Why Mortgage Rates AREN’T Falling

Dave:Whats up buyers and welcome to the BiggerPockets podcast. I’m your host in the present day, Dave Meyer, and meaning now we have a much bigger information episode for you. Immediately we’re bringing in a lender professional Caeli Ridge who makes a speciality of serving to buyers. Caeli’s gonna give us a short replace on what’s happening within the mortgage market and supply some recommendation on how buyers can navigate the present market. So we’re gonna discuss to Caeli, however ensure that to stay round after that as a result of I’m going to speak slightly bit extra concerning the economic system and about why rates of interest are staying larger than I believe lots of people anticipated them to. So ensure that to stay round. It’s solely 5 or 10 minutes, and I believe it is going to actually aid you perceive what’s happening within the mortgage market and what may occur over the remainder of the 12 months. Earlier than we bounce into our interview although, I do wanna share a useful resource with you that I really created.I do know that proper now a variety of buyers are combating excessive mortgage charges and are attempting to determine what financing choices are proper for them. So to be able to aid you, I created this downloadable information you can get without spending a dime at biggerpockets.com/assets. And the entire level there’s a personalised information to selecting the correct mortgage for you. So hopefully the interview with Caeli and the context that I’m gonna present will aid you perceive what’s happening out there. However when you’re nonetheless pondering like, what does this imply for me, what mortgage is correct for me, go to biggerpockets.com/assets and test that out. And when you’re a BiggerPockets Professional member, I’m really gonna be internet hosting a workshop with q and a about what’s happening within the mortgage market, what’s happening with financing proper now, that’s on March twenty eighth, and it’s free for all BiggerPockets Professional members. So with that stated, let’s bounce proper into our dialog with Caeli Ridge. Caeli, welcome again to the present. Thanks for being right here.

Caeli:Hey Dave, nice to be right here. Thanks guys for having me again.

Dave:Properly, we’re very pleased to have an skilled lender such as you becoming a member of us in the present day as a result of mortgage charges are clearly on high of everybody’s thoughts, notably actual property buyers. And so are you able to simply give us a rundown on the place charges have gone over the primary quarter of 2024?

Caeli:So I believe we noticed some enchancment, um, late final 12 months, and I believe folks have been optimistic. I really feel just like the, uh, secondary markets in Wall Avenue have a method of decoding what the feds are saying and sort of placing in their very own wishful pondering. Uh, I believe a variety of the expectation was that they’d be decrease than they’re proper now. Uh, that isn’t essentially the case. Um, , to not toot my very own horn, however I’ve been sort of holding, uh, regular for the June-ish July vary for our first charge cuts. You possibly can’t combat the Fed man. I’ll find yourself saying that once more on this this interview. Um, you gotta hearken to what they should say. Uh, so that they’re, I believe they’re higher than they have been most of final 12 months. They’re worse than they have been finish of final 12 months. Uh, however I believe that general we are able to anticipate some enchancment within the coming months. That stated, uh, and I’ve stated this earlier than too, charges go down than they go up. Traditionally, they’re at all times gonna come down a lot slower than after we see them, uh, go up. So we simply should sort of be slightly bit extra affected person and see the place that takes us.

Dave:I do wanna bounce into what you stated about a few of the wishful pondering and fed conduct, however are you able to simply give everybody, uh, only a fast snapshot of the place charges are in the present day? And only for the file, we’re recording this the center of March. It’s March thirteenth, so it might have modified by the point this episode comes out otherwise you listened to this episode. However what are charges the place we sit in the present day?

Caeli:So I appeared this up earlier than we acquired on and bear in mind you guys, the LLPA. So I would like to offer you what the, um, uh, the schematic is for this. However 6.875 could be the speed that you’d lock at in the present day with two factors primarily based on the next variables, a single household residence, a purchase order, an funding property, um, seven 60 or higher credit score with 25% down on a 30 12 months fastened mortgage. That’s the, the rate of interest you’ll be locking in the present day primarily based on all these variables.

Dave:Okay. And that’s for an investor

Caeli:That’s an investor mortgage. If we wanna take a look at an, an proprietor occupied or main residence, you may often anticipate to see a couple of level higher in rate of interest general, um, versus an funding property.

