Good Tuesday am from your Hometown Lender. Let’s get to today’s market analysis. It’s going to get busy from here on out!

Bonds drifted lower in price most of yesterday putting pressure on rates. Bonds are recovering about 60% of what was lost yesterday so far which is a good place to be.  Oil is still hovering near $90 a barrel for Brent crude, and the headlines aren’t very favorable.

The U.S. and Iran talks are ongoing with no end in sight and now, are trading reparation demands. Pakistan’s Defense Minister seems to think things are better than they appear and says the U.S. and Iran are close to some sort of arrangement over the Strait of Hormuz, even though both sides still look like they’re staring each other down.

At the end of the day, markets don’t seem to be buying the optimism, as reflected in oil prices.

Tomorrow is a big data day with the CPI inflation report. Last month, the data came in much better than expected, which gave bonds a real boost and helped rate sheets improve quite a bit for a couple of days. However, this time it’s unlikely we see quite the same effect for a few reasons. This report will reflect July’s data, when the ceasefire was broken and oil prices started pushing higher again, leading to higher energy costs and gas prices. Markets are also concerned that inflation will continue to be an issue, especially with oil prices still high.

The challenge is the report comes out before the market opens tomorrow so we have to make a choice to lock now or take on the risk. My vote is to always lock and float down on any improvement.

Market Analysis – From a higher and better view:

Market Analysis – Quick Snapshot

• 10-Year Treasury: The 10-year Treasury is trading around 4.7%, after recently touching 4.75%, while the 30-year Treasury has pushed above 5.20%. Long-term yields remain stubbornly high as investors wrestle with inflation, oil, federal borrowing and questions surrounding Fed policy. Apparently, the bond market has decided “higher for longer” needed a sequel.
• Mortgage Rates: Today’s national averages are approximately 6.78% for a 30-year fixed and 6.14% for a 15-year fixed. Freddie Mac’s latest weekly survey showed 6.69% and 6.01%, respectively.
• Housing — Fresh This Morning: July existing-home sales fell 1.7% to a 4.06 million annualized pace. Inventory declined to 1.54 million homes, representing 4.6 months of supply, while the median price remained roughly 2% above last year. First-time buyers represented only 29% of transactions.
• Inflation — Tomorrow Is the Big One: July CPI arrives Wednesday at 5:30 a.m. Pacific. Economists expect headline CPI around 3.4% YoY and core CPI near 2.5%. This is arguably the biggest mortgage-rate event of the week.
• Fed Watch: The Fed remains divided after holding its benchmark rate at 3.50%–3.75% in July, with three policymakers preferring a hike. Atlanta Fed interim President Cheryl Venable said today that inflation remains too high and that the outlook depends heavily on what happens with Middle East energy prices.
• Oil & Geopolitics: Brent crude is near $88 per barrel and WTI around $82 as U.S.–Iran negotiations remain uncertain and shipping through the Strait of Hormuz stays severely disrupted. Before the war, roughly 20% of global oil supply flowed through Hormuz—so this remains an inflation story as much as a geopolitical one.
• Markets: Stocks are mixed as investors balance strong corporate earnings against higher oil prices, elevated bond yields and tomorrow’s CPI. The Dow is modestly higher while the S&P 500 and Nasdaq are roughly flat to lower.
• Politics & the Fed: President Trump continues pushing publicly for lower rates, while markets remain sensitive to concerns about Federal Reserve independence and whether political pressure could undermine confidence in inflation policy. Ironically, pushing too hard for lower short-term rates can actually send long-term Treasury yields—and mortgage rates—higher if investors fear more inflation.

Why It’s Happening

Markets are balancing an unusual combination:

Weak employment + stubborn inflation + $88 oil + political pressure on the Fed + elevated long-term Treasury yields.

In plain English: The economy gave bonds weaker jobs data Friday. Tomorrow, inflation gets a chance to either confirm the gift—or return it.

Market Analysis – What It Means for Housing

Today’s existing-home-sales report reinforces the affordability story.

Sales fell again, yet prices remain firm because inventory is still limited. Buyers have not vanished—they are simply struggling with the combination of high prices + mortgage rates near 6.8%.

This remains a structure-the-payment market:

Seller credits • Temporary/permanent buydowns • Builder incentives • Strategic ARM options • Debt consolidation • Future refinance planning

The opportunity for agents and lenders is increasingly about solving affordability rather than waiting for affordability to solve itself.

Lock vs. Float

Closing within 15 days: Strong lock bias. CPI tomorrow morning creates major binary event risk.

• 15–30 days: Moderate lock bias. A carefully managed float may be reasonable only if the borrower understands the downside and has a clearly defined lock ceiling.
• 30+ days: More flexibility—but tomorrow’s CPI will likely determine the next short-term trend.

Today’s guidance:
Do not gamble a good transaction on one inflation report. Protect good pricing when it meets the borrower’s objectives.