Five-Year Treasury Auction Shows Why Mortgage Markets Are Struggling

Good morning, everybody. Let me check some stuff to make sure the sound's coming through the right place. No, it's not. It's not? I don't sound grainy. I look grainy. All right, that's fixed. Uh thank God I looked at that. I hate when that happens. What's new with you today? How was Rotary? Oh, Rotary was so interesting, but um I didn't really enjoy it. No, I'm teasing. Um good information, you know, stuff I learned a long time ago, and it's always nice to have a refresher. Yeah, I learned it like when I was like 20. Yeah, I I I wasn't that mature at 20. No, it's it's talking about how to communicate with people, and it's like these are this is the English language. The way you communicate with other painters.

I I don't speak it well, but I know how to how to communicate. Communicate. The way you speak with other painters is nothing like speaking in the real world with regular peoples. Oh, you want to talk about veterans? The military? Totally different. Completely different. You can say but in between two sentences and and they We're We're saying something else totally anyway, and but wouldn't come into play. Hopefully not. That's the gay brigade. Um the happy one, that is correct. Exactly, very happy. Happy to be in the military. That's right, the '50s version of it. Yeah, what do you got this this morning? I got a few things, but why don't you go ahead and give your numbers first? These are so exciting.

You're not going to pick on Jim today? Oh, Jim, yeah. Jim told us to have a good show, and Have a good show, and I said, okay, we'll talk about you a little bit. So we talked about Jim, and and now we're done. We didn't What I think they need to do is have Craig Arona come up there and have a conversation about what you should do and how to connect with people cuz he's much better at it. Is he? Oh, he's Dude, the guy is I did his website and everything about him, and I was like, holy cow, this guy knows a lot. He's smart. Yeah. Smart dude. Look it, I was driving over here this morning after the Rotary event and thinking, I bet we're at 868 active listings in Stanislaus County. I missed it by two.

So you were wrong. I was wrong again. 374 pending sales, boop boop boop, that's up two from yesterday, I believe, and 190 closings. So that's I think that's up 11 um from yesterday. That's my memory anyway. So those are the facts, Jack. Things are happening. We're probably What do we have? We have another week, don't we? We have three days next week, yeah. Three days and next week? Yeah, cuz uh the 1st is on uh is it Thursday or Friday? Yeah, it's on one of those two days. Thursday or Friday? Oh. You are correct. Okay. Uh the 1st is Thursday. Yeah, and but then we have three more three more days after the the end of the month for you to be able to get your closings. Second is Friday. That'd be by Saturday.

So by Friday you should have all the numbers in. And again, hey, don't forget our real estate jerky website is up, and it has all of our stuff. So if you miss anything here and you want to watch it, go there. It will be there. Um and also we have a community corner that talks about all the local stuff and that's going on in the community. And if you're not on there, please reach out to us. We'll get you on there. All There's now um farmers markets on there um and I think a few other things cuz farmers markets. Farmers market, yeah. Yay. You know, like the one down I always wonder when it is and when it's not, and then the one there was one that stopped in May. It's like, why'd you stop in May?

Anyway. Did they still have one on 10th Street? That's the one that's Yeah, that's the one. Yeah. That's the one that's still running? Okay. Because you never know when it stops because it does stop during a period of time and starts again. Well, now guess what? Just go to our website and you'll know everything. Right. Yeah. You'll know how I'll have to go there. I'm going to have to go there to see what's going on. Yep. All right, what else do we have today? We It's another ugly day for rates. Oh, how many basis points? The 10-year is at 5. 16. That's up six basis points. Rates are worse by another 46 today, and I think yesterday we ended 81. So that's 120 something uh worse that we've been in the last 24 hours.

Did you get any alerts to lock? How many is the question? Even today I'm sure we're waiting on it. It's just it is ugly out there right now. I mean, we're on our way back, and we can't blame inflation. This is all oil. All oil. So I did notice at the UN that the uh Iranian I guess he's the president or whatever, he got up to talk, and the US delegates We talked about this yesterday. No, no, this was yesterday that he did this after we had already had our show, but the Iranian got up to start speaking, and all the US delegates got up and walked out. Oh, really? Yeah. We don't want to hear your bullshit. Yeah, exactly. Yeah. Don't threaten us. Well, there you go. Yeah. Uh let's see what do we have?

Uh Dow's down 382. Shocking. Yeah. Uh let's see what else is So yeah, they lost 88 basis points on the day yesterday, and the 10-year set a new cycle high at 5. 13. Now it's 5. 16. This is the highest since 2007. Again? Whoa. Yeah, 2007, that was like almost 20 some years ago. 19 years ago exactly. Almost 20. Um Yeah, so the biggest This is the uh This And this is the biggest one-day jump since April 7, 2025. On my birthday. Uh we touched 5. 15, and I said we're at 5. 16 now. Everything's down. Wednesday's Anyway, it's Utilities and real estate got hit will get hit the hardest with all the stocks and everything else out there right now. Yeah. Utilities? Great. Yields and oil. Wednesday's business survey came in hot.