Dave:Oh, that’s higher than I believed you have been gonna say. In order that’s encouraging

Caeli:<snicker>. Yeah, I did sort of put out some notes that I believe could be helpful for everybody, and I’m gonna get into only a few of these when you’re okay with it. Please, after we begin speaking about rates of interest, um, all people there may be the psychology that facilities round an rate of interest that I actually work exhausting to attempt to dispel or no less than present the knowledge so that you just guys perceive the, the science, the mathematics that’s happening behind an rate of interest, particularly for US buyers. So only a few issues that I’d, I’d contact on. Um, , when you take it and also you make it emotional, it’s solely gonna damage you. The rate of interest shouldn’t be a, a giant loopy monster. There’s a very particular set of formulation or calculations that you ought to be doing to be able to decide the place the rate of interest must be for what your, your anticipated return is.Okay? A few good examples are, um, uh, after we sort of get all tied up into the rate of interest phenomenon. Um, you want to take a look at the precept and curiosity cost distinction between, let’s say, competing charges. Let’s say you’ve acquired two completely different quotes and one among which is a, a a 7% and one is a 6.5%. The very first thing I would like you to do is I would like you to have a look at the precept and curiosity cost variations between these two. Don’t fear concerning the taxes and insurances are gonna be static, however take a look at the precept and curiosity cost distinction between no matter you’re being quoted. After which what it is best to do, it is best to in all probability have a, a, a mortgage calculator and get any one among ’em on-line. They’re very straightforward to search out. I would like you to take the general, um, uh, numbers, the mortgage dimension mortgage to worth all of that stuff and see how the precept and curiosity cost modifications for each eighth or quarter or half or full proportion level, um, in charge.Is it a $10 month-to-month distinction? Is it 100 {dollars} month-to-month distinction? What are these variables? And taking that data, understanding what you may reside with, I wanna ensure that all people is wanting on the funding holistically. This can be one of many extra vital factors that I wanna make right here. Um, in case you are taking a look at only a charge and say, properly, this man is saying 6.75, these guys are saying 7%, which I’ll get into in a second. We discuss LPAs, the cost distinction is $12 a month. These guys can shut in two weeks and, and these guys, I’m undecided, I imply, there’s simply extra to it, um, than simply what that quantity seems like on paper.

Dave:So for anybody, everybody who’s listening, I simply wanna clarify what, what Caeli is saying right here is that it’s vital the speed, however actually on the finish of the day, when you’re making an attempt to calculate both as a house owner what your month-to-month cost’s gonna be or making an attempt to distill your money move, what actually issues is your month-to-month cost. Um, and as Caeli was saying, often your month-to-month cost is made up of 4 various things. You might have your principal, you could have your curiosity, you could have your taxes, and you’ve got your insurance coverage. Taxes and insurance coverage are gonna be the identical from mortgage to mortgage. And what you wanna begin taking a look at is how your principal and curiosity cost. That’s why we’re saying simply take a look at principal and curiosity cost modifications between completely different affords and completely different rates of interest. And per Caeli’s level, you are able to do this on any mortgage calculator. We’ve got one on BiggerPockets. So you may simply go to biggerpockets.com and when you wanna simply go to the instruments tab and go to the mortgage cost calculator. You possibly can take a look at this for your self, however go on Caeli.

Caeli:Um, , and it might not even be about competing charges both. Let’s simply say that the charges are X, okay, in the present day they’re at, at seven or no matter they’re, however you’re holding out for six and a half. That’s in all probability a extra acceptable instance to make, is that when you’re ready on the sidelines for rates of interest to get to a sure place, as a result of psychologically you suppose that that’s what must occur, that holistic remark that I made a couple of minutes in the past is gonna be very, crucial. Are you taking a look at truth factoring the futures, the tax profit, all of these issues? Are you gonna hand over $12 a month proper now and miss out on the chance later? So simply I, I’d provide that. Now let’s get into one thing slightly bit extra technical. I received’t go too deep into this as a result of it’s, um, slightly little bit of a, a brand new language for lots of people after they begin listening to what LPAs are, these are mortgage stage worth changes.So after we discuss rates of interest, crucial rates of interest like something will not be created equal. So you actually need to perceive what’s behind how your rate of interest got here to be. So an LLPA actual merely is a constructive or a unfavourable quantity that may connect itself or affiliate to the person traits of that transaction. Instance, occupancy is a giant one. The LLPA for a main residence the place you’re going to reside versus an funding property that you just’re gonna put a tenant into are an enormous distinction. Mortgage dimension, mortgage to worth, property sort credit score rating, buy versus refi, all of those completely different variables include their very own distinctive LLPA. So one of many issues I sort of say when folks get actually, actually hung up on rate of interest is, properly, okay, we’ll change your technique slightly bit then in case you are useless set and also you want a 6% rate of interest, you in all probability discover that, however you’re gonna put 30% down. Um, you want to possibly increase your credit score rating slightly bit. It’s gotta be a single household, it may well’t be a two to 4, all of those various things. So just remember to perceive what’s happening behind the scenes and that it additionally will dispel, uh, a few of these psychology that goes into it.

