Good morning on this best day of the week, Wednesday from your Hometown Lender,

Rates are a bit better than yesterday, despite mortgage bonds starting the day a bit in the red.

Rates have slowly but steadily improved from May 21st, now about a quarter point better than then. In that time the 10-yr yield has dropped from 4.60 to around 4.30, and mortgage bonds have improved about +150bps. Although it wouldn’t surprise me to see bonds give back some gains today, the door is open for rates to improve a bit further because markets are optimistic for bonds. The Treasury has signaled it won’t be flooding the market with long-term debt anytime soon, despite the coming passage of the big beautiful bill. Inflation is cooling, and even if it does tick up next month markets are likely to perceive it as transitory. Fed members are coming out calling publicly for rate cuts, and even Powell is starting to show signs of cracking. Right now, although we will see a bad day here and there, there is little risk of rates rising.

Yesterday Fed Chair Jerome Powell had his testimony in front of the House Financial Services Committee, and today will be in front of the Senate Banking Committee. The big takeaway from yesterday is that markets think a July cut may be on the table, and a September cut is almost a given. Powell is trying to keep the genie in the bottle, but still seemed more open to admitting cuts are coming than in the past. Powell said, “if it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn’t want to point to a particular meeting.” This sentiment won’t make this week’s PCE inflation data more important, but it will keep an emphasis on next month’s CPI inflation data.

Here is some good news for consumers.

The U.S. House of Representatives has passed the bipartisan Homebuyers Privacy Protection Act (HR 2808), a bill that would reduce the number of unwanted calls and messages potential homeowners across the country experience during the homebuying process. 

Credit bureaus are typically notified when a consumer applies for financing, and that information (which is commonly referred to as a “trigger lead”) is then often sold by credit bureaus to data brokers (including other lenders) without the consumer’s knowledge or approval. Consumers are then often bombarded with hundreds of unwanted solicitations. 

According to National Association of Mortgage Brokers (NAMB) President Jim Nabors: “It is not unusual for bank customers to receive 100+ misleading texts, phone calls and emails within the first 24 hours of applying for a mortgage and the passage of this bill will go a long way in relieving this burden to homebuyers.” 

The Senate passed a slightly different version of the bill (S.1467) led by U.S. Sens. Jack Reed and Bill Hagerty earlier this month to crackdown on unfair and deceptive lending practices. 

Stay safe and make today great!