Interest rates. Anyone else ever get sick of talking about them? How about credit scores? The Consumer Financial Protection Bureau? I’ve got all the sexy topics for your today. Even medical collections! Oh and mortgage bonds so in the red, they are on fire too.
It’s a jobs report Friday. Not my favorite but you can’t really avoid them. We’ve been pretty tense all week watching the 10-year treasury yields. This has a direct correlation to mortgage interest rates. When the 10year is up, mortgage interest rates deteriorate, and the inverse also holds true. Yields on the 10YR have been bumping up, all week, against a ceiling at 4.375%. If they break through…. we’re headed towards 5%. Last time we were at 5%? October of 2023, when mortgage interest rates hit their highest levels of my 12-year career.
So what happened this morning?
Pretty much the worst-case scenario. The jobs report was expected to come in at 160k jobs added and unemployment at 4.2%. Instead we saw 256,000 jobs added and unemployment at 4.1%. Of course, we should have been expected to get some seasonal jobs from the holiday season. But 100k? There wasn’t much in negative revisions either. It was overall a strong report underlining a persevering economy. I wonder to whom we should give credit for that? I myself have talked a lot about an inflationary president taking office this month, but a strong economy – specifically a healthy labor market – is a major component as to why we are seeing mortgage interest rates stay elevated. Depending on your politics you can find a way to give credit or blame anyone, but the facts are…well facts don’t really exist anymore, but the data and reports have consistently shown a resilient, dare I say it STRONG economy. Yes, after a change election focused on a “shitty” economy, it turns out it simply…isn’t and wasn’t. I say that from the point of view of someone who has been staring it down, calling bluff because - my own politics aside - I also didn’t believe the labor market would hold during such an aggressive rate hiking campaign from the Fed.
I digress. The 10YR did jump above 4.375% and you now know what that means for interest rates. We shall remain in a market of rate buy downs, both temporary and permanent, and opportunities for those with skin thick enough to stick around and spot them.
In other news, the CFPB is not messing around in 2025.
Let’s start with the good. Medical Collections will no longer report to the credit bureaus – at all. I posted some content about this which spurred a lot of conversations. I understand that many providers will be impacted if people don’t pay their medical bills. The mess we are in is certainly not the fault of doctors out there. Or even therapists. You may or may not know but I started my internship this week as a Marriage and Family Therapist. Those mental health providers also use medical billing. The only recourse medical debt collectors could employ was that your credit score will be impacted if you don’t pay your bill.
But should they be able to weaponize your credit score? Something that impacts so much of your life from your home buying power to your ability to finance a car or open certain types of accounts. When we know what a mess insurance billing is, full of errors from a system that has been broken for a long time…
I can’t solve the healthcare crisis in today’s blog, so today I’ll just be the messenger. Medical collections will no longer impact your credit score.
Buy Now Pay Later
I also posted a reel about this because I think these little programs could lead to a financial crisis. Not alone but coupled with the fact that Americans are under the pressure of a crippling amount of credit card debt. If we back up to my rant earlier in today’s blog, maybe we never had an economic problem – maybe Americans have a behavioral problem with spending? Anyway once their cards got maxed out, it looks like a lot of consumers turned to Klarna or Afterpay or Affirm to finance their spending. The CFPB has eyes on this now and is likely going to increase regulation on these nonbank personal type loans. It’s something to watch because for a long time we’ve wondered how consumer spending continues to persevere against all odds and economic conditions. (READ: STICKY INFLATION)
Save the Dates
If you are a realtor here in Reno, look alive – RSVPs will soon open for Mortgage and Mimosas on Friday, February 14th. The Future is Female is also coming up on Thursday, March 6 and you can actually grab your ticket now or even sponsor a table for all of your besties.