Good Thursday AM from your Hometown Lender. What can we glean from today’s market analysis?
Yesterday was brutal and with no data to support the beating. Yes, PMI was stronger than expected but not to the tune of 85basis point move in MBS.
Today’s yields are the second highest in 19 years, but still… this morning’s price action is better than a sharp stick in the eye. Bonds held almost perfectly flat in the overnight session and Fed rate expectations tempered yesterday’s exuberance a bit (hence, 2yr yields are down 3-4bps more than 10yr yields).
The refreshing part of the market analysis is that we’re seeing modest gains despite oil prices being a few bucks higher. In other words, oil gave bonds an excuse to keep losing ground this morning, but instead, we’re modestly stronger. None of today’s data has the same “shoot the moon” potential as did yesterday’s PMIs, and the market would hesitate to draw overly dire conclusions even if today’s 7yr Treasury auction is bumpy. For the most part, we’re waiting for next week’s econ data.
Market Analysis –From a higher and better view:
The economy keeps showing resilience. Unfortunately, mortgage rates have interpreted that as permission to keep climbing. Great work ethic. Terrible timing.
๐ Market Analysis -Quick Snapshot
- 30-year fixed: 7.37%, up 0.11 percentage points.
- 15-year fixed: 7.00%.
- 30-year jumbo: 7.50%.
MNDโs published national benchmarks dated September 24. - 10-year Treasury: Approximately 5.15%.
- Mortgage bonds: UMBS 6.0 down roughly 0.22 price points, adding pressure to lender pricing. Intraday figures; subject to change.
- Stocks and oil: Major stock indexes slipped as Middle East uncertainty pushed oil higher, with Brent above $100.
๐ฆ What Hit This Morning
Initial unemployment claims fell to 197,000, below the 201,000 expected. Layoffs remain low, although holiday-related seasonal adjustments warrant caution. Continuing claims edged up to 1.719 million, reminding us that low layoffs do not necessarily mean easy hiring.
Fed takeaway: A firmer labor market gives policymakers room to prioritize inflation. Following last weekโs increase to a 3.75%โ4.00% policy-rate range, the Fed has signaled that additional increases may follow. Todayโs data offers little reason to expect quick relief.
๐ Politics With a Price Tag
Treasury Secretary Scott Bessent says the U.S. and China agreed to extend their trade truce by two months, providing more time to negotiate a broader agreement as Trump and Xi meet today. That reduces an immediate deadline risk, but major questions around tariffs, agricultural purchases and critical minerals remain.
Meanwhile, uncertain progress toward resolving the Iran conflict continues to affect energy markets. Higher energy costs can sustain inflation pressureโand make lower borrowing costs harder to achieve.
๐ Market Analysis -Housing & Mortgage Reality
Freddie Macโs weekly 30-year average is 7.03%, versus MNDโs daily 7.37% benchmark. Different survey methods and timing explain why mortgage headlines can disagree. Your actual loan pricing matters more than either headline.
๐ก What the Market Analysis Means
- Buyers: Update payment estimates before submitting offers.
- Agents: Compare seller credits, permanent buydowns and price reductions using the buyerโs actual financing.
- Homeowners: Base refinancing decisions on savings after costs and your expected holding period.
๐ Lock vs. Float
- Within 15 days: Strong locking bias.
- 15โ30 days: Favor protecting a workable payment.
- Beyond 30 days: Float only with a clear risk limit and a plan to act if pricing worsens.
A good financing plan should work with todayโs payment. Future rate relief should be a benefit, not a requirement.rement.
Stay safe and make today great!