Month: May 2024

Apache is functioning normally

Treasury securities are like the rock-solid foundation of the financial world. In essence, they are IOUs that the U.S. government offers to investors in order to borrow money. There are various types, each with unique characteristics, including Treasury bonds, bills, and notes.

Since they are seen as extremely safe investments, those seeking financial stability frequently choose them. Let’s examine Treasury securities in more detail and see why they are important.

What Are Treasury Securities?

In essence, Treasury securities are loans made by investors to the United States government. Treasury bonds, Treasury bills, and Treasury notes are the three primary varieties. Purchasing one of these securities is equivalent to making a fixed-term loan to the government that may last anywhere from a few days to thirty years.

The government agrees to reimburse you for your initial investment (the principal) plus interest in exchange. The Treasury yield, which is this interest rate, is used as a standard by which other interest rates in the economy are measured. Because they are backed by the full faith and credit of the United States government, Treasury securities are typically considered to be among the safest investments available.

What Are Treasury Bonds?

The United States government issues Treasury bonds, which are long-term debt instruments with maturities of ten years or longer. Purchasing a Treasury bond is akin to making a fixed-term loan to the government, typically for a duration of 20 or 30 years. In exchange, you get interest payments from the government every six months until the bond matures, at which time you are paid the bond’s whole face value.

Since the U.S. government backs Treasury bonds with its full faith and credit, they are among the safest investments available. Additionally, they are quite liquid, making it simple to buy and sell them on the open market. Investors looking for a dependable means of capital preservation and a consistent income source frequently utilize Treasury bonds.

Difference from US Savings Bonds

The U.S. government issues both Treasury bonds and U.S. Savings Bonds, but there are a few significant distinctions between the two.

U.S. Savings Bonds normally have shorter periods, typically between 20 and 30 years, while Treasury bonds typically have longer maturities, ranging from 10 to 30 years. Interest on Treasury bonds is paid semi-annually, whereas interest on U.S. Savings Bonds is paid monthly and compounded semi-annually.

Another difference is that U.S. Savings Bonds are offered at a discount to face value and earn a fixed rate of interest over time, whereas Treasury bonds are sold at face value and pay a fixed interest rate.

While U.S. Savings Bonds are frequently bought by individuals as a means of saving for short- or medium-term financial goals, such as retirement or schooling expenses, Treasury bonds are typically purchased by institutional investors and individuals seeking long-term investment possibilities. Both kinds of bonds are offered by the U.S. government and are low-risk investment options, but they have different uses and meet various demands from investors.

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What Are Treasury Notes?

The United States government issues medium-term debt securities called Treasury notes, which have maturities of two to ten years. Essentially, investors who buy Treasury notes are making a fixed-term loan to the government. Until the note matures and the investor obtains the full face value of the note, the government pays them interest every six months in exchange.

Since they are backed by the full faith and credit of the United States government, Treasury notes are thought to be less risky than many other investment options. Investors seeking a compromise between the short-term flexibility of Treasury bills and the long-term stability of Treasury bonds frequently choose them.

In addition to the ease of buying and selling on the open market, Treasury notes are extremely liquid, which makes them a preferred option for investors looking to combine flexibility and security in their investment portfolios.

The Significance of the 10-year Treasury Yield

In the financial world, the 10-year Treasury yield is very important since it is a key benchmark for other interest rates throughout the economy. The yield on a 10-year Treasury bond is the annual return that an investor can expect. As such, it reflects investor sentiment regarding future economic conditions, inflation expectations, and monetary policy outlook.

Variations in the yield on the 10-year Treasury note have the potential to impact not only corporate borrowing rates but also mortgage rates, vehicle loan rates, and consumer borrowing costs.

Additionally, it has an impact on the value of other financial assets since investors weigh their future returns against the comparatively safe yields of Treasury securities when valuing stocks and bonds. As a crucial indicator of general market mood and economic conditions, central banks and policymakers regularly monitor movements in the 10-year Treasury yield to assess the state of the economy and modify monetary policies accordingly.

What Are Treasury Bills?

The U.S. government issues Treasury bills, sometimes known as T-bills, which are short-term debt securities with maturities of one year or less.

In essence, investors who buy Treasury bills are making a short-term loan to the government. Treasury bills don’t pay interest on a regular basis like Treasury bonds and notes do. Rather, they are offered to investors at a price below face value, with the entire face amount due upon the bill’s maturity.

Since they are guaranteed by the full faith and credit of the United States government, Treasury bills tend to be considered some of the least-risky investments on the market. Because of their high liquidity and minimal risk, investors frequently utilize them as a short-term cash management tool or as a means of preserving capital.

