Good Tuesday AM from your Hometown Lender. Here’s today’s market analysis for your perusal!
Bonds ended the day in the green yesterday (in positive territory that helps rate sheet pricing improve) but did lose a bit of ground as the afternoon wore on. Today, rates will continue to improve a little bit at a time.
Now that there is a resolution in the Middle East, it will allow markets to focus on other things, like this week’s Fed meeting. The meeting starts today, but it’s tomorrow’s conclusion with the Fed policy statement and Fed Chair Kevin Warsh’s press conference that will move markets.
Today should be a quiet day with little real movement in bonds as markets wait to see what tomorrow brings.
Market Analysis – from a higher and better view:
Market Analysis – Quick Snapshot
Bonds: The 10-year Treasury is holding in the mid-4.4% range as markets balance lower oil prices, hot inflation, weak housing data, and the start of the Fed’s two-day meeting. Bonds are calmer — not zen, but at least not throwing furniture.
Mortgage Rates: Daily tracking shows the 30-year fixed around 6.59% and the 15-year fixed around 5.95%. Freddie Mac’s latest weekly survey showed the 30-year fixed at 6.52% and the 15-year fixed at 5.84%.
Fed Watch: The Fed begins its June meeting today and is widely expected to hold the current 3.50%–3.75% target range. The key question is whether the Fed removes its easing bias and sounds more hawkish because inflation remains too high.
Housing: May housing starts fell sharply, with overall starts down 15.4% to a 1.177 million annualized pace. Single-family starts hit an eight-month low as high mortgage rates, building costs, and weak demand continue to pressure builders.
Inflation: Import prices rose 1.9% in May and 6.7% year over year, lifted by fuels and capital goods. That keeps inflation risk alive, even with oil prices easing after the U.S.–Iran framework.
Market Analysis – What It Means
Today’s market is a mix of relief and caution. Lower oil helps the inflation story, but housing is weakening, import prices are still hot, and the Fed is not ready to declare victory.
In plain English: the market got a little breathing room, but buyers still need a payment plan.
Market Analysis – Housing & Mortgage Strategy
This remains a structure-the-payment market.
The best conversations right now are about:
Seller credits, temporary buydowns, permanent buydowns, builder incentives, ARM options where appropriate, and a realistic refinance plan if rates improve later.
Buyers are still active, but they are doing math. Sellers and builders who help solve the monthly payment problem have the best chance of turning interest into contracts.
Lock vs. Float
Lock bias: If closing within 30 days, the borrower is payment-sensitive, or the file is tight, locking remains the cleaner recommendation.
Float bias: Floating only makes sense with time, flexibility, and a clear trigger. The Fed meeting can move bonds quickly, especially if the statement or press conference leans hawkish.
Today’s guidance:
Bias toward locking short-term closings. For longer timelines, cautious floating may be reasonable only with a clear risk ceiling and a plan before tomorrow’s Fed announcement.
Stay safe and make today great!