeholders,
“Thank you for your continued engagement with FHFA’s Credit Score Initiative. As many of you likely saw, FHFA just announced a series of updates related to the implementation of the new credit score requirements for single-family loans delivered to Fannie Mae and Freddie Mac (the Enterprises). We are also pleased to announce the schedule for upcoming stakeholder forums to be hosted by FHFA, which is outlined below.
“Following valuable and thoughtful feedback gathered from the sessions held in late 2023, FHFA is aligning the implementation date for the bi-merge credit reporting option with the transition from the use of Classic FICO. This aligned transition is expected to occur in the fourth quarter of 2025. We expect this update will reduce cost and complexity for market participants.
“To better support the transition, the Enterprises are accelerating the publication of historical data on the VantageScore 4.0 model. This publication, originally targeted for the first quarter of 2025, is now expected early in the third quarter of 2024. FHFA and the Enterprises continue to work towards providing similar data to support the transition to the FICO 10T model.
“We would like to thank all those who participated in the stakeholder forums for sharing their perspectives on the sequencing of project milestones, as well as the expected uses of the historical data to support the new models. Your input helped inform the latest updates to the Credit Score Initiative.
“FHFA will be hosting the next series of virtual stakeholder forums in the coming weeks. The schedule is planned as follows: Bi-Merge Implementation Considerations (Tuesday, March 12, 3:00-4:00pm Eastern), Bi-Merge Implementation Considerations (cont’d) (Tuesday, March 26, 3:00-4:00pm Eastern), Transition Period Loan Delivery Considerations (Tuesday, April 9, 3:00-4:00pm Eastern), and Transition Period Loan Delivery Considerations (cont’d) (Tuesday, April 23, 3:00-4:00pm Eastern).
“As a reminder, these virtual stakeholder forums are open to the public, but they are not intended for media purposes. FHFA will provide agendas, materials, and links to access the sessions as they approach. Thank you again for your continued engagement. If you have further questions or thoughts, please contact us at [email protected].”
After 2023’s jarring price hikes, the credit bureaus and FICO are raising their credit reporting costs once again, passing this on to credit reporting agencies (CRAs). This latest price increase affects both hard and soft pull credit reports. In response, CRAs everywhere have updated their pricing options, allowing the customization of lender’s prequalification options to suit budgets.
And compliance departments noted that the FTC, which has authority to enforce the Equal Credit Opportunity Act (ECOA) against most types of non-depository financial services providers, issued a report in February describing its enforcement actions and related activity under ECOA during 2023: Annual Report on Its ECOA Enforcement and Policy Development Activity.
Capital Markets
The Fed has been preaching patience from markets when it comes to enacting rate cuts, a sentiment that was further bolstered yesterday after the central bank’s preferred price gauge rose in January at the fastest pace in almost a year (2.4 percent). Inflation rose 0.4 percent month-over-month compared to a downwardly revised 0.1 percent increase in December. The core rate increased 2.8 percent year-over-year. Personal Incomes rose 1.0 percent in January, which was also much higher than expected, driven primarily by growth in the annual cost of living increase in social security. Fed policymakers took the data in stride, repeating that easing can begin in the summer and there is room to be patient.
Yesterday also saw the release of a weaker-than-expected Chicago PMI for February and a disappointing Pending Home Sales report which came in down 4.9 percent for January. Initial jobless claims for the week ending February 24 increased to 215k, which is still a relatively low number for this series. Continuing jobless claims for the week ending February 17 increased by 45,000 to 1.905 million, which is the highest level for that series since November. It has become more challenging to find a new job right away, which indicates that the labor market is not running as tight as it once was. The four-week moving average for continuing claims of 1,879,750 is the highest since December 11, 2021
Today’s economic calendar contains no “first tier” scheduled market-moving news but has no fewer than seven Fed speakers scheduled. Go ahead and add in the final February S&P Global manufacturing PMI, ISM manufacturing PMI for February, January construction spending, and Michigan sentiment for February. (Unemployment data, normally released on the first Friday of the month, is next Friday.) After the 10-year yield rose 28 basis points in February, we begin March with the 10-year yielding 4.23 after closing yesterday at 4.27 percent, Agency MBS prices better about .125, and the 2-year at 4.59.
Jobs
Mark Pasternak appointed as the newest SecurityNational Mortgage Company VP to Spearhead Operational Excellence. In a significant move to bolster its leadership team, Security National Mortgage Company has announced the appointment of Mark Pasternak as Vice President of Mortgage Operations. Pasternak joins the company with over three decades of industry experience, including his most recent tenure serving as EVP of Operations at Academy Mortgage. His leadership background in both sales and operational management is sure to provide an operational edge for SecurityNational Mortgage. Andrew Quist, President of SecurityNational Mortgage Company, stated: “Mark is joining us with a wealth of experience and his innovative nature will be highly valuable to our operations team. Even in this challenging mortgage rate environment, SecurityNational is still dedicated to recruiting elite industry talent like Mark that align with our growth focused business objectives. We’re excited to see the impact Mark will have in our operations.” The addition of Mark Pasternak to the SecurityNational team underscores the company’s commitment to recruiting top talent to lead its strategic initiatives. With Pasternak at the helm of operations, SecurityNational is poised to enhance its operational capabilities and achieve new milestones in service and efficiency.
In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.
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Inside: Secure your financial future with insights into the top appreciating assets. Find the best appreciating assets and learn how to grow wealth with strategic investments.
Asset appreciation isn’t just an economic term; it’s the fuel that powers wealth creation. Think of appreciating assets as the golden geese, steadily laying valuable eggs that grow in size over time.
This is a crucial concept that triumphs and what you own can become the cornerstone of your financial success.
Asset appreciation isn’t just a buzzword; it’s the driving force behind significant wealth accumulation.