Treasury notes are an essential part of the economy since they act as a base for a variety of financial transactions and as a benchmark for short-term interest rates.

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Who Should Invest in Treasury Securities?

Investors can benefit from investing in Treasury securities because of their consistent yields and low relative risk. Treasury securities are attractive to people who value capital preservation over large returns, particularly those who are approaching retirement or want to protect their resources. Treasury securities are a popular choice among conservative investors and those with low risk tolerance.

To comply with regulations and reduce risk, institutional investors like banks, insurance firms, and pension funds also set aside a percentage of their portfolio allocation for Treasury securities. Treasury securities are crucial components of diverse investment portfolios and a key part of any investor’s financial plan who is looking for a dependable and safe choice.

Pros and Cons of Treasury Investments

There are both benefits and downsides to Treasury Investments:

Benefits of Treasury Investments

•   Low Relative Risk: Because they are backed by the full faith and credit of the United States government, Treasury securities tend to be less risky than other investment types.

•   Guaranteed Yield: They give investors a steady source of income with a guaranteed rate of return – or, as close to a guarantee as an investor is likely going to find.

•   Treasury securities are highly liquid, which allows investors flexibility as they can be quickly bought and sold on the secondary market.

Drawbacks of Treasury Investments

•   Low Yield: Treasury securities usually have lower yields when compared to alternative investment options like equities or corporate bonds.

•   Interest Rate Risk: Interest rate fluctuations can have an impact on Treasury securities. The value of current Treasury securities may decline if interest rates rise.

•   Inflation Risk: Although Treasury securities are generally low risk, they might not yield enough returns in the long run to beat inflation, which might reduce one’s purchasing power.

•   Market Risk: While unlikely, there’s a chance that shifts in investor sentiment or market disruptions could have an impact on the price of Treasury securities.

How Can You Invest in Treasuries?

Individuals can invest in Treasuries with relative ease and accessibility. Investors can buy Treasury securities straight from the U.S. Department of Treasury via website, TreasuryDirect.gov.

Investors can also purchase them via a financial institution, bank, or broker. Mutual funds and exchange-traded funds (ETFs) that contain Treasury securities in their portfolios are another way for people to indirectly invest in Treasury securities.

Through TreasuryDirect.gov

Bonds, bills, and notes issued by the U.S. government can be directly purchased by individuals by using TreasuryDirect.gov. Without going via a broker or other financial middleman, investors can purchase, manage, and redeem Treasury securities using this online platform.

Treasury auctions, in which the public is offered newly issued securities, can be attended by investors via TreasuryDirect.gov. Investors can enter these auctions with competitive or non-competitive bids to buy Treasury securities at fixed yields or interest rates.

Non-competitive bids accept the yield that is decided by the auction, whereas competitive bids indicate the desired yield. Investors can interact directly with the U.S. Treasury Department to purchase Treasury assets through an open and easily accessible process, giving them more power over their financial choices.

Through a Broker or Bank

An additional way for investors to obtain these assets is by buying Treasury securities through a bank or broker. Treasury securities can be purchased and held alongside other financial products by investors through the investment services provided by numerous banks and brokerage firms. Financial experts can assist in customizing investing plans to meet the specific needs and objectives of each investor.

Purchasing through a bank or broker may provide access to a greater selection of investment options, including Treasury bills, notes, and bonds with different maturities and yields. Although there can be commissions or transaction costs associated with this approach, investors benefit from the ease of having all of their investment accounts combined into one location.

Purchasing Treasury securities via a bank or broker provides investors with ease, flexibility, and individualized assistance in creating a diverse investment portfolio.

ETFs and Mutual Funds

Investors can buy Treasury Securities in a convenient way through ETFs and mutual funds that hold bonds, bills, and notes. Investors can benefit from professional management and experience choosing and overseeing Treasury securities within the fund’s portfolio by making an investment in these funds.

Mutual funds and ETFs provide liquidity, enabling investors to buy and sell shares on the open market at any time. Investors can easily modify their exposure to Treasury securities in response to shifting market conditions or investing goals.

Mutual funds and ETFs often have lower expense ratios than actively managed funds, so investing in Treasury securities using this method can be an affordable way to access a diverse portfolio of Treasury securities.

💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.

How Are Treasury Bonds, Bill, and Notes Taxed?

Since they are subject to unique tax laws, investors looking for tax-efficient investment options may find Treasury bonds, bills, and notes appealing. State and local income taxes are not applicable to interest income collected on Treasury securities, but it is subject to federal income tax.

Taxation applies to any capital gains upon the selling of Treasury securities. An investor will have a capital gain that is liable to capital gains tax if they sell a Treasury asset for more money than they paid for it.

