Mortgage – WeVett

August 2025 Mortgage Update: Fed Drama, Slowing Demand & Meme Stocks

matt — Fri, 29 Aug 2025 17:19:12 +0000

Mortgage demand just hit its summer slump.

It was confirmed. Let’s talk about it.

My name’s Evan Kaufman, your loan originator, here to give you an August update. We’re going to go over three major things that we’re seeing in the market right now that are moving interest rates and just plain interesting in real estate.

Number one, we’re going to talk about Fed Chairman Powell and the talk about him potentially being fired by President Trump.

Number two, we’ll talk about the summer low—how it was confirmed. I’ve talked about it in some other videos, but mortgage application data came out showing that applications slowed down in July.

And lastly, we’ll look at Opendoor meme stocks. This one’s interesting, with a little twist on a unique event. If you know about the GameStop meme stocks back in 2020 and 2021, something similar has happened in real estate.

So, let’s start with the first one: Jerome Powell, our Fed chairman, and the idea of him being fired by President Trump.

For the last couple of months, there’s been news insinuating that the president has been pushing Powell to lower interest rates. There have been a lot of public statements and pressure from the White House saying, “Hey, we need to lower interest rates. Look at what’s happening in the market.”

That push isn’t necessarily crazy—economic data has been mixed. Some data has been weaker, but a lot of it has still been relatively strong. That means you could argue for lowering rates, or for keeping them the same, and either way the economy would probably stay on track. Many other countries have already pulled back their Fed funds rates, so the White House is looking at them and saying, “We should follow suit.” Maybe yes, maybe no.

The thing is, U.S. economic data overall has been strong. There have been weak points, but generally strong. So, I understand the push and pull. But more recently, there have even been outright calls for firing Jerome Powell, which is very unusual. It’s not completely unheard of, but it would be extremely rare in modern times for a president to fire the Federal Reserve chairman.

What has that meant for mortgage rates? It’s created uncertainty. And uncertainty tends to raise rates. When investors—those buying U.S. treasuries, which heavily influence the mortgage market—get spooked, they demand a higher yield.

That means big investors, whether foreign or domestic, buying up 10-year Treasury bonds (which lenders like us use to hedge mortgage bets), are saying, “We’re more uncertain about the U.S. economy right now. We need a higher return.” And in turn, that raises mortgage rates.

So even if the Federal Reserve lowered the Fed funds rate, uncertainty could still push mortgage rates higher. That’s what we’re seeing right now. This whole “fire or not fire” discussion around Powell is creating instability, and ironically, instead of lowering rates, it’s pushing them higher.

Number two: the summer lull. Sure enough, in July, we saw some of the largest drops in mortgage applications. I mentioned in a few videos back that we typically see a summer lull where things slow down—usually around the Fourth of July. It’s like the “Christmas” of the mid-year, when people take a break from home shopping. Fewer applications, less activity.

The data that just came out confirms it. Mortgage applications slowed down, and we’re also seeing inventory expand. For example, homebuilders now have nearly 10 months of supply—around 9.8 months according to a recent survey. That’s a lot of inventory compared to just a couple years ago when it was a third of that or less.

So, yes, we’ve hit the summer lull. But that also might mean there are some good deals if you’re still looking to buy.

Lastly, number three: Opendoor meme stocks. If you remember GameStop meme stocks and the “to the moon” craze, where people online—Reddit forums, blogs—pushed GameStop’s stock up just to squeeze Wall Street, something similar just happened in real estate.

Opendoor, which was an “iBuyer” company (they’d buy your home with cash based on an algorithm, then resell it), was almost bankrupt but managed to hang on. Recently, it became the target of meme stock traders. Its stock price shot up dramatically, then quickly crashed back down because the fundamentals of the company hadn’t actually changed.

It’s just a quirky, unexpected event: a real estate company turned meme stock. That’s something we don’t see very often.

Well, that’s our August update. My name’s Evan Kaufman, your loan originator, here to help guide you through. As we head deeper into August, I think we’ll get a better picture of what the last half of the year will look like, and I’ll keep you updated.

Thanks for watching. Take care.