Whether you’re just starting or looking to expand your portfolio, understanding the role appreciation plays can mean the difference between mediocrity and staggering success.
Now, let’s dig in and help move your net worth higher.
What Are Appreciating Assets?
Appreciating assets are the golden geese of the investment world. They are the powerful engines that drive your net worth higher over time.
When you invest in assets like real estate, stocks, and even fine art, you’re placing a bet on their future value.
Unlike the car that loses value the moment you drive it off the lot, these assets typically gain worth, supernova-style, expanding your financial universe with every passing year.
How do assets appreciate in value?
Appreciation, at its core, is an asset’s journey from ‘worth X’ to ‘worth X and beyond’. But how does this magical wealth-building happen?
Several factors can give assets a financial boost.
For starters, the traditional law of supply and demand plays a huge role—if more people want it and there’s not enough to go around, the value goes up.
Toss in the influence of interest rates, economic growth, and geopolitical stability, and you have a mix that can push asset value into new echelons.
Even inflation can be a friend to assets, increasing their nominal value over time.
Remember, appreciation isn’t a given; it’s a hopeful trajectory bolstered by market forces and wise decision-making. You want to hop onto the appreciation train with assets that offer the promise of increasing in value, not just for now, but well into the future.
How to increase net worth with appreciating assets
Increasing your net worth with appreciating assets is like laying bricks for a financial fortress—it requires strategy, patience, and a mix of assets that have a history or strong potential for growth.
Start by assessing your current holdings and considering where you can diversify with assets that shine in appreciation prospects. It’s a game of balance, where you mix higher-risk, high-reward options with stable, gradual growers.
Make a habit of routinely re-evaluating your assets, keeping in mind economic trends and your personal goals. Sometimes, this may mean letting go of underperformers in favor of assets with brighter horizons.
Consider leveraging tax-advantaged accounts and investment strategies to maximize your wealth growth.
Most importantly, ensure liquidity so you can capitalize on new opportunities. Having liquid assets means you won’t miss out when the next big appreciating asset comes knocking.
Top 5 Appreciating Assets You Must Own
#1 – Stocks with High Growth Potential
Stocks are the daredevils of the investment world, particularly those brimming with high growth potential. They’re the kind that can catapult your net worth to the stratosphere if chosen wisely.
Tech giants like Nvidia, Microsoft, Google, Amazon, and Meta are testament to this—their growth over the decades has turned modest investments into fortunes.
Investing in high-growth potential stocks is like spotting a gem in the rough – if you spot the right ones, your financial prospects could shine brightly. You must learn how to invest in stocks for beginners.
Personally, I cannot stress how important it is to learn how to invest in the stock market as I can attest this is how you quickly grow your net worth.
Best For: Investors with a higher risk tolerance who are aiming for greater returns or dividend stocks and have the patience to weather market fluctuations.
#2 – ETFs to Streamline Investments for Optimal Performance
Exchange-Traded Funds (ETFs) are the investment world’s multitaskers, pooling the potential of various assets for optimum performance. By offering a diversified portfolio within a single share, they allow investors to spread their risk while reaping the growth benefits of different markets and sectors.
ETFs provide an easy and efficient way to diversify investments, reducing risk while still offering growth opportunities. They’re especially game-changing for those who prefer a “set and forget” strategy, as many ETFs are designed to passively track indexes or sectors. Many track the S&P, so you can easily invest in the overall market.
They’re cost-effective, often having lower fees than traditional mutual funds, and are accessible to investors with varying levels of experience.
Best For: Both beginners and experienced investors looking for a blend of simplicity, cost efficiency, and diversification in their investment strategy.
#3 – Real Estate: A Staple in Appreciating Assets
Real estate has long stood as a bulwark in the investment community, a reliable appreciator that doubles as both a tangible asset and a potential home. It’s a market marked by stability and a historical uptrend in value, making it a classic choice for those seeking long-term wealth growth.
Owning property is synonymous with the very concept of asset growth, with the power to withstand economic ebbs and flows. Location continues to be the drumbeat to its rise in value – a prime spot can transform a simple parcel into a gold mine.
Plus it is a tangible asset that provides utility and can serve as a hedge against inflation.
Whether it’s through REITs, crowdfunding platforms like Fundrise, or direct ownership, real estate can anchor your investment strategy on solid ground.
Best For: Investors seeking a tangible asset with a dual aim of long-term capital appreciation and passive rental property income. Ideal for those ready to manage properties or hire management, and for those who can handle the responsibilities of ownership.
#4 – Your Own Business: Betting on Your Entrepreneurial Spirit
Your own business isn’t just a job, it’s a reflection of your passion and an opportunity to control your financial destiny. When successfully executed, a business can become one of the most valuable appreciating assets, offering unparalleled autonomy and potentially substantial economic rewards.
Starting a business can lead to exponential wealth growth as the company expands and becomes profitable.
Your business’s value can significantly increase over time, making it a formidable asset in your net worth.
Owning a business is not just about the profits; it’s a journey of personal growth, resilience, and the triumph of turning passion into paychecks. It’s a path that can lead to great wealth, especially when one approaches it with clear strategy and unquenchable enthusiasm.
Best For: Individuals with entrepreneurial spirit, a viable business idea, and the readiness to invest time and capital into a long-term venture. Suitable for those who are tenacious and willing to face the challenges of entrepreneurship head-on.
#5- Self-Investment: The Ultimate Asset with Infinite Returns
Investing in yourself is like planting a seed that grows into a sturdy, towering tree, sheltering your financial future.
This investment can unlock doors to better opportunities, higher incomes, and greater job satisfaction. Whether it’s through education, health, or personal development, the returns on self-investment can be limitless.
Personal development often correlates with higher levels of personal and financial success.
Remember, when you invest in yourself, you become capable of crafting a life that not only brings in wealth but also contentment and a deeper sense of success.