On the other hand, the investor can experience a capital loss if they sell the investment for less than what they paid for it. This loss can be applied to offset capital gains and lower their taxable income.

What Are Other Types of Treasury Securities?

The U.S. Treasury offers a variety of securities in addition to Treasury bonds, bills, and notes. By basing the principal value of Treasury Inflation-Protected Securities (TIPS) on fluctuations in the Consumer Price Index (CPI), TIPS offer protection against inflation.

By guaranteeing a rate of return, this helps investors maintain their purchasing power over time. Investors are protected against interest rate risk by Floating Rate Notes (FRNs), which have variable interest rates that fluctuate based on changes in market interest rates.

The U.S. Treasury issues savings bonds such as Series I and Series EE that provide people with a convenient and secure long-term means of saving money. Series EE Savings Bonds pay a set rate of interest for a maximum of 30 years, while Series I Savings Bonds protect against inflation.

The Takeaway

Treasury securities give investors a range of choices to achieve their financial objectives, including long-term savings, inflation protection, and income generation. In the ever-changing world of financial markets, investors can protect capital, reduce risk, and reach their goals through Treasury bonds, bills, notes, and other securities like TIPS and savings bonds.

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For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What is the meaning of Treasury Security?

The U.S. Department of the Treasury issues debt obligations known as Treasury securities, which include Treasury bills, notes, and bonds. Because they are backed by the full faith and credit of the United States government, Treasury securities are among the safest investments.

What is an example of Treasury securities?

Treasury Bills, Treasury Notes, Treasury Bonds, Treasury Inflation-Protected Securities (TIPS), and Floating Rate Notes (FRNs) are the five categories of marketable securities offered by the U.S. Treasury.

Are Treasury securities risky?

Because the U.S. government completely backs Treasury bonds, there is very little chance that they would default, making them a popular choice for investors looking to avoid risk. Investors need to be aware that interest rate risk exists even with U.S. government bonds.

Photo credit: iStock/Andrii Yalanskyi

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Now, Qatar Airways Privilege Club members can earn Avios without flying and also snag a fast track to elite status, thanks to the release of two new credit cards, issued by Cardless, a fintech company.

  • The Qatar Airways Privilege Club Visa Infinite Credit Card.

  • The Qatar Airways Privilege Club Visa Signature Credit Card.

Applications for the cards go live on May 7, 2024. Here’s what to expect.

How the new Qatar Airways credit cards stack up

Qatar Airways Privilege Club Visa Infinite Credit Card

Qatar Airways Privilege Club Visa Signature Credit Card

Annual fee

Sign-up bonus

Earn 50,000 Avios, including 25,000 Avios after the first transaction and 25,000 Avios after spending $5,000 in the first 90 days.

Earn 40,000 Avios, including 20,000 Avios after the first transaction and 20,000 Avios after spending $3,000 in the first 90 days.

Loyalty program points

  • Earn 150 Qpoints after spending $5,000 in the first 90 days.

  • Earn 2 Qpoints for every $1,500 spent on qualifying purchases.

Earn 2 Qpoints for every $2,000 spent on qualifying purchases.

Earnings rates

  • 5 Avios per $1 spent on Qatar Airways.

  • 3 Avios per $1 spent at restaurants.

  • 1 Avios per $1 spent on all other qualifying purchases.

  • 4 Avios per $1 spent on Qatar Airways.

  • 2 Avios per $1 spent at restaurants.

  • 1 Avios per $1 spent on all other qualifying purchases.

Other perks

  • One year of Gold elite status with the Qatar Airways Privilege Club.

  • One year of Silver elite status with the Qatar Airways Privilege Club.

🤓Nerdy Tip

Prospective card applicants were able to join a waitlist in mid-April. If you joined that waitlist and apply within 30 days of the card applications going live, you’ll be eligible for an additional 5,000 bonus Avios on the Qatar Airways Privilege Club Visa Signature Credit Card or 10,000 bonus Avios on the Qatar Airways Privilege Club Visa Infinite Credit Card. These are in addition to the sign-up bonuses available to all applicants.

Elite status and benefits

The one year of automatic elite status with each card has no spending requirement. Additional Qpoints earned by spending on the card can help members qualify for status in subsequent years.

Benefits of the Gold status earned with the Qatar Airways Privilege Club Visa Infinite Credit Card include a 75% tier bonus on earning Avios with eligible flights; priority check-in and boarding; complimentary lounge access and four guest lounge passes every year; a free extra baggage allowance; and complimentary preferred seat selection. Gold elite members will also receive all the benefits of Oneworld Sapphire tier elite status and collect Avios while flying on Oneworld member airlines.