Dave:Yeah, thanks. Usually lenders typically provide a spread of rates of interest. What you see within the media or when what you’re quoted is both the prime charge or regardless of the common is between a bunch of various lenders. However actually there’s this vary. And if you wish to get on the decrease finish of the vary, your goal needs to be to decrease the chance within the eyes of the financial institution. And there’s alternative ways to do this. Caeli simply talked about a few of them, like get a greater credit score rating. When you could have a greater credit score rating, the financial institution sees much less threat in you. Proprietor occupants, they see much less threat in when you shorten the time period of your mortgage from 30 to fifteen years. These are all methods you can sign to the financial institution that you’re much less dangerous and they’re going to usually provide a greater charge within the type of higher LLPAs, as Caeli simply stated.

Caeli:Yeah, nice, nice factors. After which in fact you should buy the speed down. Now, relying in your circumstances, paying extra factors to get a decrease rate of interest could or could not work. The maths there may be quite simple. Going again to determining the cost distinction precept and curiosity solely between this charge and that charge, after which the fee distinction in factors, you merely divide these two numbers, cost distinction by the general further value for the decrease charge. And that may yield the variety of months it takes to recapture that upfront value for the financial savings that you just’re anticipating. As a rule, particularly on this larger charge surroundings, that isn’t gonna be to your benefit, particularly as a result of most of us are gonna be refinancing in 2, 3, 5 years or no matter. So paying the additional for a decrease charge proper now, undecided that that is smart for many circumstances. I imply, not all, however, however for many

Dave:And Caeli, how a lot does that often value to purchase down your charge?

Caeli:So it’s very tough to gauge an precise, it’s not like I can say, uh, for each 1% in factors, you’re gonna cut back your charge by half some extent. Um, it doesn’t work that method. And much like the LLPA dialog and day-to-day and the place secondary markets are buying and selling, uh, it may be everywhere in the map. I, I want I might provide you with a mean rule of thumb, however they’re simply, particularly proper now when charges are simply sort of on this bizarre house, it, it might actually be not possible to say for this, you’re gonna get this.

Dave:Okay. Uh, I really, I’m sort of remembering, uh, like two or three years in the past I made a spreadsheet that helps you calculate if it’s value it to purchase the factors in your mortgage. Um, we are going to hyperlink to that. It’s free for BiggerPockets members, so we’ll put that within the present description. However per Caeli’s level, you may’t similar to enter in a quantity, you’re gonna should get a quote from a lender after which you possibly can enter that into the spreadsheet that I’ve created and it’ll inform you kind of like when you plan to refinance in two years, it’s not value it. Or when you plan to attend 5 years, it’s it. So it truly is, , is dependent upon the inputs that you just put in and the assumptions that you just make, however that would aid you determine if it’s value it or to not purchase down the factors

Caeli:The calculator or the simulator that you’ve there. I assume, and I don’t know this, however the tax good thing about factors, proper? Most of us are conscious that factors particular to an funding property are tax deductible. Mm-hmm, <affirmative>. So there could also be some secondary, um, uh, benefit there, uh, that could be value contemplating as properly whenever you guys are taking a look at whether or not or not to do this.

Dave:That’s an important level. No pun meant. <snicker>, <snicker>

Caeli:Pun completely meant. <snicker>.