Best For: Any individual seeking to enhance their career trajectory, entrepreneurship potential, or personal satisfaction. This approach is ideal for those who are committed to lifelong learning and self-improvement.
Other Examples of Appreciating Assets You Can Own
The Role of Bonds in a Diverse Securities
Bonds, those steadfast soldiers of the investment world, offer a buffer of safety amid the high-flying volatility of other assets. In a diversified portfolio, bonds contribute stability and predictable income, making them an essential element for many investor’s strategies.
They provide a fixed income stream with less volatility than stocks, acting as a cushion in economic downturns.
Bonds can offer a balance in investment holdings, mitigating risk and providing steady returns. Just make sure the returns are higher than an interest-bearing money market account.
Best For: Investors seeking to balance their portfolio with a lower-risk asset or those nearing retirement who prioritize income and stability over high growth.
Cryptocurrencies: The Digital Gold of Tomorrow?
Cryptocurrencies have emerged as the mavericks of appreciating assets, offering a wild ride with the allure of high-stakes jackpot payouts. As the “digital gold” of the modern era, they encapsulate the spirit of decentralization and technological innovation.
While their volatility can stir up investor heartbeats, their dramatic price appreciation stories make them impossible to ignore for those seeking the thrill of potentially explosive gains.
Even as the cryptocurrency markets continue to ebb and flow, they offer a unique proposition in wealth growth strategies—a high-risk, high-reward horizon that has many gazing toward the future with wallets in hand.
Best For: Tech-savvy investors with a high risk tolerance, seeking to diversify with a modern asset class that has considerable growth potential.
Fine Art and Collectibles: Value Beyond Beauty
Fine art and collectibles are not just a feast for the eyes; they’re also a banquet for your investment portfolio.
These assets bring value that transcends their aesthetic appeal, becoming cherished as cultural treasures and financial boons alike. With the intrinsic charm of rarity and historical significance, art pieces and collectibles can appreciate substantially over time, especially when curated with an expert eye.
For instance, this rare portrait of George Washington is expected to fetch $2.5 million at an upcoming auction.1
Best For: Connoisseurs with a passion for the arts or history, and investors looking for long-term, value-holding assets that also serve as cultural and personal investments. Ideal for those with substantial capital ready to navigate the less liquid markets.
Precious Metals: Why Gold and Silver Remain Attractive
Gold and silver aren’t just the treasures of lore—they’re enduring staples for those looking to fortify their wealth. Their allure lies in their history, intrinsic value, and the stability they can provide when economic tides turn tumultuous. Gold and silver are known for their resilience during economic downturns and inflationary periods. As such, learn how to invest in precious metals.
They are tangible, finite resources with universal value, often resulting in consistent demand.
Best For: Investors looking to hedge risks or seeking a stable store of wealth.
Prospects of Private Equity in Upcoming Markets
Private Equity (PE) forms the backbone for the next wave of market disruptors and innovators. Investing in private companies, especially in emerging markets, can yield substantial capital appreciation as these businesses grow and mature, sometimes well before they hit the public sphere.
This has significant potential for appreciation as companies scale up their operations and increase their market footprint.
Best For: Sophisticated investors with a high-risk tolerance and a long investment horizon. They typically have a significant amount of capital to invest and are looking for opportunities outside of public markets to achieve potential high returns.
Venture Capital’s Role in Shaping Future Wealth
Venture Capital (VC) is the financial catalyst that turns innovative startups into tomorrow’s industry leaders. By injecting capital into early-stage companies, VC not only generates the potential for staggering returns but also plays a critical role in shaping future markets and consumer trends.
It plays a critical role in shaping the business landscape of tomorrow by investing in innovation today. With its penchant for high-risk ventures, VC remains an appealing asset class for those with a futuristic vision who are keen to be part of the next big thing.
Venture capital isn’t merely about capital gains; it’s an embrace of progress, a stake in the evolution of industries, and a partnership with the brightest minds of a generation.
Best For: Investors who have a deep understanding of emerging markets and technologies, a high-risk tolerance, and the patience for long-term investment. Also ideal for those who wish to actively participate in the entrepreneurial process and impact the future direction of new businesses.
The Thriving Market for Vintage Automotive Collectibles
Vintage automotive collectibles are revving up the collectibles market with a roar.
Car enthusiasts and investors alike recognize that certain classic models don’t just retain their charm; they accelerate in value over time. The emotional connection, the engineering legacy, and the nostalgia factor turn these vehicles into appreciating assets with a personal touch.
Plus they offer a tangible investment that can be appreciated both visually and through the driving experience.
Best For: Auto enthusiasts who appreciate the craftsmanship of vintage models and are prepared for the hands-on involvement required. Most may see them as a collectible rather than an investment.
Sports Memorabilia as Lucrative Investments
Sports memorabilia takes you on a trip down memory lane, connecting you to pivotal moments and legends of the past. This nostalgia mixed with exclusivity propels their value, making them sought-after assets in the realm of investing.
The emotional and sentimental value tied to sports icons and historical moments can drive considerable investment interest and demand.
Best For: Sports fans who want to combine their passion with investment potential and like to show off their memorabilia.
Land: The Original Real Estate Investment
Land is the progenitor of all real estate investments, offering a blank canvas for potential development or holding value as a scarce resource. With an appeal that has stood the test of time, land remains one of the most fundamental appreciating assets in the investment portfolio.
It is a finite resource; they’re not making any more of it, so demand can only go up as supply remains constant.
Increases in development, population growth, and changes in land zoning can significantly enhance land value over time.
Best For: Investors seeking to hedge against inflation and looking at long-term growth prospects. Land is best for those who have the capital to invest without the need for immediate returns and can wait for the right opportunity to maximize their profits.
Commodities: A Staple in Diverse Investment Portfolios
Commodities offer a slice of the global economic pie, essential for their role in everyday life—from the grain in your breakfast cereal to the petroleum powering your car. As tangible assets, commodities can provide a buffer against inflation and diversify investment portfolios. A similar case could be made for trading currencies.