Benefits of the Silver status earned with the Qatar Airways Privilege Club Visa Signature Credit Card include a 25% tier bonus on earning Avios with eligible flights; priority check-in and boarding; complimentary lounge access and two guest lounge passes every year; an extra baggage allowance; and 20% savings on preferred seat selection. Silver elite members will also receive all the benefits of Oneworld Ruby tier elite status and collect Avios while flying on Oneworld member airlines.

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The power of Avios

Avios points earned on these cards can be redeemed for flights with Qatar Airways, but also Oneworld Alliance airlines such as Alaska Airlines and British Airways, as well as partner airlines, including JetBlue Airways. The rewards can also be transferred to other Avios-based rewards programs, such as British Airways and Iberia Airlines. That transfer ability and access to partner airlines make Avios extremely valuable for optimizers who don’t mind learning how to maximize the value of their rewards.

Should you get a Qatar Airways card?

Unless you’re a frequent flyer with Qatar Airways and you really value elite status, there are easier and more flexible ways to earn Avios. For example, the Chase Sapphire Preferred® Card earns Chase Ultimate Rewards® that can be transferred to a variety of Avios-based rewards programs, including the British Airways Executive Club, Aer Lingus AerClub and Iberia Plus. These programs all give you access to the Oneworld Alliance award chart, including Qatar Airways. New cardholders can also qualify for a bigger introductory offer: Earn 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s over $900 when you redeem through Chase Travel℠.

Source: nerdwallet.com

Apache is functioning normally

Catie Skelton and her brother Tim, owners of Elements Wallcoverings, of Orlando, say an installation can only be as good as the prep work underneath. (Courtesy Marni Jameson)

Wallpaper has made a major comeback.

I recently got the bug to refresh and update my dining room, whose furniture dates back to the 1990s. So, I asked Los Angeles designer Christopher Grubb to consult. That is, I would send him photos. He’d provide decorating direction. I’d do the legwork. This arrangement saved us both hours of indigestion.

Technically, it’s an alcove located directly off the entryway, but because it’s the first room you see when you come in the front door, I want it to shine. Grubb gave me a to-do list: add a pair of long mirrors, put black lampshades on the chandelier and wallpaper the back feature wall and the ceiling with a rich, medium-blue grasscloth to distinguish the dining area from the entry.

I requested six wallpaper samples, lived with them for a few days, chose one and hired my handyman to prepare the wall and ceiling, filling in the textured surfaces to make them smooth.

Orlando wallpaper installer Catie Skelton, who runs Element Wallcoverings with her brother Tim said, “Wallpaper used to be just for high-end homes. But now, thanks to social media and more brand competition, it’s accessible to the middle class. Plus, customers are realizing that wallpaper doesn’t have to have little flowers and strawberries. You can choose from thousands of bold patterns, textures and contemporary prints.”

Indeed. Even my daughter and her husband, on-trend millennials, recently hung wallpaper in the nursery they are preparing for their baby, due next month(!).

“We looked at a lot of inspiration photos,” my daughter said. “Almost all the nurseries had accent walls either painted a fun color or wallpapered.” They chose a peel-and-stick paper featuring soft illustrations of woodland creatures, which my son-in-law put up himself.

Peel-and-stick wallcovering, such as this Gunnison wallpaper from Loomwell, offers an easy, affordable way to decorate this nursery.(Courtesy Marni Jameson) 

Though more expensive than paint and more work, when it’s done right, adding wallpaper to a room adds richness and interest that paint alone simply can’t. “Updating a room with a paint color is an easy change,” Grubb said, “but if you truly want to elevate a room, wallcovering is the way to go.”

The wallpaper went up this weekend. It’s a lovely improvement. So now that I am up with the times, I asked Grubb and the Skeltons to tell me more about the wallpaper comeback and what more homeowners should know:

Be unexpected. Wallpaper isn’t just for living rooms and powder baths. For one Los Angeles couple, Grubb covered the laundry room walls with a lively graphic paper. “It completely changed the feeling of this utility space.”

Float don’t line. Many homes have textured walls, which prevent wallpaper from being smooth, so Tim Skelton recommends “floating” the walls: skim coat them with drywall mud to fill in the recesses.

Don’t skimp on installation. If your paper has a tricky repeat that needs special alignment or your room has lots of angles, hire a pro to install it, Grubb said, and get more than one bid: “I’ve had clients try to save money by hiring someone inexperienced or by doing the job themselves, and they ran into alignment issues that got more attention than the beauty of the material.”