June 2025 Mortgage Market Update

matt — Thu, 26 Jun 2025 17:52:06 +0000

June 2025 Mortgage Market Update

The month of June 2025 is kicking off to be a very exciting one.
Looking back at May, we saw some major shifts in the market—and now, I think we’re going to see those continue into June.

We’re going to cover three big topics in this update:

Tariff Cooldown
Post-Spring Application and Inventory Trends
GSE Privatization Developments

1. Tariff Cooldown

Since the election and President Trump’s return to office, we’ve seen a lot of tariff volatility—on again, off again.
This back-and-forth movement defined much of May, and now heading into June, we’re starting to see something new:

Not necessarily a cooldown, but a normalization.
People are becoming more accustomed to the tariff whiplash, so the market’s response has been less dramatic.

Even if tariffs are activated or removed, the shock factor is lower now.

That said, the long-term consequences of the tariff shifts—positive or negative—are still unknown.
I expect continued uncertainty, but not quite as extreme as what we saw in April and May.

2. Post-Spring Application & Inventory Cooldown

As we head into mid-summer, we often hit what I call a “midsummer lull.”

Just like the stock market tends to slow down when traders head to their summer homes, the housing market also tends to cool slightly.

We typically see:

January & February: Mortgage activity begins to ramp up
March, April, May: Heavy-hitting months for applications
June & July: Still active, but starting to cool

Especially for military families, moves can start earlier in the year. But by June, we start seeing purchase application momentum stall, which is exactly what we’ve seen over the past couple of weeks.

Inventory Watch:

Housing inventory is now at its highest point in 2025
We’ve broken 800,000 active listings
Still historically low, but much higher than we’ve seen in the past 6–18 months

This could mean buyers are cooling down, but sellers are still listing, contributing to an inventory increase that matches the seasonal lull.

3. GSE Privatization

Now onto the big conversation that’s emerged in recent weeks:
Privatization of the GSEs (Government-Sponsored Entities).

What Are GSEs?

Fannie Mae & Freddie Mac
They purchase and securitize the majority of conventional, FHA, and VA loans
Backed by the federal government since the 2008 financial crisis

Prior to 2008, these were private companies. But after they collapsed, the government took control, placing them under conservatorship.

What’s New?

President Trump and FHFA director (Pulte) have begun discussing removing the GSEs from conservatorship
This would privatize them again and return them to independent status

Why This Matters:

Privatizing GSEs introduces a lot of uncertainty. There are strong arguments on both sides:

Pro-Privatization:

Could increase competition in the secondary mortgage market
New players could drive lower rates through innovation and pricing power

Against Privatization:

GSEs currently benefit from implied government backing
That backing keeps U.S. mortgage rates among the lowest in the world
Removing it could raise rates, as investors would demand higher risk premiums

We don’t yet know where this will go—but for the first time in a long time, these conversations seem to have momentum.

Is It Serious?

It’s hard to say.
This might be another situation like tariffs—a lot of talk, but not necessarily real movement.

Still, with both the President and the FHFA Director pushing the idea, we could see some traction.

That said, many in Congress—especially Democratic Senators—are cautioning against moving too fast.

They argue that such a massive structural change to one of the largest financial operations in the world—the mortgage system—should be handled slowly and carefully.

“Quick moves could break things,” they say.
And I agree—we’re talking about trillions of dollars in loan volume.

So, will it happen?

Maybe.
But even if it does, it will likely take months—if not years—to complete. And there’s always a chance it doesn’t happen at all.

Summary: What We’re Seeing in June 2025

Tariff volatility is calming—not gone, but less shocking
Spring mortgage applications have plateaued, and
Inventory levels are rising with the midsummer lull
GSE privatization talks are heating up, but much remains to be seen

My name is Evan Kaufman, your VA loan originator.

Thanks for tuning in to this month’s Mortgage Market Update.
Take care, and I’ll see you next time.

ARM vs Fixed Rate Mortgage: Should You Roll the Dice in 2025?

matt — Thu, 26 Jun 2025 17:29:11 +0000

What Is a Bad ARM, a Good ARM, and How Can They Help or Hurt Me?

My name’s Evan Kaufman, your VA loan originator—here to help explain.

We’re talking about Adjustable Rate Mortgages, otherwise referred to as ARMs.