Commodities, including metals, energy, and agricultural products, often increase in value with inflation and global demand. They provide an investment route less correlated with the stock market, adding portfolio diversification.
Best For: Diversification seekers and those comfortable dealing with market fluctuations who understand global economic trends. Ideal for investors who wish to hedge against inflation and have an interest in tangible or sector-specific assets.
Navigating the High-Yield Savings Landscape
High-yield savings accounts have emerged as essential vehicles for preserving and modestly growing wealth.
In 2022-2024, with interest rates eclipsing their traditional counterparts, these accounts are more relevant than ever for savvy savers seeking to keep pace with inflation. They provide a safe haven for emergency funds or short-term financial goals while offering better returns than a typical savings account.
They provide a low-risk option to grow savings with the added convenience of liquidity. Just like certificates of deposit or CDs.
Best For: Individuals aiming for a secure, accessible place to save money with a better yield than traditional banking products. Especially well-suited for those starting to build their emergency funds or setting aside cash for near-term expenses.
Peer-to-Peer Lending – A Trend to Watch for Asset Growth
Peer-to-peer (P2P) lending shakes up traditional banking by directly connecting borrowers with investors through online platforms. This asset class is gaining traction, providing a novel way to potentially generate higher returns compared to traditional fixed-income investments.
P2P lending platforms offer higher returns on investment over standard savings, as you’re effectively acting as the bank.
It’s a cutting-edge way to diversify your investment portfolio beyond traditional stocks and bonds.
Best For: Investors looking for alternative income streams and who are comfortable with the risk associated with lending money.
Intellectual Property and Patents: An Overlooked Avenue for Wealth Creation
Owning the rights to an invention or unique creation can lead to a wealth of opportunities, with patents often being a gold mine for inventors and savvy investors alike.
Patents, in particular, hold the promise of a decade-long fruitful life, offering the potential for significant monetary returns through licensing or sales.
Best For: Inventors, entrepreneurs, and investors who are versed in industries where innovations are rapidly commercialized. It’s well-suited for those able to navigate the intricacies of patent law and capable of investing in the enforcement and marketing of their IP.
Alternative Investments: Unique Opportunities for Accredited Investors
Accredited investors have the advantage of accessing a broader range of alternative investments that may not be available to the general public, offering potentially higher returns and portfolio diversification. These can include private equity, hedge funds, and exclusive real estate deals.
It’s crucial, however, for accredited investors to conduct thorough due diligence and assess their risk tolerance when allocating a portion of their portfolio to these alternative assets.
Best For: Seasoned investors looking for diversification and higher risk-reward ratios and qualify as an accredited investor.
Luxury Goods: When Opulence Equals Investment
Luxury goods are not only symbols of status and opulence but can also solidify your investment game. High-end watches, designer handbags, and exclusive jewelry collections often see their value climb, defying the usual wear-and-tear depreciation.
They resonate with collectors and enthusiasts, transforming personal indulgence into a viable investment strategy.
Best For: Investors with a penchant for the finer things in life and enthusiasts looking to blend personal enjoyment with financial gain.
Secrets of the Antique Trade: Seeking Out Hidden
The antique trade is akin to a treasure hunt, where seasoned savvy meets the thrill of discovery. Unearthing hidden gems within flea markets, estate sales, and auction houses not only provides a historical connection but can also reveal investment diamonds in the rough.
Antiques carry the potential for significant bottom line appreciation due to factors like rarity, provenance, and desirability among collectors.
Like finding this antiquated nautical map at an estate sale and now listed for $7.5 million. 2
Best For: Collectors with a passion for history and an eye for value.
What If You Have A Depreciative Asset?
If you’re holding onto a depreciative asset, it’s like grasping a melting ice cube: time can whittle away its value.
Consider selling to repurpose the capital into something that appreciates, upgrading to a more efficient model, or simply using it fully before its value dips too low. Each depreciative asset requires a tailored strategy, balancing between cutting losses and extracting maximum utility.
It’s a strategic financial dance — knowing when to hold on and when to let go of depreciative assets can ensure they serve your bottom line more than they hurt it.
FAQs
Appreciating assets are financial powerhouses that grow your wealth over time. They combat inflation and can provide additional income streams.
By increasing in value, they enhance your net worth, creating a more robust financial foundation for your future endeavors.
Appreciating assets are typically categorized based on their nature and the way they generate value. Common categories include tangible assets like real estate and collectibles, financial assets like stocks and bonds, and intangible assets like patents and copyrights.
The assets that don’t often depreciate include real estate, precious metals like gold and silver, and certain collectibles such as fine art or vintage cars. These assets maintain value or appreciate over time, resistant to the typical wear and tear or technological obsolescence that affects other assets.
Which Asset that Has Appreciation in Value Interests You
In conclusion, adding appreciating assets to your portfolio is a strategic move towards achieving financial security and building long-term wealth.
These assets combat inflation by potentially increasing in value over time, providing an opportunity to earn returns that exceed the average inflation rate.
However, these assets are not considered to be part of your liquid net worth. With all appreciating assets, you must consider the potential taxes on your various investments.
To facilitate this wealth-building strategy, it’s vital to practice saving diligently—consider automating your savings, cutting unnecessary expenses, and increasing income streams. By consistently setting aside funds, you can gradually invest in diverse appreciating assets such as stocks, real estate, or retirement accounts.
This is how you start forming a life consistent with financial freedom.
Source
Barrons. “Rare Portrait of George Washington Could Fetch $2.5 Million at Auction.” https://www.barrons.com/articles/rare-portrait-of-george-washington-could-fetch-2-5-million-at-auction-e2f19134. Accessed February 20, 2024.
