Good morning on this best day of the week, Wednesday, from your Hometown Lender. Here is today’s market analysis!
Rate sheets yesterday continued to worsen, matching the worst levels of the year. The losses came early, showing up on those morning rate sheets, and then bonds settled down on the day. Rates are continuing to creep up, and today’s rate sheets will likely reflect the worst rates of the year, albeit they won’t be too much worse than yesterday if bonds hold the current levels. Oil prices are moving higher, and with the Houthis blocking the Bab el-Mandeb Strait in the Red Sea along with Iran attacking ships in the Strait of Hormuz, we can expect them to continue to move higher. Higher oil will mean worse rates.
Market Analysis – From a higher and better view:
Market Analysis – Quick Snapshot
- Bonds: The 10-year Treasury is trading around 4.63%, near a two-month high, as surging oil prices continue to fuel inflation concerns. With little economic data on today’s calendar, the bond market is taking its cues from global events.
- Mortgage Rates: Mortgage rates remain elevated. The Mortgage Bankers Association reported the average 30-year fixed mortgage rose to 6.69%, the highest level since August 2025, while daily consumer surveys show rates around 6.61%.
- Fed Watch: Markets still expect the Federal Reserve to hold rates at its next meeting, but expectations for another rate hike later this year have increased as higher energy prices threaten to keep inflation elevated.
- Oil & Geopolitics: Brent crude is trading near $94–95 per barrel as conflict involving Iran continues to disrupt energy markets. Higher oil prices increase inflation pressure and make it more difficult for mortgage rates to improve.
- Markets: Investors are watching earnings from major technology companies, including Alphabet and Tesla. Strong earnings could support stocks, but higher oil prices and interest rates remain the dominant themes for financial markets.
- Housing: Purchase activity remains resilient despite higher borrowing costs, but affordability continues to challenge first-time buyers as financing costs remain near their highest levels of the past year.
Market Analysis – What It Means
Today’s market is being driven more by geopolitics than economics. Rising oil prices are keeping inflation concerns alive, which in turn is limiting any meaningful improvement in mortgage rates.
In plain English: Good inflation reports helped briefly, but higher energy prices are reminding investors that the fight against inflation isn’t over.
Market Analysis – Housing & Mortgage Strategy
This remains a structure-the-payment market.
Today’s best conversations are about:
✔ Seller credits
✔ Temporary and permanent buydowns
✔ Builder incentives
✔ ARM options (when appropriate)
✔ Planning today with the opportunity to refinance later
The right financing strategy often creates more savings than waiting for the “perfect” rate.
Lock vs. Float
- Lock bias: If closing within the next 30 days, locking remains the prudent approach given elevated Treasury yields and geopolitical uncertainty.
- Float bias: Borrowers with longer timelines may benefit if inflation resumes its downward trend, but oil prices remain the biggest wildcard.
Today’s guidance:
Slight bias toward locking until inflation pressures from energy markets begin to ease.
Stay safe and make today great!