Market Movements, Mortgage Updates, and Critical Condo Insights

Market Movements, Mortgage Updates, and Critical Condo Insights
Happy Friday!
Our hearts go out to the countless individuals impacted by the fires in Los Angeles. The devastation is heartbreaking, but we’re incredibly grateful that conditions have improved and the brave firefighters have made significant progress in containing the blaze. As the rebuilding phase begins, our thoughts remain with those affected.
This morning, we open with some good news: the 30-year mortgage rate sits at 7.07%, down from last week’s 7.15%. This reprieve is especially welcome after rates briefly climbed above 7.25% earlier this week. The action-packed week in data played a crucial role in driving rates lower, and today, we’ll explore what made the difference.
What Moved Rates This Week
1. Producer Price Index (PPI):
Wholesale prices rose 0.2% in December, lower than the expected 0.4% increase. This cooling in pipeline inflation pressures was a reassuring sign for markets.
2. Consumer Price Index (CPI):
Core inflation grew just 0.2% on the month, bringing the annualized rate to 3.2%, slightly below expectations. Headline inflation also aligned with forecasts, which helped ease fears of a re-acceleration in inflation.
3. Retail Sales:
December’s retail sales data pointed to a resilient economy, with core retail sales rising 0.7%, exceeding expectations. Strong holiday spending helped push Q4 GDP growth estimates higher, signaling continued consumer confidence.
Treasury yields responded accordingly, with the 10-year yield dropping to 4.65% after touching a 14-month high earlier in the week. This pullback was pivotal in allowing mortgage rates to edge lower.
Important Condo Insurance Insights
Switching gears, let’s talk about something we’re seeing more often in Southern California’s condo market: insurance coverage shortfalls.
In the past two weeks, we’ve encountered two condo complexes where the master insurance policy provided coverage well below the replacement value for wildfire damage. This posed significant challenges, making the complexes temporarily unwarrantable.
Fortunately, we were able to identify solutions that allowed us to move forward. However, with the current state of insurance in California, we strongly recommend reviewing master insurance policies early in the process. Discuss this with your lender to avoid surprises that could derail your transaction.
As always, we’re here to support you. Let’s make it a great Friday and an even better weekend!
thebibelteam.com
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