Private sector activity grew at the fastest pace in more than 5 years. Hiring was the fastest since 2022. The price pressures picked up on both sides, factories and service, and that's a huge combination for the Fed, and we got stronger growth plus rising rates. We got a problem coming where you're going to need all that extra money to pay to live. Well, I got a plan. So then the Treasury tried to sell 70 billion in 5-year notes, and the and the demand was soft. Yeah, and How many billion? 70. They cleared at 5. 03% with about 30 3. 1 basis points above where they traded right before the sale. The 5-year toppled at 5%, and this is the first time since 2007. So everything is the worst it's been since 2007.

Sound a little bit like Eeyore. It is the worst. It is the worst. Yeah. Um Well, you know, So AI Let me finish, man. You you got to start sinking so you know when you're going up. Yeah, well, we I We've been beat up. You know, I've been saying like in the last When someone asked me, should I get in this industry? I'm like, well, if you look back, we've had like 12 to 15 good years. Well, we've had 5 years that I didn't do bad in, but it's not my best years, and it was tough, and it's still tough. And so I I bet you we're going to see more people get out of the industry. AI companies have issued more than 1. 5 trillion in debt this year. That's the competition for Treasury buyers. That's what it is.

Softbank just sold 11. 1 billion in junk bonds. Why is it a junk bond? It's junky. It's the prices. Large yield because they don't have the the backing like the government does. So global hit uh global debt hit a record 365 trillion in the first half per the Institute of International Finance. More borrowers chasing the same dollars means higher rates. Mortgage sit at the same line. Fed The Fed governor, Michael Barr, piled on Wednesday. He said more hikes are likely needed, and inflation risk is up while labor market risk is down. We're in a perfect storm. This morning the New York Fed president, John Williams, a permanent voter, said that another hike by year-end may be appropriate. Philly Fed president, Anne Anne Paulson, also a voter, said modest tightening may be warranted.

Fed futures now put odds of an October hike at 64%. Next Fed decision is October 28. Wow. Yeah. So let's get into the oil in Iran. Brent snapped a 5-day losing streak, up 3. 9% to 103. 08. WTI is up 1. 8% to 92. 16. Uh the trigger, Iran's president, Pakistani whatever it is, told the UN this country cannot be made to surrender. Oh, really? Okay. Well, don't made. Could ask you. Could you please surrender, please? Uh President Trump and Z or G or whatever his name is, they they met. Yeah, they extended the trade They extended the trade truce to January 2027. Markets were hoping for a longer. Uh that's pretty much it for that kind of stuff. We talked about the bonds. I don't want to beat a dead horse, but let's see.

Freddy Max weekly survey dropped at Eastern last week with 6. 95 is the rates. I guarantee you. Mortgage News Daily put the 30-year fixed rate at 7. 26% on Wednesday, up nine basis points to 7. 17. I guarantee you that's like 7 and 3/8 today. Okay. Yeah. Not the worst, but not the best, but we could get there if we keep going this way. And what's that going to do? Slow everything now. Yes. It'd be like It'll be like uh 2023. End of the year. Oh, yeah. End of 2020 2024. That end of the year of '23 into '24 was like cock-a-doodle-doo. Can I hear crickets? That's what I'm talking about. Yeah. Cricket? So people If you got cash, people will be buying still buying. If things are cheaper, people will still be buying.

A new house is about $35,000 cheaper than a used one down the street, and it often comes with a rate buy down. That's why builders would should be building more, but they're not because their numbers are way in the toilet. Are they still in the '30s? I I don't have Yeah, that was the last time we talked. They're not going to come out for another month. Right. Okay. Uh but I do have some Did I get over that information for today? Go back, go back, go back. Go back, go back. Go back. To the USSR. Oh, funny. You're a fun guy. Yeah. Uh we had jobless claims today. That's what we had. Initial jobless claims, which measure individual final unemployment benefits for the first time, was reported at 197,000 claims for last week.

This represents a decrease of 1,000 from the previous week figure of 198,000 and was below expectations of 201,000. Continuing claims increased 1. 7 19 million from the previous week revised figure of 1. 77 I'm sorry, 1. 717 million. So continuing claims is going up, but new claims dropped. Dropped. Yeah. So um we have strong labor market. Strong, strong labor market. I know we had um new home sales. Where'd that go? Yeah, so new home sales, which measure signed contracts on new homes, increased by 6. 4% in August to a 684,000 unit annualized pace. The inventory of new homes on the market has was unchanged at 483,000 while the median new home price increased by 4/10 to 393,700. But it's an increase.

Yeah, but not But that's not 393,700 for That's a That's new home nationwide. That means they are not building big homes. Right. Yeah, or they're not Big homes aren't selling. Big homes aren't selling. They're doing entry level. Yeah, so that's I think what it Do I have anything Uh Diesel, is that a record in California? It's at $6. 50 a gallon. I want to know where Oh, that's nationally. Where do I go to get that? Yeah, not here in California. Yeah, well, and again, that's all uh our our governor. Yes, everything's up because of Iran and the different and the oil prices and that kind of stuff, but not like California. We're So I was seven, so it's probably seven. So about a buck difference in California minimally on on diesel.

