Good morning on this best day of the week, Wednesday, from your Hometown Lender. Let’s dig into today’s market analysis and reactions.

Some good insight from Matt Graham this morning: Bonds lost ground overnight with rising oil prices correlating very well with the higher yields. The selling was minimal and yields remained range bound until roughly 945am ET. While there was slight additional pressure from another little pop in oil prices, the main bad actor was a surprisingly strong reading in S&P PMI data. This series typically goes unnoticed unless it wildly beats/misses forecasts. This morning’s results were on the wild side with both services and manufacturing hitting the highest levels in years. Bonds reacted immediately with 10yr yields jumping from 5.0% to over 5.04% almost instantly. Fed Funds futures lurched to price in even stronger odds of a second rate hike at the next meeting and 2 hikes by December (over a 50% chance now). 

Market Analysis – From a higher and better view:

Yesterday’s rate relief came with a short expiration date. Stronger economic data and rising oil prices are putting bonds under pressure this morning. Apparently, the market skipped the decaf.

📊 Market Analysis – Quick Snapshot

• 30-year fixed: 7.17%
• 15-year fixed: 6.83%
  MND’s latest completed daily benchmarks, September 22.
• 10-year Treasury: Approximately 5.07%, up about 10 basis points this morning.
• Mortgage bonds: UMBS 6.0 down approximately 0.52 price points, putting upward pressure on mortgage pricing. This is a bond-price change, not a half-point increase in mortgage rates.
• Brent oil: Approximately $101.62, up 2.4%; stocks are trading lower. Intraday figures, subject to change.

🏦 Market Analysis – Economy & Fed Watch

September’s preliminary U.S. Composite PMI—a survey of manufacturing and service-sector activity—jumped to 58.4 from 56.0, its strongest reading since July 2021. Stronger business activity and building inflation pressure make a quick retreat in borrowing costs harder to justify.

Fed Governor Michael Barr said today that further rate increases will likely be needed. The message: the inflation fight remains unfinished. Mortgage rates respond to bond markets and inflation expectations; they do not move mechanically with the Fed’s policy rate.

🏠 Housing Check

Today’s MBA report showed the average 30-year mortgage rate reached 7.12% for the week ending September 18, while overall applications fell to a 15-month low. ARMs represented 9.8% of applications as borrowers sought lower initial payments. That weekly survey differs from MND’s daily benchmark above.

🌎 Political Backdrop

China’s President Xi is expected in Washington today, with trade-truce discussions, AI policy and Taiwan on the agenda. Meanwhile, U.S.–Iran negotiations remain a major influence on oil. Progress could ease energy pressure; setbacks could renew it. Diplomacy now has a seat at the mortgage-pricing desk.

💡 Market Analysis – What It Means

Buyers: Refresh payment estimates before making an offer. Agents: Compare seller credits, buydowns and price reductions using actual numbers.

Homeowners: Evaluate refinancing against a clear savings target, including costs. Any ARM strategy should account for future adjustments and the possibility that refinancing won’t be available.

🔒 Lock vs. Float

• Closing within 15 days: Strong locking bias.
• 15–30 days: Favor protecting an affordable payment.
• Beyond 30 days: Float only with a defined risk limit and regular pricing reviews.

Let’s build the financing around your goals—and a payment that works without requiring the market to cooperate.

Stay safe and make today great!