Rocket Fuel Newsletter – 10/07/2024
Earth has a second moon... temporarily.
A new “mini moon,” about the size of a school bus, will orbit our planet from September 29 to the end of November. This asteroid, drifting through space, was captured by Earth's gravitational pull. While it’s an exciting event, this mini moon is too small to be seen with the naked eye – you’ll need a research-grade telescope to catch a glimpse of it.
This week's edition features two surprisingly strong employment reports, an exciting new release from Rocket, and a deep dive into housing affordability.
Fuel Up 🚀
Unexpected job opening increase in August
Job openings in the U.S. increased to 8 million in August, signaling a healthy labor market. The rise was driven in part by more openings in the construction sector. However, the number of people quitting their jobs dropped to its lowest level since August 2020, suggesting that some may be hesitant about finding new employment opportunities.
Private payrolls grow in September
In addition to the better-than-expected job openings report, private payrolls came in above expectations and grew by 143,000 jobs in September. Hospitality and construction led the way, increasing by 34,000 and 26,000 respectively.
Read the full report here.
Rocket Release with Mike Fawaz
Give your clients the gift of financial relief during the holidays. In this video, Fawaz explains how you can help your clients lower their interest rates and access cash quickly for home improvements or debt consolidation with a Home Equity Loan.1 Watch now to discover how you can support your clients and grow your business this holiday season.
When prospective buyers begin searching for a new home, one of their first questions is often, “How much can I afford?”
Experts generally agree that housing costs should be kept between 25% and 36% of a household's pre-tax income, depending on any existing debt. Additionally, there are various calculations used to assess housing affordability on a national level.
The three main variables in the affordability equation are:
- Income
- Home price
- Mortgage rate
Data from the Federal Reserve Bank of St. Louis shows that incomes have been steadily increasing since 2020, while the median sale price of homes has either plateaued or declined slightly since peaking in early 2023. Additionally, mortgage rates have significantly decreased since their peak about a year ago. This combination of rising incomes, lower home prices and reduced mortgage rates means that housing is becoming more affordable for the average American.
Median Household Income
Median Sales Price Of Houses Sold
30-Year Fixed-Rate Mortgage Average
Source: Federal Reserve Bank of St. Louis
Each month, the National Association of REALTORS publishes the Housing Affordability Index (HAI), which measures household income against home prices. An HAI of 100 means that a household earning the national median income can just qualify for a mortgage on a median-priced home with a 20% down payment. An index above 100 indicates that a median-income family has more than enough income to qualify for a mortgage on a median-priced home, while a number below 100 means they do not earn enough.
The HAI uses a 25% qualifying ratio for monthly housing costs to gross monthly income.
As shown below, the preliminary July index shows a slight bump up to 95.0 from a revised 93.3 in June. While housing is becoming slightly more affordable, the index indicates that the average household is not making enough money to qualify for an average house.
However, when examining regional data, we find that housing is quite affordable in the Midwest, while affordability issues in the Northeast and especially the West significantly lower the overall index.
Source: National Association of Realtors
With recent cuts to the Federal Funds Rate, many expect to see mortgage fall. Lower mortgage rates could lead to an increase in mortgage applications, which in turn could put upward pressure on home prices. While this is just speculation, one thing is certain – changes are in motion.
Did you tune in to IGNITE Live on September 30? Fawaz shared updates on our new Welcome Home RateBreak, emphasized how our loan limit increases have given partners more opportunity and introduced Rocket Mortgage’s new General Manager Dan Sogorka to the broker community.
On top of that, Fawaz rolled out a new opportunity for our Texas partners – beginning October 1, Texas partners can make a more meaningful impact to their communities by offering a low-cost solution for accessing cash.
We're on the road this fall and winter, and we'd love to see you at some upcoming industry events. Mark your calendars for NAMB National 2024 - we'll be in Nevada from October 18 - 21. Then in November, catch us at the California Mortgage Expo on November 5. And to wrap up the year, join us at the OCN Mortgage Holiday Party on December 5 in California.
The best part? You can use the code ROCKETFREE to register for these events for free. We can't wait to connect in person and show you how we can help you save time, grow your business and close deals faster than ever.
NAMB National 2024 | Oct. 18 – 21 | NV | Register Here
California Mortgage Expo | Nov. 5 | CA | Register Here
OCN Mortgage Holiday Party | Dec. 5 | CA | Register Here
Extended $0 Home Equity Loan Origination Fee
Just in time for the holidays, we’ve extended our offer to cover your clients’ $795 origination fee on Home Equity Loans until November 4, 2024.2 Boost their finances before the holiday season kicks off – share this offer with your clients today.
Solvers found last week’s puzzle to be much more conducive to faster times. Over half of last week’s solvers finished in under 2 minutes, and of the fastest, our leader finished the puzzle in an incredible 10 seconds.
This week’s puzzle gets 3 Rockets out of 5.
1 Home Equity Loan product requires full documentation of income and assets, credit score and max LTV/CLTV/HCLTV. Requirements were updated 2/5/2024 and are tiered as follows: 680 minimum FICO with a max LTV/CLTV/HCLTV of 80%, 700 minimum FICO with a max LTV/CLTV/HCLTV of 85%, and 740 minimum FICO with a max LTV/CLTV/HCLTV of 90%. The client's debt-to-income ratio (DTI) must be 50% or below. Valid for loan amounts between $45,000.00 and $500,000.00 (minimum loan amount for properties located in Iowa is $61,000). Product is a second standalone lien and may not be used for piggyback transactions. Guidelines may vary for self-employed individuals. Some mortgages may be considered “higher priced” based on the APOR spread test. Higher priced loans are not allowed on properties located in New York. Additional restrictions apply. Not available in Texas. This is not a commitment to lend.
2 Clients will not be charged the origination fee (processing fee for New Jersey) on Home Equity Loans with a new Loan Estimate posted on or after July 15, 2024, at 10:00 a.m. ET to November 3, 2024, at 11:59 p.m. ET. Additional restrictions/conditions apply. This offer cannot be retroactively applied to previously closed loans, previously locked loans or loans with a previously disclosed Loan Estimate. Acceptance of this offer constitutes acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. Offer is nontransferable. Not valid with any other discounts or promotions. This is not a commitment to lend.