Good Monday morning from your Hometown Lender. Here is your Monday morning market analysis!

Friday brought a big miss in the BLS jobs data, which helped bonds to rally and gave us better rate sheets for the day. Once the action was over, by the late morning, things settled down as expected, with traders gone for a summer weekend nothing of any merit really.

Rates this morning will likely be a little bit worse than Friday, but not by much, and it’s not likely that we see too much movement on the day. There’s nothing on the economic calendar for today, and not that much to pay attention to this week other than inflation data. On Wednesday, we get the CPI inflation data, and Thursday brings wholesale PPI inflation data.

Oil prices are back up a bit with Brent crude at $85 a barrel, and it doesn’t look like there’s much hope that the Strait of Hormuz will be open anytime soon, at least not without tolls or strings attached. Headlines: President Donald Trump is taking a bit of a different angle when it comes to putting pressure on Iran these days, now taking an economic point of view rather than military attacks. Expect some volatility when it comes to the situation in the Middle East, because as the outlook changes, so does its effect on oil and gas prices, as well as playing a role in bonds and therefore mortgage rates.

Without any guidance, we could see bonds continue to drift lower. As far as locking or floating loans closing in the next couple of weeks, you have to decide if you’re going to float into the CPI inflation data and hope for the best. That’s the only thing happening this week that is likely to help bonds improve, and even then, it’s not likely to cause rates to improve all that much.

Market Analysis: From a higher and better view:

Market Analysis: Quick Snapshot

10-Year Treasury: The 10-year is near 4.67%, up modestly this morning as bonds give back some of Friday’s jobs-report rally. Inflation is back in the driver’s seat this week.
Mortgage Rates: Daily national averages are approximately 6.76% for a 30-year fixed and 6.12% for a 15-year fixed. Freddie Mac’s latest weekly survey has the 30-year at 6.69% and the 15-year at 6.01%.
Jobs: Friday’s shock 23,000-job decline dramatically weakened the labor picture and reduced expectations for another near-term Fed hike. Today, however, markets are waiting to see whether inflation confirms—or ruins—that friendlier rate story.
Fed Watch: Markets now put the probability of a September rate hike around 44%–48%, down meaningfully after Friday’s employment report. The Fed remains stuck between a weakening labor market and inflation that is still too high.
Inflation — BIG Week: July CPI arrives Wednesday. Economists expect headline inflation around 3.4% YoY, with core CPI around 2.5%. PPI follows Thursday and retail sales Friday. Mortgage markets may need a seat belt this week.
Oil & Geopolitics: Brent crude jumped roughly 3% to around $86 as negotiations over reopening the Strait of Hormuz remain unresolved. Higher oil equals higher inflation risk—and bond traders know the equation well.
Markets: Stocks are mixed after recently reaching record levels as investors balance strong corporate earnings against oil, inflation and Fed uncertainty.
Politics: President Trump has renewed efforts to remove Fed Governor Lisa Cook, again raising concerns about political pressure on Federal Reserve independence. Separately, the Senate passed a short-term funding measure intended to avoid another government shutdown, although differences with the House still must be resolved.

Market Analysis: Why It’s Happening

The market is balancing two opposing stories:

Weak employment says “Fed, be careful.”
Inflation and higher oil say “Fed, don’t relax yet.”

In plain English: Friday helped mortgage rates. Wednesday’s CPI gets to decide whether we keep the gift receipt.

Market Analysis: What It Means for Housing

Affordability remains the challenge. Freddie Mac’s latest 30-year average is 6.69%, although inventory is improving and listing prices are showing more adjustment than we have seen in recent years.

This remains a structure-the-payment market:

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

Buyers have not disappeared—they have become much better mathematicians.

Lock vs. Float

Closing within 15 days: Lock bias. CPI on Wednesday creates substantial event risk.

15–30 days: Moderate lock bias, but borrowers with flexibility can cautiously float if they have a clearly defined ceiling.
30+ days: A managed float becomes more reasonable if Wednesday’s CPI confirms that inflation is cooling.

Today’s guidance:
Friday gave us better conditions. Don’t automatically assume Wednesday will give us more. Protect good pricing when it meets the borrower’s goals.

Stay safe and make today great!