Good Tuesday morning from your Hometown Lender. Let’s get to Tues market analysis!
Rate sheets today will continue to see worse pricing, with most rate sheets seeing rates about .125% higher than the end of last week as oil prices continue creeping higher. Reprice risk today is moderate, it’s another day with nothing on the economic calendar, leaving markets to focus on the conflict in the Middle East. The U.S. bombed Iran for a tenth night after President Donald Trump said Tehran would pay ‘many times over’ for the death of American soldiers, and Iran targeted U.S. sites in Bahrain, Kuwait, and Jordan.
The reality though is that markets don’t care about the military attacks, instead staying focused on the movement of ships and oil through the Middle East. Now it’s not just the Strait of Hormuz that is being shut down, Iran-aligned Houthis in Yemen have also said they would set up a naval blockade in the Red Sea to block Saudi Arabian oil movement. Oil prices have jumped since the fighting resumed, but there is still a lot of room for them to move higher. As I continue to point out, expect mortgage rates to move higher as oil prices do, as markets anticipate more energy inflation.
Best case scenario today is that we don’t see bonds get much worse, but the door is open for bonds to continue selling and for lenders to reprice worse later this afternoon.
Market Analysis – From a higher and better view:
- Bonds: The 10-year Treasury is hovering around 4.60% as investors balance easing oil prices against renewed tariff concerns and continued geopolitical uncertainty. With little economic data on today’s calendar, headlines—not reports—are driving the bond market.
- Mortgage Rates: The average 30-year fixed mortgage is approximately 6.63%, while the 15-year fixed is around 6.03%. Rates remain in the mid-6% range as inflation concerns and elevated Treasury yields continue to influence mortgage pricing.
- Fed Watch: A new Reuters survey shows most economists still expect the Federal Reserve to hold rates steady for the rest of 2026. However, the number of economists expecting at least one additional rate hike has increased due to stubborn inflation and higher energy prices.
- Politics & Trade: Trade policy is back in focus after the announcement of new proposed tariffs on Canadian imports, adding another layer of uncertainty for markets already watching inflation closely.
- Oil & Geopolitics: Brent crude remains just below $90 per barrel as reports of possible diplomatic progress between the U.S. and Iran compete with ongoing regional tensions. Lower oil prices would be welcome news for inflation—but the situation remains fluid.
- Markets: Earnings season continues this week with major technology companies reporting. Investors will be watching whether strong corporate earnings can offset concerns about inflation, tariffs, and interest rates.
Market Analysis – What It Means
Today’s market has very little scheduled economic data, meaning geopolitical headlines, trade policy, and corporate earnings are likely to drive Treasury yields and mortgage pricing.
In plain English: Markets dislike uncertainty. Until investors gain more clarity on inflation, tariffs, and the Middle East, expect mortgage rates to remain choppy rather than trend sharply lower.
Market Analysis – Housing & Mortgage Strategy
This remains a structure-the-payment market.
The best conversations today are about:
Seller credits • Temporary buydowns • Permanent buydowns • Builder incentives • ARM options where appropriate • Future refinance opportunities
Affordability is still the biggest challenge—but creative financing continues to help buyers move forward.
Lock vs. Float
- Lock bias: If closing within 30 days, locking remains the prudent strategy while markets react to geopolitical and trade headlines.
- Float bias: Borrowers with longer timelines may benefit if inflation continues to moderate, but today’s uncertainty argues for close monitoring rather than complacency.
Today’s guidance:
Slight bias toward locking near-term transactions while remaining flexible on longer-term closings.
Stay safe and make today great!