Los Angeles Times. “A $7.5-million find: Overlooked Getty estate sale map turns out to be 14th century treasure.” https://www.latimes.com/california/story/2023-10-25/map-dealer-discovers-14th-century-portolan-chart-getty-estate-sale. Accessed February 20, 2024.
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Stocks are shares of ownership in a company. To start investing in stocks, you would find a company that you like and think might grow in value and then purchase its stock through a brokerage account. If the stock price rises, you could sell your shares and potentially make a profit — or not if share prices decline.
Of course, when it comes to investing for beginners, you need to learn some basics to invest in stocks and do it well. Thanks to technology and various educational resources, you can get started using an app or online brokerage account and learn as you go. It has never been easier to build investing confidence as you gain experience. Here is a step-by-step guide for those who want to start investing in stocks now.
Key Points
• Stocks represent shares of ownership in a company and can be purchased through a brokerage account.
• Before investing in stocks, determine your investing approach and consider your time horizon.
• Different ways to invest in stocks include self-managed investing, using a financial advisor, or utilizing robo-advisors.
• The amount you invest in stocks depends on your budget and financial goals.
• Choose stocks based on thorough research, including analyzing a company’s financial statements and valuation metrics.
How to Start Investing in Stocks: 5 Steps
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1. Determine Your Investing Approach
Before you get started investing in stocks, you need to determine your investing approach. Because every person has unique financial goals and risk tolerances, there is no one-size-fits-all strategy to begin investing in the stock market.
Most people will need to decide whether they want a hands-on approach to investing or whether they’d like to outsource their wealth building to some sort of financial advisor.
Additionally, investors need to consider their time horizons before investing in stocks. Some investors want to invest long-term — buying and holding assets to build wealth for retirement. In contrast, other investors are more interested in short-term trading, buying and selling stocks daily or weekly to make a quick profit. The type of investor you want to be will help determine what kind of stocks you should buy and your investing approach.
The Different Ways to Invest in the Stock Market
Fortunately, various options are available for every type of investor as they begin to invest in stocks.
As mentioned above, some investors like to have a hands-on approach to investing. These investors want to make decisions on their own, picking what stocks are right for them and building a portfolio from the ground up. This self-managed strategy can be time-consuming but an excellent option for investors who have a general understanding of the markets or would like to learn more about them.
Other investors like to have experts, like a money manager, manage the investing process for them. While this investing approach may cost more than doing it yourself, it can be an ideal choice for individuals who do not have the time or energy to devote to financial decision-making.
2. Decide How Much you Will Invest in Stocks
How much you invest depends entirely on your budget and financial goals. Many financial experts recommend saving between 10% and 15% of your after-tax annual income, either in a savings account or by investing. With that guideline in mind, you may decide to invest with whatever you can comfortably afford.
Fortunately, it’s much easier to invest these days, even if you only have a few bucks at a time. Many brokerage firms offer low or no trading fees or commissions, so you can make stock trades without worrying about investment fees eating into the money you decide to invest.
Additionally, many brokerage firms offer fractional share investing, which allows investors to buy smaller amounts of a stock they like. Instead of purchasing one stock at the value for which the stock is currently trading — which could be $1,000 or more — fractional share investing makes it possible to buy a portion of one stock. Investors can utilize this to use whatever dollar amount they have available to purchase stocks.
For example, if you only have $50 available to invest and want to buy stock XYZ trading at $500 per share, fractional share investing allows you to buy 10% of XYZ for $50.
Asset Allocation
Asset allocation involves spreading your money across different types of investments, like stock, bonds, and cash, in order to balance risk and reward. Determining a portfolio’s asset allocation can vary from person to person, based on financial goals and risk tolerance.
Asset allocation is closely tied with portfolio diversification. Diversification means spreading one’s money across a range of assets. Generally, it’s like taking the age-old advice of not putting all your eggs in one basket. An investor can’t avoid risk entirely, but diversifying their investments can help mitigate the risk one asset class poses.
3. Open an Investment Account
Once you determine your investing approach and how much money you can invest, you’ll need to open a brokerage account to buy and sell shares of companies or whatever other assets you’d like to invest in.
Several investment accounts might make sense for you, depending on your comfort level in managing your investments and your long-term financial goals.
Professional option: Full-service brokerages
Many investors may use traditional brokerage firms, also known as full-service brokerages, to buy and sell stocks and other securities. A full-service brokerage offers additional services beyond just buying and selling stocks, such as investment advice, wealth management, and estate planning. Typically, full-service brokerages provide these services at high overall costs, while discount and online brokerages maintain scaled-down services with lower overall costs.
A full-service brokerage account may not be the best option for investors just getting started investing in stocks. These firms often require substantial account minimum balances to open an account. This option may be out of reach for most in the early stages of their investing journey.
Do-it-yourself option: Online brokerage
An online brokerage account is ideal for most beginning investors looking to have a hands-on approach to trading stocks and building a financial portfolio. Many online brokers offer services with the convenience of an app, which can make investing more streamlined. If you feel confident or curious about how to start investing at a lower cost than a full-service brokerage firm, opening an account with an online broker could be a great place to start.
Hands-off, automated option: Robo-advisor
If you’re interested in investing but want some help setting up a basic portfolio, opening an investment account with a robo-advisor might be best for you. A robo-advisor uses a sophisticated computer algorithm to help you pick and manage investments. These automated accounts generally don’t offer individual stocks; instead, they build a portfolio with a mix of exchange-traded funds (ETFs). Nonetheless, it’s a way to become more familiar with investing.
Retirement option: 401(k) and IRAs
Retirement accounts like employer-sponsored 401(k)s or individual retirement accounts (IRAs) are tax-advantaged investment accounts that can be great for the beginning investor trying to build a retirement nest egg. These accounts offer investors a range of investment choices, including individual stocks. You may also have access to tutorials, advisors, or other resources to help you learn how to start investing in these accounts.
