Good Morning on this fantastic and best day of the week, Wednesday,

Bonds are continuing a slow and steady climb back to where we want them. The 10-yr is at .66% and Mortgage bonds have gapped up 20bps. We are not back to where we were just a week and a half ago, but we are about 40% there. If we can hold and close above the current levels, it will be a good sign and keep the rally intact. The only news so far this morning was Mortgage apps, which declined 3.2%, no big surprise there after 75% of loans are refinances and Fannie and Freddie raised fees by 50bps on those loans. Later today we will get the FED minutes from their last meeting. The minutes can often offer a deeper understanding of where the Fed stands and can, at times, move markets. I feel safer floating today, but watch carefully.

Is this a foreshadow of what lays on the horizon? I don’t think so at this point, but it is a bit curious that The Federal Housing Administration’s mortgage program, viewed by many as the most affordable path to homeownership for many first-time buyers, minorities, and low-income Americans, has the highest delinquency rate in at least four decades. The share of late FHA loans rose to almost 16 percent in the second quarter, up from about 9.7 percent in the previous three months and the highest level in records dating back to 1979. The reasoning is simple: millions of Americans stopped paying their mortgages after losing jobs in the coronavirus crisis. Those on the lower end of the income scale are most likely to have FHA loans, which allow borrowers with shaky credit to buy homes with small down payments.

Please remain safe and stay healthy, make today great!