Dave:That’s humorous. Alright, now now we have a transparent reply on the place mortgage charges are in the present day and the way to have a look at them. So I wanna discuss what we anticipate to see from right here for the remainder of the 12 months. Caeli offers us some predictions proper after the break. Welcome again. I’m right here with lender Caeli Ridge speaking concerning the mortgage charges we’re seeing in the present day and what they sign for you as an investor. So let’s get again into it. Properly, let’s discuss kind of the longer term slightly bit. You talked about earlier that you just suppose that June is kind of the timeline for Fed Cuts. We, when you hearken to this podcast, chances are you’ll know this, however let me simply reiterate that fed charge cuts will not be essentially correlated with declines in mortgage charges. That’s extra correlated with bond yields. And we’re gonna discuss this slightly bit extra, um, simply in a few minutes, however simply wanna make that clear upfront. However what makes you suppose that, uh, , the federal funds charge and financial coverage may shift slightly bit within the June timeline.

Caeli:So, , when you guys actually wanna be, um, ready and observe the place charges are gonna go and after they’re gonna go, you want to hearken to the Fed, go to the federal reserve.gov, okay. Web site, choose financial coverage, after which from there on the dropdown, go to assembly calendars and data, I believe it’s. And it’ll present you when the feds are assembly. And actually, that is well timed as a result of the subsequent one is that this month in March the nineteenth and the twentieth. And this might be a, a really distinctive assembly as a result of it’s going to be mixed with, um, abstract of financial projections. So I believe that after we see that, that’ll be an actual good precursor to inform us what is absolutely coming and, and the way. So the general reply to your query, Dave, I apologize, I took you across the block, um, goes to be about inflation, proper?And, and I don’t know the way a lot time we wanna spend on this, however the metrics to have a look at the place inflation is, you’ve acquired your, your PCE, your CPI, if we dig into that, you let me know. Um, jobs report, GDP, all of these issues they’re watching very, very intently. Particularly the PCE is the one which fed favors after they’re going to deci determine the place inflationary numbers are and when rates of interest are gonna be lower, they’re useless set on that 2% quantity. Um, and in addition in preparation to this, this dialog with you, I began doing a little analysis. I’ve requested this query earlier than and no one was capable of reply it, so I simply began doing my very own Google search and whereas I’ve not, it got here from a dependable supply, I’ve not finished my very own digging. I used to be stunned to search out out that the, the financial coverage for inflation of two% was solely initiated lower than, properly, slightly over a decade in the past by one of many former fed chairs Ben Bernanke. It didn’t exist. I assumed it was this longstanding factor and actually, no it was not.

Dave:Nope, it was, it was made up in New Zealand really,

Caeli:Proper, within the nineties I believe.

Dave:Yeah, previous to the Nineties there was no inflation goal that I do know of from any central financial institution and for some motive or one other, I can’t bear in mind the specifics, however in New Zealand they determined they wanted a goal. They got here up with 2% because the goal and the remainder of the world adopted it. And in order that’s the place we’re proper now.

Caeli:And we on this nation it was solely 2000 and and 12, I used to be so stunned by that. I simply assumed that this was, , one thing method again when the forefathers or one thing and had provide you with that is the metric for inflation. However no, it’s, it’s a comparatively new and I’m undecided that I agree that that’s the place it needs to be, however that’s in all probability one other dialog. Um, did I reply the query <snicker>?

Dave:Sure, you probably did. And, and simply so everybody is aware of, uh, the abstract of financial projections is one thing that the Fed places out, I believe it’s quarterly, uh, however principally it’s a analyst like mine’s dream. They put collectively all these charts and all this information about what is going on and what they suppose goes to occur. And there’s this factor referred to as the dot plot and that’s what everybody will get all up in a frenzy about. The dot plot is a principally a survey of all of the Fed governors, all of the individuals who take part in these conferences and the place they suppose that rates of interest are gonna go by the tip of the 12 months, one 12 months out. And I believe it goes as much as two years out. So that is what all of the folks on Wall Avenue and all of the lenders are taking a look at for these abstract of financial projections as a result of it’s the Fed telling us the place they suppose issues are gonna go. Nevertheless it’s actually vital to know that they’re not at all times proper. They don’t comply with the dot plot, they don’t comply with the abstract of financial projections. Precisely. They wait to see what’s gonna occur with, with inflation, with jobs reviews like Caeli was saying. Um, and so it’s simply a sign of the place issues to go. And in my view, typically folks overweigh what’s in these reviews and kind of bounce to some conclusions and don’t look ahead to the information and coverage to really bear up

Caeli:As a result of there’s a leg, proper? Perhaps we should always get a dot plot for what number of occasions they’re proper or incorrect after they, they predict what’s gonna occur.