💡 Ready to start retirement investing? Consider opening an IRA online.
Tip: Compare Costs and Features
No matter where you decide to open your investment account, be sure to research and compare costs and features within the account. For example, many brokerage accounts charge investment fees and commissions for making trades. Although investment costs can be quite low — and you can trade stocks without paying a commission — any investment fee can add up over time and ultimately reduce your overall investment returns.
Additionally, it helps to check if the investment account requires a minimum deposit to open an account. A minimum deposit can be a barrier to getting started for the beginning investor who doesn’t have much money to invest. However, many firms do not have minimum deposit requirements any longer.
4. Choose Your Stocks
Deciding what individual stocks to invest in can be challenging for most investors. There are countless ways to evaluate stocks before you buy.
Before choosing your stocks, you generally want to do a deep dive into a company’s inner workings to understand the company’s overall valuation and the stock’s share price.
As a beginning investor, you want to get comfortable reading a company’s balance sheet and other financial statements. All publicly-traded companies must file this information with the Securities and Exchange Commission (SEC), so you shouldn’t have trouble finding these financials.
One of the most fundamental metrics for understanding a stock’s value compared to company profits is its price-to-earnings (PE) ratio. Others include the price-to-sales (PS) ratio and the price/earnings-to-growth (PEG) ratio, which may be helpful for companies that have little to no profits but are expanding their businesses quickly.
These metrics, and other financial ratios, can help you determine what stocks to buy. And the advantage of owning individual stocks is that you can get direct exposure to a company you believe has the potential to grow based on your research. The downside, of course, is that investing doesn’t come with guarantees, and your stock’s value could decline even with thorough research.
💡 Recommended: 15 Technical Indicators for Stock Trading
5. Continue Building Your Portfolio
After you’ve decided what stocks to invest in, you generally want to continue building a portfolio that will help you meet your financial goals.
One way to bolster your portfolio is by buying mutual funds and ETFs rather than individual stocks. A benefit to investing in funds that hold stocks is that you can avoid some of the risks of being invested in individual stocks that may not perform well.
Whether investing in individual stocks or funds, you may want to consider the level of diversification in your portfolio that feels right for you. There is no consensus about the right way to diversify investments. For one person, ideal diversification could mean owning 20 stocks in different industries. For another, it could mean owning the “whole” market via a handful of mutual funds.
Once you get more comfortable investing in stocks and funds, you can employ numerous other investing strategies. You can add various securities, like bonds, commodities, and crypto, to your portfolio.
The Takeaway
Historically, investing in the stock market has been a way for some individuals to build personal wealth. These days, it’s never been easier for new investors considering getting into stocks to start. Whether you choose to work with a financial advisor or use an online broker or app, there are several ways to find a method that makes stock investing easy, fun, and potentially profitable. Of course, there are no guarantees, so it’s wise to take a step-by-step approach, start small if you prefer, do some research using the many resources available, and see what comes as you gain experience and confidence.
Investors can open an online investing account with SoFi Invest® to trade individual stocks, ETFs, or fractional shares with no commissions. Additionally, SoFi’s Automated Investing builds, manages, and rebalances portfolios with no SoFi management fee for those interested in investing in stocks through a more hands-off approach.
Start investing with your SoFi Invest account today.
FAQ
How do I invest $100?
You can invest $100 by opening an investing account that does not require a minimum account balance and purchasing shares of a stock or ETF that are less than $100. You can also use your funds to purchase fractional shares of whatever stocks you want to own.
How do I open a brokerage account?
You’ll need to take a few steps to open a brokerage account. First, you’ll need to find a broker that fits your needs. Once you’ve found a broker, you’ll need to complete an application and submit it to the broker. The broker will then review your application and, if approved, will open an account for you.
What is the S&P 500?
The Standard and Poor’s 500, commonly known as the S&P 500, is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ stock exchanges. It is one of the most commonly followed stock market indices in the United States, along with the Dow Jones Industrial Average and Nasdaq Composite.
SoFi Invest® INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
Stock Bits Stock Bits is a brand name of the fractional trading program offered by SoFi Securities LLC. When making a fractional trade, you are granting SoFi Securities discretion to determine the time and price of the trade. Fractional trades will be executed in our next trading window, which may be several hours or days after placing an order. The execution price may be higher or lower than it was at the time the order was placed. SOIN0622011
Pre-Qual, TPO, Lead Gen Tools; STRATMOR on Vendor Relationships; Disaster News; HECM, Ginnie, FHA News
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Pre-Qual, TPO, Lead Gen Tools; STRATMOR on Vendor Relationships; Disaster News; HECM, Ginnie, FHA News
By: Rob Chrisman
Wed, Feb 28 2024, 11:09 AM
At the TMBA’s Secondary Conference in Houston a topic is obviously interest rates and the economy… And the fact that the nation’s interest payment expense now exceeds our defense expense! It’s also a fact that Texas’ business climate is very friendly for companies. The #1 state in the nation for residential lending, California, not so much. Overheard here in the hallway: “California is a blue state wrapped up in red tape.” That said, permit process aside, California gets a lot of flak for its high cost of living, but that is for income tax rather than property tax, as exhibited in “Property Taxes by State in 2024” comparing home and vehicle taxes across the nation. Californians pay the 34th highest annual taxes on homes priced at state median value. New Jersey, Illinois, and Connecticut have the highest annual taxes on homes. Each year, the average American household spends $2,869 on real-estate property taxes plus another $448 for residents of the 26 states with vehicle property taxes. (Found here after 8:30AM ET, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Interview with SoFi’s Liz Young on the need for Treasury auctions and how supply and demand at those auctions impacts consumer interest rates.)