Consider the new vinyl. Today’s vinyl wallpaper often looks like grasscloth or silk, but is a lot less fragile, more durable and easy to clean with soap and water.

Enjoy the sound effects. Wallpaper will dampen outside noises a bit, but wallcoverings made of linen, silk, cotton or grasscloth are especially good at buffering sounds, so they’re good choices for home offices and bedrooms.

https://extras.mercurynews.com/events/.

Source: mercurynews.com

Apache is functioning normally

Known for its iconic Gateway Arch and passionate professional sports fandom, St. Louis is like nowhere else in the U.S. From brewing icons to massive parks and niche museums, there’s something for everyone to feel right at home in St. Louis. 

Whether you’re exploring the sites of the 1904 Summer Olympics or catching a game at Busch Stadium, there’s never a dull moment in the city.

Let’s take a few minutes to explore ten of the top attractions in the Gateway to the West and learn why so many people are looking to find a place in St. Louis.

1. Gateway Arch

The Gateway Arch is a true architectural feat. Beyond that, it’s a symbol of St. Louis’s role as the “Gateway to the West.” Standing at 630 feet, it is the tallest man-made monument in the United States. Visitors can ride to the top of this stainless steel marvel for a stunning view of the city and the Mississippi River. The Arch isn’t only a sight to behold from afar but also has an interactive museum that details the area’s fascinating history.

2. Anheuser-Busch

Anheuser-Busch has been a cornerstone of St. Louis since its establishment in 1852. This brewery is famous for producing America’s best-selling beer, Budweiser, and its role in the ongoing craft beer movement in the U.S. Tours of the brewery are popular, giving visitors a peek into the brewery’s massive operations and ending with samples of their iconic beverages.

3. Cardinals

Thanks to the St. Louis Cardinals, baseball is almost synonymous with St. Louis. As one of the most successful teams in Major League Baseball, the Cardinals have a fiercely loyal fan base. Watching a game at Busch Stadium is definitely a must-do in St. Louis.

4. National Blues Museum

The National Blues Museum celebrates St. Louis’s profound impact on blues music. This museum showcases the history of the blues and its influence on modern music. It’s a hotspot for music lovers and historians alike, providing deep insights into the sounds that shaped America.

5. Forest Park

Forest Park is one of the largest urban parks in the United States, larger than Central Park in New York City. Forest Park is home to many of St. Louis’s major attractions, including the Art Museum, the Science Center, and the Zoo. With its picturesque landscapes and manicured walking paths, Forest Park is where you’ll find a lot of locals on a sunny day in St. Louis.

6. Home of the 1904 Summer Olympics

St. Louis made history by hosting the 1904 Summer Olympics, the first ever held in the United States. This event was held at Washington University and significantly impacted the city’s development and global reputation. 

7. Missouri Botanical Garden

The Missouri Botanical Garden is an oasis covering 79 acres. The garden is renowned for its pioneering research in plant science. It has a geodesic dome called the Climatron as well as Japanese and Chinese gardens. The garden is a tranquil escape and a center for botanical research and conservation.

8. St. Louis Science Center

The St. Louis Science Center is one of the few free nonprofit science museums in the country. It covers everything from technology and engineering to biology and astronomy. The Science Center bridges the gap between fun and learning, making science accessible to all ages.

9. Old Courthouse

The Old Courthouse in St. Louis is the site of the pivotal Dred Scott case in 1857. The beautifully restored building is now a museum that provides a rare look into this storied past and the events that shaped civil rights in America.

10. Soulard Market

Soulard Market is the oldest farmer’s market west of the Mississippi River and remains a focal point of life in St. Louis. With vendors selling everything from fresh produce to exotic spices, and local meats to artisanal cheeses, the market encapsulates the community spirit of St. Louis.

Apache is functioning normally

Counterintuitive Rally And Asymmetric Risk

By:
Matthew Graham

Thu, May 2 2024, 4:26 PM

Counterintuitive Rally And Asymmetric Risk

Bonds began the day in slightly stronger territory and managed to hold the gains after the early economic data which consisted of unfriendly readings in Challenger layoffs, Jobless Claims, and Q1 Unit Labor Costs.  All three spoke to ongoing labor market strength with the latter adding some inflationary fuel to the fire.  But the bond market is apparently tired of reacting to the alarming data from Q1 and March.  Instead, the perfect adherence to previously established technical levels (4.64 and 4.57 in terms of the 10yr) suggests intraday volatility was a factor of positioning and short-covering ahead of Friday’s jobs report.  There is some asymmetric risk potential on Friday considering how unfazed bonds seem to be by yet another unfriendly report (with the implication being a greater willingness to chase the bid on a downbeat jobs number). Just remember, the previous sentence tells us nothing about the direction of trading–only probable magnitude.