Dave:I wager you somebody’s finished that. That’s an important thought. They in all probability have, we should always look that up. Yeah. Properly Caeli, earlier than we allow you to go, is there any recommendation that you’ve for buyers about easy methods to navigate this fascinating charge surroundings?

Caeli:Do your math. Like I at all times say <snicker>, just remember to perceive um, what the true math is. Uh, I’d inform you that, um, leverage the upper the leverage, usually you’ll discover when you perceive what the mathematics is, is gonna provide the larger charge of return on the funding as a rule. Um, and, and begin increasing your horizons for what your expectation in your funding is and possibly change technique slightly bit, proper? For those who had expectation that’s nonetheless caught in 2020, 2021, possibly it’s time to sort of confide in um, different concepts of actual property investing. ’trigger there’s a variety of completely different, um, legs beneath that stool and methods you can nonetheless be in actual property and that that asset class and, and up the return that you just’re not getting on the previous mannequin.

Dave:Properly thanks a lot for becoming a member of us Caeli, as at all times, we recognize your time.

Caeli:Thanks Dave. It was nice to be right here. Good to see you.

Dave:Okay, now that now we have Caeli’s boots on the bottom perspective, let’s take a minute to speak about why we’re seeing what we’re seeing and a few sensible actions you can take as an investor proper after this break. Hey everybody and welcome again to Larger Information. Alright, in order that was some tremendous useful data from Caeli. Actually recognize her being right here. And I can think about that this information that charges are slightly bit larger than lots of people have been anticipating is disappointing to lots of people as a result of clearly mortgage charges actually affect your skill to afford an funding property or your main residence. And I wanna simply dive one stage deeper right here and simply clarify why charges have stayed a bit larger than lots of people have been projecting. And I’m truthfully not stunned, like pay attention, I get stuff incorrect on a regular basis, however that is one thing that I believed was kind of clear that charges weren’t gonna come down over the past couple of months and there’s a couple of causes for that.One is that proper now the economic system remains to be hotter than the Fed desires it to be. So that’s the primary factor that we’re taking a look at right here. Inflation is a product of an overheated economic system and the Fed goes to attend till the economic system cools down and inflation cools down earlier than they begin dropping charges. However by a variety of the metrics that the Fed cares about, the economic system is simply nonetheless too scorching. And there’s a variety of debate about what metrics the Fed needs to be taking a look at. I’m not gonna get into that in the present day. What I’m simply gonna say is that the Fed actually cares rather a lot concerning the labor market and what number of jobs there are and so they care about inflation as measured by the patron worth index or the PCE. And after we take a look at these measures, they’re nonetheless doing fairly properly.So the final job report that we had, which is in February of 2024, 275,000 jobs have been added. And only for context, that’s down from the place we have been a 12 months in the past, however most economists have been anticipating someplace within the excessive 100 thousand, like 180,000. And so it’s really outperforming what uh, most economists and I believe the Fed have been additionally pondering was going to occur. The second factor that occurred was simply the opposite day, like three days in the past, um, I believe on March twelfth, uh, the CPI, the patron worth index got here out, which is one among two favored inflation measurements for the Fed. It stayed excessive, it really went up slightly bit to three.2% 12 months over 12 months and it was at 3.1% the earlier 12 months. So it didn’t go up rather a lot, however it’s staying stubbornly excessive. For those who look into this, when you take a look at a few of the charts, you may see that it inflation shot as much as about 9%, then it’s come again all the way down to about 4.Nevertheless it’s been actually gradual to return down previous 3%. Which means that the Fed could also be slightly bit extra cautious in chopping charges. If you take a look at these two issues mixed, if you consider the Fed, they principally have two jobs. The primary job is to cite unquote guarantee worth stability. That’s simply one other phrase for controlling inflation. Their different job is to maximise employment. That simply means make a strong job market, proper? And so whenever you take a look at these two information units mixed, you may see that the Fed doesn’t want to chop rates of interest proper now as a result of the one motive they’re gonna lower charges is as a result of the economic system is slowing an excessive amount of. The inflation remains to be too excessive and they also’re gonna hold charges larger, no less than in my view. They’re gonna hold charges larger till they see the job market actually begin to crack greater than it has.And in order that’s the primary motive why I’m not tremendous stunned that charges haven’t come down. It’s as a result of the economic system