Rates Now Starting with a “5” – Your Strategy

The big headline this week is that mortgage rates are back under 6%.  If you’ve been an active reader of my newsletter this should not be a shock to you.  For those that missed the forecast, you most likely missed the more important strategy on how to make sure you’re ready to pull the trigger on a potential refinance.

 

Here’s the tricky part.  Rates fluctuate.  They fluctuate daily, and they fluctuate during the day as well.  And rates never move in a straight line.  Below is the most recent 6 months of the US 10-Year Treasury Note.

 

 

In the past 6 months we’ve experienced 9 cycles of rate movement – either up or down.  And I don’t think I’ve ever explained why the “points” on the graph are not points but are either red or green lines.  The lines represent the movement of the rate within each day of trading.  Some of the lines are very long – which represents large intra-day changes.

 

I don’t expect my clients to become bond watchers or financial prognosticators.  All you need to do to ensure you get a great rate for a refinance is one simple step – establish the rate in which a refinance will be economically beneficial to your financial situation.  We call that a Strike Rate.

 

When I work with borrowers purchasing a home or refinancing, upon the conclusion of the transaction I speak with them about their future strike rate.  That strike rate is the rate we established where you’ll want to proceed with a refinance when that rate is available.  I use fancy software to monitor rates, so that when we are close to the established strike rate, I reach out to let you know it’s time to pull the trigger.  Since it’s all been calculated in advance, we can move quickly and ensure you don’t miss your opportunity.

 

If you are still reading mortgage rates in the Sunday paper trying to determine when you may wish to refinance, you have already lost the battle.  Use the strategy of Strike Rate.  Let us monitor the markets so you don’t have to.

 

 

 

 

 

Fool Us Twice – Shame on You!

Earlier this week the Maui Planning Commission voted against rezoning short-term vacation rental units on the now famous Minatoya List.  That was the second part of the con job.  The first con was passing Bill 9 with the promise of zoning reclassification.

 

To get the votes needed to pass Bill 9, a provision was inserted to allow the Maui Planning Commission to reclassify a majority of the Minatoya condos into a new classification for resort condos.  That moved the responsibility off the desks of the County Council.  Now with the planning commission voting no, the fate of about 7,000 condos on Maui will most likely head to court.

 

For those not residents of Maui, the meaning of this story is as important on Maui as it is on any other island in our state.  If you own a home in Hawaii – on any island, you need to understand the significance what Maui’s county government has done and realize that no other county or state official seemed to mind.

 

Eminent domain is the government's power to seize private property for public use without the owner's consent, provided "just compensation" is paid.  Rooted in the Fifth Amendment, it requires a valid public purpose (e.g., roads, schools) and fair market value payment.  Legal challenges often focus on whether the taking truly serves the public or if compensation is adequate.

 

In the case of the Minatoya Units, the purpose wasn’t to acquire land to build a road or a school.  The county used their power to change zoning to prohibit a legal use – enjoyed for decades.  This has resulted in significant reduction in value and thousands of dollars in lost equity by the current owners.  The plan all along was to force one group of people to give up their private property in favor of another group acquiring it.

 

Why is this significant?  It is the first time I can recall our local government not only taking sides but openly advocating for one group over another.  It’s popular to think, and an easy way to justify acting so uncaring towards these owners due to the belief that they are mostly a group of outsiders.  Many of the units on the Minatoya list are owned by residents and retirees of Maui.  Many Hawaii residents on the neighboring islands own Minatoya units as well.  It is not just the mainland haoles who are STVR owners.

 

Let’s take it to the other islands.  Imagine if you decided to purchase an investment condo in Waikiki, Ko’olina or up at Turtle Bay; or on Kauai to buy a condo in Poipu or Hanalei; or even on the Big Island, Molokai or Lanai.  Then one day the government changes the rules, and you can no longer afford to keep your condo and are forced to sell.  But since the rules have changed, the value has dropped significantly.  Are you okay eating a loss of $100,000 or $200,000 or even $300,000?

 

Put yourself in the shoes of the owners of those rental condos on Maui.  What did they do wrong?  Why are they being singled out and punished?  The Lahaina fire didn’t start the housing crisis on Maui - it only exasperated it.  Government there, and on every island has failed to help generate sufficient housing for the residents.

 

With Bill 9 almost set in stone – there is a long shot the County Council will rezone the units.  But unless that happens, Maui’s economy will continue to struggle.  When the class action suit gets to court and Maui is faced with a huge bill to pay – can those that advocated for Bill 9 honestly say it was all worth it?