Here’s how we’ll break it down:

Old ARMs vs. New ARMs
ARMs vs. Fixed-Rate Mortgages
The pros, the cons, and how to evaluate if an ARM is right for you

Old ARMs vs. New ARMs vs. Fixed Mortgages

Most people these days—and in recent years—have used fixed-rate mortgages.
You’ve likely heard of the 30-year fixed—that’s the most common—followed by the 15-year fixed.

With a fixed mortgage:

Your interest rate stays the same for the entire term.
It’s simple, reliable, and still the most common type of mortgage today.

So, What’s an ARM?

An ARM, or Adjustable Rate Mortgage, is just that:

A rate that can change—it adjusts over time.

But let’s be honest—when some people hear “ARM,” it triggers memories of pre-2008, when they were scary.

Old ARMs (Pre-2008):

Unregulated
High risk
Interest rates could jump significantly in just 1–3 years
A major contributor to the 2008 housing crash

New ARMs (Post-2008):

Today’s ARMs are very different. They are:

Highly regulated
Equipped with caps and predictability
Much safer for borrowers

Let’s dive into how they work and how to analyze them.

How to Read ARM Numbers (e.g., 5/1/1/5 or “5/1 ARM”)

You’ll often see ARMs represented by three or four numbers. Let’s take 5/1/1/5 as an example:

First number (5):
How many years your rate is fixed. In this case, 5 years.
Second number (1):
How many times your rate can adjust per year after the fixed period.
Third number (1):
The maximum amount the rate can increase or decrease in one year.
Fourth number (5):
The maximum amount your interest rate can increase over the life of the loan.

Example: 5/1/1/5 ARM

Fixed at 5.5% for the first 5 years
After year 5, it can adjust once per year
The rate can go up or down by no more than 1% per year
The rate can never increase more than 5% total, meaning a max of 10.5%

If rates skyrocket to 15% in 10 years, you’re still capped at 10.5%.

If rates drop to 4%, your rate could adjust down to 4.5%—but no more than that 1% per year.

Why ARMs Haven’t Made Sense (Until Recently)

Over the last 15 years, ARMs often didn’t make sense because:

Interest rates were at historical lows — Why risk an ARM when you could lock in 3–4% for 30 years?
We had an inverted yield curve — Short-term loans actually cost more than long-term ones.

This meant that ARM rates were often higher than fixed rates, making fixed the easy choice.

What’s Changed?

Two big things:

Rates have gone up — We’re no longer at those record lows.
The yield curve is normalizing — ARM rates are now more competitive.

Today, ARMs can be 0.5% or more lower than fixed-rate options.

So, When Might an ARM Make Sense?

Ask Yourself These 4 Questions:

1. How Long Will I Keep This Home?

If the ARM is a 5/1, and you know you’ll sell or refinance in 4–5 years, you’ll never even reach the adjustment period.

Military? Short-term assignment?
Not planning to keep the home long-term?

Then an ARM might be a smart choice.

2. What Direction Do I Think Rates Are Going?

If you believe rates will:

Go down → an ARM might allow you to ride that drop.
Go up → then you’ll want to lock in while you can.

Today, rates are higher than recent history, but still below long-term historical averages.
So if we face economic slowdowns, we may see rates drop—and ARMs might allow you to benefit without refinancing.

3. What’s My Risk Tolerance?

I like to call this your “roll the dice” factor.

Risk-averse? You may want the peace of mind of a fixed mortgage.
Willing to take a calculated gamble? An ARM could pay off—especially with a clear short-term exit strategy.

Remember, new ARMs are not the dangerous products of 2008.
But they still require careful analysis.

4. What’s the Rate Spread?

If the ARM rate is higher than the fixed rate → skip the ARM.
If it’s ~0.5% lower or more → strongly consider it.
Even 0.25% lower could be worth it if you’re certain about moving or refinancing before the adjustment.

In Summary

When comparing ARMs vs. fixed-rate mortgages, here’s what to evaluate:

Do you plan to sell or refinance before the adjustment period?
What’s your comfort level with rate adjustments?
Is the ARM rate lower enough to justify the risk?
Where do you think rates are headed?

My name’s Evan Kaufman, and I hope this helped you better understand the good, the bad, and the strategic use of ARMs.

Take care!