Lender and Broker Services, Products, and Software
“If you’re heading to ICE Experience, there’s never been a better time to catch up with the Optimal Blue team. Our PPE clients are actively upgrading to the Encompass Partner Connect integration and enjoying new features and benefits. On average, loan officers experience a 60% reduction in the time it takes to request a lock and see it auto-confirmed within Encompass through this upgraded integration. This means users can continue with disclosures and other loan-processing activities faster, which shortens turnaround times and increases efficiencies. If you’re an existing Optimal Blue client and interested in hearing about the other benefits of upgrading, or if you’d like to further discuss your business strategy, consider scheduling a meeting with the Optimal Blue team at our private poolside cabana. We will also be set up at the Optimal Blue booth throughout the event and ready to chat at your leisure. See you in Vegas!”
Compliance Experts Report on 2024 Mortgage Servicing Outlook! Watch the 30-minute webinar that recently launched with ACES’ EVP of Compliance, Amanda Phillips and Reid Herlihy of Ballard Spahr as they discuss the most recent mortgage servicing news, CFPB Supervisory Highlights, and expectations and predictions for 2024 and beyond. Watch the recording.
Guaranteed Rate has chosen Evocalize to enhance the digital marketing capabilities of its mortgage loan officers. Evocalize, renowned for powering leading mortgage and real estate industry tech platforms, is partnering with Guaranteed Rate to revolutionize lead generation and referral partner engagement. Through Evocalize, loan officers can execute targeted digital marketing campaigns across various platforms including Google, Facebook, Instagram, TikTok, Gmail, and YouTube instantaneously. This collaboration empowers loan officers to leverage local data for lead generation amidst changing regulatory landscapes. Evocalize will leverage real-time data and machine learning algorithms to optimize ad management. Guaranteed Rate anticipates significant benefits from this partnership, including enhanced lead generation, reduced marketing costs, and streamlined compliance efforts, ultimately improving the overall customer experience. Learn more here.
“Welcome to the new AFR Wholesale® (AFR)! Change can be good. Our team has been relentlessly pursuing better execution. This exercise has led to great program enhancements, operational improvements and of course, better pricing. Non-Delegated and Wholesale clients have commented on our aggressive pricing across all programs. Notably our new expanded note rate adjusters in conventional and government. We’ve also revised pricing for our Down Payment Assistance Program going into purchase season. AFR is dedicated to offering not only competitive rates but also a customer-centric approach, ensuring that you and your borrowers have the tools and options needed for a beneficial experience. Delegated Correspondents have also seen sharper pricing and incredible turn times (under 48 hours). Ensure you’re leveraging all AFR benefits by reaching out to our Account Executives, 1-800-375-6071, or explore our enhancements through our Quick Pricer tool. Not a client? Partner with AFR today!”
When Al Gore invented the internet, he envisioned a world where borrowers and Realtors could stand in a home, pull out their phones, and update pre-approval letters on demand. Make him proud and check out QuickQual by LenderLogix.
STRATMOR on Lender-Vendor Communication
We in the industry know that there is often a massive disconnect between mortgage lenders and their technology partners, so why isn’t “business relationship therapist” a thing? In STRATMOR Group’s February Insights Report, Senior Advisor Sue Woodard takes on the role of “therapist” to help both lenders and vendors unpack the key areas of disconnect. If you need guidance in breaking down these communication barriers, contact STRATMOR and don’t miss “Step into Our Office: Couples Therapy for Mortgage Lenders and Tech Vendors” for suggestions for both parties and to learn how STRATMOR is already working with technology providers to hear, understand and better respond to the needs of the lending community.
Disaster News
Given that 20-25 percent of the nation’s mortgages come from California, exposed to earthquakes, fires, and flooding, seeing a disaster declared there is worth noting for lenders and servicers alike. FEMA announced that federal disaster assistance has been made available to the state of California to supplement recovery efforts in the areas affected by severe storms and flooding, January 21-23, 2024. The President’s action makes federal funding available to affected individuals in San Diego County.
“Assistance can include grants for temporary housing and home repairs, low-interest loans to cover uninsured property losses and other programs to help individuals and business owners recover from the effects of the disaster. Federal funding is also available on a cost-sharing basis for hazard mitigation measures statewide. Individuals and business owners who sustained losses in the designated areas can begin applying for assistance by registering online at www.DisasterAssistance.gov, by calling 1-800-621-3362 or by using the FEMA App.”
But up in Washington we have wildfires: FEMA DR-4759-WA.
On 2/19/2024, with DR-4758, Release Number HQ-24-024, FEMA declared federal disaster aid with individual assistance has been made available to San Diego County California affected by severe storms and flooding from 1/21/2024 to 1/23/2024. See AmeriHome Mortgage Disaster Announcement 20240206-CL for inspection requirements.
On 2/15/2024, with DR-4759, Release Number HQ-25-025, FEMA declared federal disaster aid with individual assistance has been made available to a county affected by wildfires from 8/18/2023 to 8/25/2023. See AmeriHome Mortgage Disaster Announcement 20240208-CL for inspection requirements.
FHA, VA, Ginnie Mae, HECM, and USDA Developments
Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.53 trillion in January, including $28.1 billion of total MBS issuance, leading to $10.8 billion of net growth. January’s new MBS issuance supports financing for more than 91,000 households, including more than 46,000 first-time homebuyers. Approximately 77.6 percent of the January MBS issuance reflects new mortgages that support home purchases, because refinance activity remained low due to higher interest rates.
The January issuance includes $27.4 billion of Ginnie Mae II MBS and more than $674 million of Ginnie Mae I MBS, including nearly $558 million in loans for multifamily housing. For the 2024 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 46,000 first-time homebuyer loans. For more information on monthly MBS issuance, unpaid principal balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, visit Ginnie Mae Disclosure.