 

For the rest of us, realize that in Hawaii, you really don’t own it forever.  If our government decides someone else needs it more than you, you could face the same situation.

 

 

 

 

Affiliation Perk

Last Month a mega merger occurred in the real estate world.  Compass Real Estate Brokerage, which already owns Christie’s International Real Estate, acquired rival firm Anywhere.  The combination now makes Compass the world’s largest real estate brokerage firm.  The purchase of Anywhere now puts under one roof some of the bigger well-known titans of real estate.  They include @properties, Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Corcoran, ERA and Sotheby’s International Realty, along with Compass and Christie’s.

 

While real estate is still driven by agent connection, the good news I can share is if you are purchasing a home and are using an agent that works for one of the companies above, one of our partner lenders will offer you a 40-basis point credit on your loan.  On a $500,000 loan, that would equate to a credit of $2,000.  For more information, contact me directly.

 

 

 

And now the week’s economic news…….

 

Rising Inflation

With little significant economic news, it was a relatively quiet week for mortgage markets.  A “second-tier” inflation indicator was much higher than expected, but its impact was minor.  Mortgage rates fell slightly to their lowest levels since September 2022.

 

An inflation report released this week, which measures wholesale costs for producers, came in far above the expected levels.  The January core Producer Price Index (PPI) jumped 0.8% from December, well above the consensus forecast of just 0.3% and the largest monthly increase since March 2022.  The gains were driven primarily by services prices which posted a monthly increase of 0.8%, the highest since July 2025.

 

Core PPI was 3.6% higher than a year ago, up sharply from an annual rate of 3.3% last month and the highest level since March 2025.  Core PPI remains well above the 2.0% target level of the Fed.  However, the reaction was small since investors tend to place a lot more weight each month on the Consumer Price Index report, which better reflects overall inflation levels in the economy.

 

The Department of Labor releases the total number of new claims for unemployment insurance each week.  The latest reading was just 212,000, below the consensus forecast.  Bigger picture, this was far below the inflated figures seen during the early months of the pandemic, and in line with the levels which were typical during the solid labor market in 2019.  Weekly jobless claims are important because they are one of the timeliest indicators of labor market trends.  While other recent economic reports suggest that companies may be scaling back on hiring new employees, this report indicates that they remain reluctant to lay off workers.  The data also showed that the median duration of unemployment is near four-year highs, and jobs for young college graduates are hard to find.

 

While lower mortgage rates have significantly boosted refinances, economic uncertainty and affordability issues continue to constrain purchasing activity, according to the Mortgage Bankers Association.  Applications to refinance rose 4% from last week and were a massive 150% higher than one year ago.  Purchase applications fell 5% from the prior week but still were up 12% from last year at this time.

 

 

 

 

Next Week

Looking ahead, investors will continue to monitor comments from government officials about tariffs and from Fed officials for hints about future monetary policy.  For economic reports, the ISM national manufacturing sector index will be released on Monday and the services sector index on Wednesday.  The key Employment report will be released on Friday, and these figures on the number of jobs, the unemployment rate, and wage inflation are always closely watched.

 

Until next week….

 

*** Please note that Freddie Mac publishes their weekly rate report on Wednesday mornings from data received Monday and Tuesday. 

The graph above is intended to shown rate trends, and not “today’s current rate”. ***

 

 

Reviews From Our Past Clients

With every client, we promise to provide you with a comprehensive analysis of your mortgage needs, the best service possible, and the best rates we can find.  We make it our mission to have every transaction close with our clients happy with the service we provided.  Browse through the hundreds of reviews we’ve received from our clients posted on both Google and Zillow.com, and read what they thought of their experience using Hawaii Mortgage Company.

 

 

Google Link:

Hawaii Mortgage Company Review on Google.com

 

 

Zillow.com Link:

Hawaii Mortgage Company Reviews on Zillow.com

 

 

 

Our Rate Quote System is Available to You

Our automated rate quoting system is live.  Now you can check rates and try different scenarios 24-hours a day.  Remember, it’s just a computer.  For non-standard rate quotes, such as construction, vacant land, and other specialty programs, you’ll still need to give a call.

 

Here’s the link:      https://www.hawaiimortgage.net/todays-rates/

 

 

Do you think all lenders are the same?

There is a difference when you use Hawaii Mortgage Company for your financing.  Here’s a short video telling you why:

 

https://youtu.be/c7AKQ5wa2_U

 

 

 

Broker vs. Banker?

Click the link below to get a quick lesson on why working with a Mortgage Broker will benefit you on your next transaction.

 

https://youtu.be/iH3igW5v2jE