Yeah, and but you know, all those taxes were going to help our roads. Done such a great job with them. Oh, wait, they haven't done anything. Yeah. Let's see. Extra jerk. How's that labels itself? Greenville, North Carolina in 1967 ranch, four bedrooms, two bath, 1,553 square feet, asking 250,000. Time to move. Uh the catch, the the artist ZHC painted it with Mr. Beast for one of his videos. Murals in every single room, and everything is labeled in quotation marks. The door says door. Dishwasher says dishwasher. Hot pink bedrooms, a giant Mr. Beast mural, there's a dinosaur, even bathrooms got the treatment. Zillow Gone Wild posted it yesterday. So, if you want a house that's got everything that have to be repainted or keep it the same way, there you go.

I wonder how much money Mr. Beast made off of that video. That's where he makes his video, money. I mean, he does stuff like that, yeah. Oh. Mr. Beast. You have no idea who I'm talking about, do you? None whatsoever. So now Yeah, that tells you you are not in the groove with the new stuff. No, I'm not. I'm 65. I'm no new stuff. I look at the old stuff. All right, so that's that's the different stuff. Those are the facts, Jack? That's the facts, Jack. And that's all the numbers for today. Very nice. Yeah. We'll have state numbers tomorrow and some more local numbers just to see where where we've increased. Or And we won't decrease. Is that what we're going to see? Yeah, we're going to see that.

Um today is Thursday, so if you go to Real Estate Jerky Community Corner, guess Calaveras Grown Certified Farmers Market is going on today from 4:00 p. m. to 6:00 p. m. Get it up there. Modesto Certified Farmers Market Thursday is going on from 8:00 a. m. to 1:00 p. m. today. That's a long time. Weber Town Farmers Market is Thursday also, and that's from 8:00 a. m. to 1:00 p. m. Well, where's Weber Town? And that's in California. Yeah, it's got to be in uh That's in San Joaquin, yeah, Stockton. Oh, Stockton area. Weber Weber's Town Mall. So, it's Weber's Town Mall. All right. Parking lot, Stockton, San Joaquin. You got the Edible Extravaganza tonight. Well, gotcha. Gotcha. Yeah, downtown. That's right.

It's been there for 40 years. 40 years. It's crazy. And then if you have nothing to do on Friday, we'll tell you tomorrow, but we uh give you a little sneak peek. Los Banos Downtown Farmers Market is on uh Friday from 6:00 p. m. to 9:00 p. m. And you on Saturday you have the And that goes from July 17th through October 2nd. So, what the difference is is we put the farmers market on here and it gives you the dates that it runs from instead of putting it over and over again. Yeah. So, there you go. Those are some things you can do with the kids. Like I'm going to go downtown and and get some farmers market. That's good. Yeah. There you go. There you go. We used to ride our bicycles down there. A lot of fun.

Used to be a lot of fun. Well, it's, you know, it's different. But if you really want to know what's going on around town in four different counties, right? Yeah, five actually. Stanislaus, San Joaquin, Tuolumne. Actually, it it's only I throw Merced in there too, I think. Stanislaus, San Joaquin, Calaveras, and Tuolumne counties, but I think it puts in Merced County occasionally too. I think I need to have it looked at that. Okay. Okay. Well, just go to realestatejerky. com Community Corner. That is correctamundo. So, it says four county. Oh, Stanislaus, San Joaquin, Merced, Calaveras, and Tuolumne. That's uh that's five counties. Yeah. I think that whoever did this needs to fix that. Five. Yeah.

Get right on that when we get off this thing. Yeah, that's That's because that would be you. I know. And it's a gorgeous site. Just go look at it. Tell us tell us if something doesn't work. Everyone's like, what? What? You you do websites? Yeah. No, I do authority sites. Then an absolutely beautiful one for our Modesto Sunrise Rotary. Oh, you had to bring that up. I did have to bring that up because it's a gorgeous site. Yeah, but they don't want to use it because they got personality conflicts. And let's just move on. Um I don't really care. It was a I mean, I made a great site and it's free. Don't have to pay for it. You don't have to do anything. We just have to put it up, but they'd rather use the old one.

I know. So, that just makes it easier. Desiree will have a beautiful site her year. There we go. Perfecto. Uh but if they come up with amazing site, and that's the thing, is if they have one in the works I don't know about and it's going to come up and it's going to be amazing, great. Yeah. That's fantastic. Because it's all about the club. That is correct. And that you use. Right. Or that you start and it be people with. That's what I said. You use. Yeah, that you use. I get it. It took you a minute. All right, everybody. Make it a great day. We'll be back tomorrow. Okay. All right, bye. Peace out, brothers and sisters.