Good Tuesday morning from your Hometown Lender. Let’s dive into today’s market analysis!

Yesterday saw bonds start the day with some stellar gains, with the 10yr yield dropping back below 4.70 and mortgage bonds recovering most of Friday’s losses. Bonds held the gains through the day, even managing to improve further late in the day.

The Jolts employment report out this morning shows less jobs are available than anticipated. Rates today are a bit better, with pricing that should be about the same as last Thursday before Friday’s meltdown. Treasury Secretary Scott Bessent says that a deal could happen today or tomorrow to open the Strait of Hormuz that would allow commercial ships to move freely through the strait.

If a deal does happen, hopefully we see oil drop further, which will also help rates improve a bit. So, with little risk today and a potential to see more improvement today or tomorrow, float.

Market Analysis – From a higher and better view:

Market Analysis – Quick Snapshot

• 10-Year Treasury: The 10-year yield is hovering near 4.70%. Longer-term yields remain elevated as investors weigh persistent inflation risk and increased Treasury borrowing needs. Bonds are having one of those mornings where every headline feels personal.
• Mortgage Rates: Today’s national averages are approximately 6.80% for a 30-year fixed and 6.15% for a 15-year fixed. Rates remain slightly below 7%, but affordability continues to be the primary obstacle for many buyers.
• Labor Market: June job openings declined by 178,000 to 7.359 million, slightly below expectations. Hiring increased to 5.348 million, while layoffs remained low at roughly 1.77 million. The labor market is best described as “slow hire, slow fire”—cooler, but not collapsing.
• Fed Watch: The Federal Reserve held its benchmark rate at 3.50%–3.75% last week, although three policymakers preferred a quarter-point increase. Today’s softer job-openings report supports patience, but inflation remains the Fed’s larger concern.
• Oil & Geopolitics: Oil reversed sharply lower today as Qatar and U.S. officials expressed optimism about a possible agreement involving Iran and the Strait of Hormuz. Brent fell toward $80 per barrel, while WTI dropped near $76. Encouraging—but geopolitical optimism can have a very short shelf life.
• Markets: The S&P 500 and Dow reached record territory as strong corporate earnings and hopes for Middle East de-escalation supported investor confidence. Technology and AI-related companies continue to lead the market.
• Fiscal Policy: The Treasury increased its third-quarter borrowing estimate to $739 billion, $68 billion above its May projection. Tomorrow’s refunding announcement will be watched closely for changes in longer-term debt issuance, which could influence Treasury yields and mortgage pricing.

Why It’s Happening

Markets are balancing:

Lower oil prices + softer job openings + strong corporate earnings + heavy government borrowing.

In plain English: Inflation pressure improved today, but bond investors still have plenty to worry about.

Market Analysis – What It Means

The decline in job openings is moderately supportive of bonds because it suggests labor demand is cooling without a major increase in layoffs.

However, mortgage rates may struggle to improve substantially while inflation remains elevated and the government continues issuing large amounts of Treasury debt.

Housing & Mortgage Strategy

This remains a structure-the-payment market.

The most productive conversations include:

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

Buyers have not disappeared. They are calculating—and the transaction often depends on whether we can create the right monthly payment.

Market Analysis – Lock vs. Float

• Closing within 30 days: Moderate lock bias. Rates remain elevated, but today’s lower oil prices and softer labor data could create modest improvement.
• Closing beyond 30 days: A cautious float may be considered, with tomorrow’s Treasury announcement and Friday’s employment report presenting meaningful event risk.

Today’s guidance:
Use market improvements strategically. A better rate sheet is an opportunity—not a guarantee that the next one will be better.

Stay safe and make today great!