    • Jobless Claims
      • 208k vs 212k f’cast, 208k prev
    • Continued Claims
      • 1774k vs 1800k f’cast, 1774k prev

08:34 AM

10yr up from 4.592 overnight lows to 4.621 (still down 1.3bps on the day).  MBS are still up an eighth of a point, but down 2 ticks (.06) from the highs.

12:37 PM

Some weakness into the 9am hour, but now at the best levels of the day.  10yr down 4bps at 4.593.  MBS up just over a quarter point.

03:18 PM

Flat at best levels.  MBS up nearly 3/8ths and 10yr down 5.6bps at 4.578

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

Apache is functioning normally

My model for inventory growth with higher mortgage rates came crashing down last week. After two weeks of significant increases, inventory growth slowed dramatically and is far from my 11,000-17,000 growth model with mortgage rates over 7.25%. Did the recent dip in mortgage rates play a role here or is this the average choppy weekly data we have seen in past years?  Let’s delve into the weekly data to see what we can uncover.

Weekly housing inventory data

I was looking for a hat trick this week after higher mortgage rates fueled more inventory growth, but that stalled out last week. It’s important to note that the weekly data can be volatile, so I won’t overreact to one week of slow inventory growth data, but it was disappointing to see just 3,453 homes added. Last year, during this same timeframe, inventory fell week to week as well, so always remember that a trend is more important than one week’s data. Note that we do have Mother’s Day weekend next week.

  • Weekly inventory change (April 26-May 3): Inventory rose from 556,291 to 559,744
  • The same week last year (April 28-May 5): Inventory fell from 421,924 to 420,489
  • The all-time inventory bottom was in 2022 at 240,194
  • The inventory peak for 2023 was 569,898
  • For some context, active listings for this week in 2015 were 1,081,867

New listings data

New listing data has been a positive story all year, as we have seen consistent growth from 2023 levels, which saw the lowest recorded levels of new listings ever. I wish new listings were growing faster, but I will call it a victory nonetheless. We saw a slight decline in new listings data week to week. For now, I will chalk this up to the seasonal choppiness we sometimes see with inventory data. Here’s the new listings data for last week over the last several years:

  • 2024: 70,954
  • 2023: 57,682
  • 2022: 76,095

Price-cut percentage

In an average year, one-third of all homes take a price cut — this is standard housing activity. When mortgage rates increase, demand falls and the price-cut percentage grows. When rates drop and demand improves, the percentage falls.

The price-cut percentage growth in 2024 is much slower than in 2022, when rates spiked more aggressively. The second half of 2022 had the biggest and fastest decline in home sales ever, and after November of 2022, the epic home sales crash stopped. This can explain why the slope of the price-cut curve was faster and stronger in 2022 than in 2023 or so far in 2024.  

  • 2024: 33%
  • 2023: 29%
  • 2022: 20%

10-year yield and mortgage rates

We had an exciting week with the 10-year yield and mortgage rates. The Federal Reserve tried to maintain a balanced stance on when the next rate cut would happen, which I talked about in this HousingWire Daily podcast.

Then, the 10-year yield fell after the jobs report showed that wage growth slowed. I wrote about the wage growth slowdown and how that ties into the Fed’s model in my analysis of the jobs report. Looking at all of these factors — the Fed meeting points, the softness in job openings and the jobs Friday data — can explain the decline in yields and mortgage rates last week.

Mortgage spreads have been terrible for some time now, but 2024 is far from the peak stress we saw in this data line in 2023. If we were at the same level as the worst spreads in 2023, mortgage rates would be 0.52% higher currently. So, the spreads getting better this year is a positive storyline. I hadn’t anticipated we would see this until the Fed starts cutting rates, so I got this wrong in 2024.

Purchase application data

Purchase application data didn’t move much again last week, down 2% week to week and 14% year ove year. Remember, for any growth we see in this data line in the future, context is critical since we’re working from the lowest levels ever. 

Since November 2023, when mortgage rates started to fall, we have had 11 positive prints versus nine negative prints and two flat prints week-to-week. Year to date, we have had five positive prints, nine negative prints, and two flat prints.

The week ahead: Bond market digestion 

This week we have a light week on the economic front with jobless claims data, used car prices and some Fed presidents talking. I will be watching the 10-year yield closely. Whenever you have jobs week combined with a Fed meeting, the bond market action can act wild, so I am interested to see how the market reacts after digesting what happened last week.

Source: housingwire.com

Apache is functioning normally

With the Federal Reserve meeting again this week, many homebuyers are wondering about the future of mortgage interest rates.

