Something Big Is Brewing on the Ohio Ballot

Hope everyone took some time to spoil their moms yesterday! We spent the day baking on the ball fields, which honestly felt like a gift after the cold and rainy Spring we have had. No complaints here.

Nick and I are back in the saddle this week after an incredible week in Chicago at GrowthCon. Tons of great takeaways, big ideas, and a whole lot of motivation. The future of this industry is bright and we plan to stay right at the front of it!

Now let's get into what's happening in the mortgage and real estate world this week. Let's goooo!

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Read time: ~5 minutes

Rates ended LOWER compared to last week, and volatility was LOW. Rates are in the low 6% range for most loan types without paying discount points. Paying discount points can get you in the high 5's.

Something Big Is Brewing on the Ohio Ballot

This past week wrapped up the first round of elections, and honestly, there wasn't much to write home about from a housing or mortgage standpoint. But November is a different story, and there's one thing in particular that Nick and I are paying attention to.

You may have heard about the "Ohio Eliminate and Prohibit Taxes on Real Property Initiative." There's a group out there right now gathering signatures to get this on the November 3rd ballot. They are hitting the pavement hard as I was approached twice last week by this organization. If it qualifies and passes, it would amend Ohio's constitution to eliminate all property taxes. We're talking land, buildings, structures, all of it. Gone.

The signature deadline is July 1, 2026, so this is very much still in motion.

As a mortgage professional, this is something I'm watching closely because we all know it would completely change the homeownership equation. On one hand, no property taxes means lower monthly carrying costs for homeowners and buyers. Sounds pretty amazing as property taxes are a significant chunk of everyone’s monthly payment.

But here's the other side of it: Ohio schools and local governments are heavily funded by property tax revenue. If that goes away, there are real questions about what fills that gap and what it means for the communities our clients are buying into.

I'm not here to tell you how to feel about it politically. But from a pure real estate economics standpoint, this would be one of the most significant ballot measures Ohio has ever seen.

Keep an eye on ballotpedia.org as we get closer to that July deadline. There is momentum gathering and we wouldn't be shocked to see it on the ballots come November.

All Signs Are Pointing to Higher Rates...Yet Rates Keep Droppin'

We've told y'all time and time again, two things have a major influence on mortgage rates: Jobs and Inflation. To see rates drop, you need to see pain in the jobs market and inflation cooling off.

Last Friday, we got a scorching jobs report for April. 115,000 jobs created against an estimate of just 55,000. That kind of number should have sent mortgage rates soaring faster than a bidding war in 2021.

Then there's inflation. Remember, the Fed target range for inflation is 2.0%. The annual rate jumped to 3.3% in March, the highest we've seen in over a year and a sharp spike from 2.4% in January and February. The main culprit was energy costs, specifically gasoline, driven up by the war in Iran.

In a normal market, we'd likely be watching rates creep toward the high 6s or low 7s right now.

So, why are mortgage rates trending lower when every indicator is screaming higher?

Three words: Mortgage Backed Securities (MBS).

Back in January, the current administration directed Fannie Mae and Freddie Mac to purchase $200 billion worth of mortgage-backed securities. And they have been buying.

It's hard not to connect the dots. Those MBS purchases appear to be putting a ceiling on mortgage rates at a time when a hot jobs market and rising inflation would normally send them climbing. Is it the only reason rates have held steady? Probably not. But it's likely a major factor. Given everything happening in the economic environment right now, rates should be higher, and this policy may be exactly why they aren't.

That said, we want everyone to be cautious about getting too comfortable here. The $200 billion in MBS purchases isn't a permanent fix. If inflation continues to run hot and the jobs market stays strong, there's only so much the government can do to keep rates artificially suppressed. Think of it as a band-aid on a bigger wound. It's helping right now, but the underlying fundamentals still point toward upward pressure on rates.

Our advice? Don't expect lower rates from here. The window we're in right now may be better than what's coming down the pipe!

I Can No Longer Deny It: AI is Truly Here

I'll be the first to admit it. I have been an "AI World Changing" skeptic from day one. Sure, jumping on ChatGPT or Claude to help edit blog posts and emails has been a nice time saver, but I always looked at AI as just a smarter, more sophisticated version of Google. A glorified search engine. Nothing more.

That changed last week.

Nick and I attended GrowthCon in Chicago, one of our favorite events of the year. Our mentor Amir has a gift for bringing in top notch talent, and this year was no different. These events always get our blood pumping, partly because we know firsthand how hard it is to pull off something at that level.

But there was one presentation that genuinely made my jaw drop.

It was a demo of a new mortgage loan origination platform called "Tinman." Now, I have been a loan originator for 16 years. For all 16 of those years, I have worked inside loan origination systems that were outdated, slow, and clunky. Most of you have probably heard of Encompass, the platform roughly 1 in 2 mortgage professionals use every single day. And I will be honest with you, it is not good. Like…at all. It is slow, inefficient, and feels like it was built in a different era.

This Tinman system is something else entirely.

It is the first mortgage platform built with ChatGPT directly integrated into the system. When a client submits an application, Tinman can underwrite the loan in 60 seconds. From there, you can interact with the system conversationally, just like you would with ChatGPT. Have a client that just applied with a 500-credit score? Ask the system to build them a plan of action. It will analyze their full credit report and map out the most effective path to getting their scores where they need to be.

Want to boost a client's pre-approval by $50,000? Ask it. The system will dig into their credit, income, and assets and hand you a detailed breakdown of exactly what levers to pull.

Honestly, watching the demo was equal parts exciting and unsettling. This technology will eliminate jobs. There is no way around that. But it is also long overdue for an industry that has been painfully slow to evolve. The cost to close a loan is absurd. The fact that 30 days is considered the standard to close is even more absurd.

AI is officially here and it is going to change our industry forever. You can keep denying it or you can get ahead of it. The ones who adapt quickly are going to see growth they never thought possible. Buckle up, the future is now.

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Don’t hesitate to reach out if you need anything at all. Have a wonderful week!