remains to be hotter than the Fed would really like it to be in accordance with their most popular metrics. Now the second factor that’s actually vital to know right here is that the markets, the mortgage markets worth, future fed exercise into present charges. So we talked within the interview concerning the DOT plot, proper? So mortgage bankers, all these people who find themselves underwriting loans are wanting on the dot plots and so they’re like, okay, the Fed stated that they’re going to in all probability lower charges by uh, 3 times within the subsequent 12 months. And they also’re planning and so they’re setting their mortgage charges accordingly. They don’t wait round for the Fed to take motion. They’re forecasting and making choices primarily based on that. And so that’s the reason charges got here down like in December as a result of that’s the final time we acquired a dot plot.That’s the final time we acquired a abstract of financial projections. And so folks checked out that and so they’re like, okay, issues are going nice, we’re gonna bake that in. And that’s nice ’trigger mortgage charges did come down, however that implies that so long as the Fed simply follows the plan that they thought they have been gonna do, charges received’t come down anymore as a result of that’s already deliberate into mortgage charges. So that’s quantity two. Primary simply is the economic system is just too scorching. Quantity two is that future fed cuts are already baked into charges. And quantity three, and this one is tremendous vital, is the Fed doesn’t management mortgage charges. I do know they affect mortgage charges, however they don’t set them. For those who take a look at information or when you Google this, be at liberty to go Google this, however mortgage charges are very intently correlated to the yield on the ten 12 months US Treasury.And I don’t have time to get into that truly, when you’re gonna attend the market intelligence workshop I talked about firstly of the episode, we’re gonna get all into that. However for now, simply take my phrase for it. That’s really what occurs. And though bond yields typically do come down when the Fed cuts charges, they don’t essentially try this. As a substitute, bond charges are influenced sure by financial coverage right here in america. Financial insurance policies only a fancy phrase for what the Fed is doing, however it’s also influenced by financial coverage by different international locations like what’s going on within the Eurozone or Japan. Um, that truly influences bond yields right here within the US recession threat really influences bond yields fairly considerably. The efficiency of different asset lessons just like the inventory market or crypto markets additionally affect bond yields. And so even when the Fed does precisely what they’re gonna say they’re gonna do that doesn’t assure that mortgage charges are going to fall.So I’m sorry to be the bearer of dangerous information right here. I do, that is simply my opinion. I do suppose that charges are going to pattern down over the subsequent 12 months or two years, however I’m not stunned to see that charges have remained stubbornly excessive over the past couple of months due to these three issues. And I hope that Caeli’s proper that beginning in June we’ll begin to see charges come down. However there are nonetheless issues that you are able to do as an investor to function throughout this time. Firstly, excessive charges, it does affect affordability negatively. It makes it more durable to purchase stuff, however there are some advantages to excessive mortgage charges, which is specifically, there may be much less competitors. I don’t know what you guys are seeing, however after I’m going out and taking a look at offers and making an attempt to purchase offers, issues are sitting in the marketplace longer within the markets that I’m working in and sellers are way more keen to barter.So if in case you have the money to purchase at present charges, then this might really be an honest time so that you can purchase. The second factor that you possibly can do is think about what Caeli and I have been speaking about earlier is search for methods to get your charge decrease. Lots of these methods contain decreasing the chance for the financial institution, which is issues like reducing the mortgage time period, bettering your credit score rating. You can even think about issues like an adjustable charge mortgage. The opposite factor that you possibly can do is maybe think about adjusting your actual property investing technique, like doing a home hack the place you usually get proprietor occupied charges, which as Caeli stated, are inexpensive than investor charges. So I do know nobody desires to listen to that charges are staying larger for slightly bit longer. However there are nonetheless issues that you are able to do and hopefully from this episode you’ve realized how one can monitor mortgage charges and rates of interest and financial coverage to get an thought of what’s coming down the pipe so you may knowledgeable investing choices. Alright, in order that’s what we acquired for you in the present day. Hopefully this was useful. If it was useful, at all times recognize a assessment on both Apple or Spotify and like, and subscribe to our channel or share it with a pal. Thanks all a lot for listening to this episode of Larger Information. I’ll see you subsequent week.