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All eyes will once again turn to the Federal Reserve this week as they meet to discuss the next steps with interest rates and economic policy. Specifically, will they raise rates above their current 23-year high? Or will they keep them steady following a series of disappointing inflation reports at the start of 2024? After all, rate cuts that seemed promising at the beginning of the year now seem off the table, possibly for the rest of the year. 

And while the Fed doesn’t directly dictate rates for loans like mortgages, personal loans and other borrowing products, what they ultimately decide will greatly affect what rate lenders are willing to offer. Homebuyers will then follow this week’s meeting carefully. After coping with the highest mortgage rates since 2000, buyers are looking for relief — or signs of rate relief to come. 

To that point, many are wondering if mortgage rates will rise after this week’s Fed meeting. That’s what we will break down below.

See what mortgage rate you could lock in before a potential increase here now.

Will mortgage rates rise after this week’s Fed meeting?

While no one knows with certainty what will happen after the Fed meeting, set for April 30 and May 1, the chances of a rate cut are minimal. Thanks to sticky inflation and a target inflation rate goal of 2%, more work must be done (the current inflation rate is 3.5%). So rate cuts look out for this week. While a rate hike is possible, it’s also unlikely to happen until more data about the fight against inflation becomes available. 

With those scenarios accounted for, then, it’s likely that the Fed will keep its benchmark interest rate unchanged at a range between 5.25% and 5.50%. But what will that mean for mortgage rates? 

It won’t be particularly positive. While a rate pause is better than a rate hike, even a hint at an extended pause — or the potential for rate hikes in the months to come — could cause mortgage rates to rise in anticipation. So what Fed chairman Jerome Powell says this week will go a long way toward cooling rates — or making them rise further. However, if homebuyers were hoping for a rate cut, as some were predicting at the end of 2023, that’s not likely to happen, at least for now.

See what mortgage rate you could secure before the Fed announces its rate decision.

How to get a lower mortgage rate now

While the sub-3% mortgage rates of 2020 are unlikely to return anytime soon (or ever again), that doesn’t mean homebuyers still can’t get a lower mortgage rate now. It will just require a bit more work and strategic planning. Here are three ways buyers can get a lower mortgage rate now:

  • Buy mortgage points: Mortgage points can potentially help you secure a rate half a percentage point or lower than average. By paying points (or a fee) to a lender at closing (or by having it rolled into your overall mortgage loan), you can potentially save hundreds of dollars each month with a lower rate. That said, the amount of points you can typically buy will be limited and will vary from lender to lender. 
  • Get an adjustable-rate mortgage: An adjustable-rate mortgage (ARM) works as it sounds. It’s a mortgage in which the rate will adjust over time, typically starting at a below-average rate before rising after a predetermined period has concluded. That said, it’s important to crunch the savings here before acting because when the rate does adjust, it could become costly for many buyers. 
  • Shop around: While you’re unlikely to find one mortgage lender that offers a rate a full point lower than another, you can, potentially, find one that offers a slightly lower rate than others. And in today’s rate climate, every basis point counts. So shop around for lenders to find one offering the best rates and terms (and be sure to compare fees and closing costs, too, to ensure that the lower rate won’t be canceled out by fees paid elsewhere).

The bottom line

The strong potential for mortgage rates to rise again this week, even if the Fed keeps rates unchanged, could be a motivating factor for buyers to lock in a rate now. That said, there are still effective ways to get a below-average rate, ranging from buying mortgage points to adjustable-rate mortgages to simply shopping around for the best rates and terms. None of these strategies will bring back the record-low mortgage rates of recent years, but they are all worth carefully considering until the Fed finally starts cutting rates again. 

Matt Richardson

Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.

Source: cbsnews.com

Apache is functioning normally

NEXA Mortgage has sued its former president, Mat Grella, for allegedly causing the failure of a hangar-office property purchase, acting to defame the firm and his partner Mike Kortas, illegally changing corporate documents, and keeping two company cars after his termination. In response, Grella said that the allegations are a “manipulation of the truth.”

The lawsuit was filed April 29 in the Arizona Superior Court of Maricopa County. It accuses Grella and his wife, Sheridan Murray-Grella, of breaching contractual and fiduciary duties, tortious interference with business expectancies, actual fraud and defamation by false light, among other claims. 

NEXA was founded in Arizona in 2017 by Kortas and Grella after they left Equity Prime Mortgage. The firm became the largest U.S. mortgage brokerage firm, with 2,477 licensed loan officers and 236 active branches as of Monday, per the Nationwide Multistate Licensing System (NMLS).

