Good Monday AM from your Hometown Lender,

Last Friday at 1pm, all expected that with limited economic data on the calendar, markets this week would be stable to improving. At 1:01, that changed when Moody’s dropped the mic after the closing bell and downgraded the US credit rating by one notch. In fairness, not only was it appropriate but also, Moody’s was the last holdout to cut the rating. They were lagging hoping for improvement in our debt load when everyone else knew was going to continue in the wrong direction. The other rating agencies had cut our credit rating two years ago.

What that means is that there may be a marginal higher cost to getting investors (both public and private) to buy US debt.

That was the initial reaction but since then, markets seem to have calmed down quite a bit. The 10yr note has worsened to 4.49% which is well off the high from this AM of 4.56%. Mortgage bonds have flattened out on the day from opening down more than .375. From a technical trading perspective, the charts are not in our favor despite today’s bounce. We are in a rising yield trajectory and that won’t be broken until the 10-yr gets back below 4.37%. We were almost there Friday.

It is tough to not lock in a rising rate environment. You can always float down on improvement.

Did you know that Maricopa County led the nation in new housing built in 2024, according to Census data released on May 15? The county added 38,310 housing units last year, beating out Los Angeles County and Harris County, Texas, which both added about 32,000 units.

Stay safe and make today great!