In USDA news, an Unnumbered Letter (UL) dated February 13, 2024, has been issued which increases the appraisal fee to $775 and the conditional commitment fee to $850 under the rural development direct programs. The fee increases are effective March 14, 2024. The increased fees reflect market research for origination appraisals in rural areas and incorporates the average cost of appraisals under the programs’ nationwide contract with the Appraisal Management Companies.
With the current market trends of rising interest rates, the Single-Family Housing Guaranteed Loan Program (SFHGLP) Rural Development announced a Stand-Alone MRA ratio waiver; to remove the 55 percent and 31 percent limitations from the requirements in the regulation for the Stand-Alone MRA.
FHA published Frequently Asked Questions, FHA (FAQs), that address inquiries received from stakeholders regarding its final rule, Changes in Branch Office Registration Requirements published in the Federal Register on February 2, 2024. This regulation eliminated the current requirement for lenders and mortgagees to register branch offices where they originate FHA Title I or Title II loans. This new rule, which becomes effective on March 4, 20 is not applicable for those institutions whose fiscal year ended on December 31, 2023, and are required to recertify by March 31, 2024. Recertification fees for those lenders will be calculated based on the number of registered branches as of the last business day of their fiscal year-end certification period. Refer to the rule and accompanying FHA INFO 2024-01 dated February 2, 2024, for information on the rule.
Effectively immediately, AmeriHome is removing the existing $100,000 maximum cash-to-borrower overlay on VA Cash-Out Refinance transactions, to align with VA guidelines. For additional information, see Product Announcement 20240207-CL.
Big news for the “Empire State” of New York! Plaza Home Mortgage excitedly shared that borrowers can now utilize a reverse mortgage for purchasing a home. This is a great option for “buying up” or keeping key cash liquidity vs paying all cash. Plus, FHA now allows borrower concessions up to 6% of the Principal Limit. So, what does that mean for your borrower? When discussing the HECM product, these interested party contributions [or concessions] may include REALTORS®, builders, developers, lenders, and others with an interest in the transaction. Now, interested parties may contribute up to 6% of the sales price toward the borrower’s origination fees, closing costs, prepaid items, and more.
Weary about adding reverse mortgages into your business plan? Although there are lower LTVs caused by the higher rates, keep in mind that the acceleration of equity often offsets all of that. While your senior borrowers may get 47 percent instead of 57 percent LTV, their house may have appreciated $150K or more. Contact Plaza Home Mortgage for more information.
Pennymac Announcement 24-07 provides updates to Government LLPAs effective for all Best-Efforts Commitments taken on or after Friday, February 09, 2024.
The Single-Family Housing Guaranteed Loan Program (SFHGLP) announced upcoming revisions to technical Handbook 1-3555, Chapter 12, Property and Appraisal Requirements. Changes are expected to be implemented on April 1, 2024. View USDA Rural Development Bulletin for more information.
Per Pennymac Announcement 24-13, Government LLPAs were updated, effective for all Best-Efforts Commitments taken on or after Friday, February 23, 2024, as follows: Improve values on the ‘Government FICO Price Adjustments’ LLPA Grid.
Capital Markets
There are competing narratives emerging around the strength of the U.S. economy. Weaker consumer spending of late calls into question whether the economy can avoid a recession, consumer confidence has fallen and remains shaky, economic activity pulled back in January as storms and cold weather disrupted day-to-day activity, and markets received a disappointing Durable Orders report yesterday. However, employment has remained resilient, homebuilder confidence has improved, and Treasury auctions this week have not indicated any sort of flight to quality. On balance, the data suggests that the economy should pick up as the weather improves.
Home prices continue to hold steady as demand greatly exceeds supply. The FHFA Housing Price Index rose 0.1 percent month-over-month in December after increasing a revised 0.4 percent in November, while the S&P Case-Shiller Home Price Index was up 6.1 percent in December after being up 5.4 percent in November. However, local markets are seeing some price easing. Supply and demand may be a greater determinant: Despite high rates, home prices rose 5.1 percent in January, year over year, and while still painfully low, inventory is up 3.1 percent year over year and new listings rose year over year for the fourth straight month.
Today’s economic calendar kicked off with mortgage applications from MBA decreasing 5.6 percent from one week earlier. Later today brings the second look at Q4 GDP and January advanced indicators: the goods trade deficit, retail inventories, and wholesale inventories. Three Fed speakers are currently scheduled: Atlanta President Bostic, Boston President Collins, and New York President Williams. We begin the day (an early travel day for me) with Agency MBS prices, the 10-year yielding 4.28 after closing yesterday at 4.32 percent, and the 2-year at 4.67.
Jobs and Transitions
Looking to expand in CA or NV? Licensing in both states is now taking nearly a year. Opportunity for immediate licensing in either or both states. New established small Mini-Corr/Broker shop located in Northern NV for sale. The operation was established by an industry veteran with two immediate family members. Some circumstances with the family have changed and the principal believes it would be better to continue forward becoming a part of a larger entity. The company is licensed in NV, CO, TX, FL, and CA; banking license should be completed within 6 – 8 weeks. If interested, please contact Chrisman LLC’s Anjelica Nixt to forward your note to the owner.
Movement is providing its loan officers, and the agents they work with, a unique way to highlight their impact. Powered by the company’s new proprietary sales and marketing tool MORE, every Movement LO and the agents they closed loans with in 2023 recently received a personalized “Highlight Reel,” featuring an email, web page, and social media content showcasing the work they did together last year and how that work impacted their respective communities. Movement has also released its annual Impact Report, which also looks back on the previous 12 months. Check out all the ways Movement helps its loan officers stand out with unique storytelling, content, technology, and yes, MORE, at MovementLO.com.
New American Funding is pleased to announce the addition of industry leader Mosi Gatling as SVP Strategic Growth and Expansion. Gatling is renowned for her expertise in serving previously underserved communities and her commitment to increasing Black homeownership in the U.S. and will help to reshape the industry’s approach towards minority communities and effect positive change across the mortgage industry.
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