Grella was terminated from NEXA in March amid negotiations of a buyout and a lawsuit accusing Kortas of making aircraft-related purchases with company money without his consent. Kortas denies his former partner’s allegations.

The lawsuit filed by NEXA against Grella states that in March 2024, NEXA entered into a letter of intent to purchase a five-acre airplane hangar leasehold in Mesa, Arizona, for $23.95 million. The leasehold included 75,000 square feet of existing hangar and office space.

According to NEXA, the purchase would allow the company to have a “physical home base“ — which it’s currently lacking — where it could host events and save $500,000 a year on other venues. It would also consolidate company aircraft into one space and potentially increase income through renting aircraft space to others. 

​​NEXA leases aircraft hangar space, and it owns and operates a charter company, which generates revenue from charter flights and offers tax advantages for aircraft ownership, per the lawsuit. The company said that Grella was fully informed and had authorized these moves. 

According to the lawsuit, Grella sent messages to the hangar’s broker, seller and title company that were “disparaging, knowingly untrue,“ stating that NEXA was not authorized to purchase the property. This caused the transaction to fail and harmed the company, NEXA alleges. 

Grella told HousingWire that the purchase “doesn’t fit the needs of NEXA“ as the brokerage firm focuses on mortgages. Grella added that NEXA “started growing exponentially as a remote company,“ meaning it does not need an office space. Also, he had not acknowledged or consented to the transaction that he believed would “almost entirely deplete the firm’s cash account.“

In a message to HousingWire, James Brody, a senior partner at Garris Horn LLP and attorney for NEXA, said that it’s important to ask “whether there could have been concern that monies might get tied up that would potentially affect monies available for the buyout, which in my opinion was the true catalyst for the disputes at issue.“ 

Still, “at the end of the day, we are hopeful that the parties can find a way to amicably resolve these disputes,“ Brody said.

Other allegations

The NEXA complaint also discusses the brokerage firm’s ownership structure. NEXA’s lawsuit states that, per the company’s operating agreement signed in 2019, Kortas is its sole manager, with a 50.5% ownership stake, followed by Grella’s 49.5% stake. 

But on March 22, Grella reportedly submitted documents to the Arizona Corporation Commission stating that he was NEXA’s “new manager,“ including only his signature. NEXA, which attached the document to the lawsuit, said Grella “attempted to usurp the manager’s powers.“  

Grella, in his complaint against Kortas, said his partner converted NEXA funds and made unauthorized credit card purchases, which have reduced Kortas’ ownership percentage to below that of Grella’s, such that Grella is “now the majority owner of Nexa.“ In addition, the complaint states that he added his name as co-manager and did not change Kortas’ manager status from the documents. 

Brody said a change of manager or the addition of a co-manager would have required a vote of members, and since there was no such vote, “it’s difficult to understand how any such filing by Grella with the Arizona Corp. Commission was not done improperly.“

The company’s lawsuit states that, “On account of Grella’s actions in causing harm to the company and his impending buyout, he was terminated from the employment of NEXA.“   

According to the NEXA complaint, Grella required documents after his termination that only employees could access. He also “contacted different states’ licensing departments with claims that NEXA is operating without a qualified individual for mortgage license,“ which the company said is untrue. 

Grella said he contacted NEXA employees and state regulatory agencies to update his status as a former employee, since NEXA had not updated it by March 23. He has “never harmed or sought to harm NEXA, and hopes to see the company run effectively in the near future, for the sake of all of NEXA’s stakeholders.“

Brody said NEXA did not terminate the relationships in NMLS regarding Grella’s ownership, which would have been improper, as “many states require the registration of owners in the NMLS, even if they are not employees.“

NEXA is also accusing Grella of selling a Cadillac Escalade in 2022 without authorization. The company bought the car in 2019 for $76,500 as an exclusive benefit to the owners while they were company employees. But “Grella kept or otherwise diverted the funds received for the trade,“ the lawsuit states. The company also seeks the return of a 2019 Nissan GT-R bought for company purposes for $104,490.50. 

Grella said the company’s vehicles were kept at the partners’ residences, with Kortas having two other company cars. Early in the buyout negotiations, however, the partners agreed to keep the vehicles in their possession. “Kortas was to keep the Maserati and the Range Rover, and I, the Escalade and the Nissan GTR. I remain an owner of approximately half of NEXA and its assets,“ Grella said.

According to Brody, the company understands that the vehicles were intended for use during the partners’ tenures as NEXA employees, which was the case for Grella early in the buyout negotiations. 

In the lawsuit, NEXA asks, among other things, for an injunction against Grella, ordering that he cease any further public statements about NEXA or Kortas. 

Source: housingwire.com