𝗥𝗲𝗰𝗮𝗽 𝗼𝗳 𝗹𝗮𝘀𝘁 𝘄𝗲𝗲𝗸: 𝗥𝗮𝘁𝗲𝘀 𝗶𝗺𝗽𝗿𝗼𝘃𝗲𝗱
Mortgage rates improved significantly last week ahead of the Veterans Day holiday weekend. This is due to the newest CPI inflation report showing inflation had decreased much more than was expected. Last week mortgage experts said that only a drop inflation would support rates showing improvement and that is exactly what happened. We were concerned the report could have actually pushed rates higher, so this was a welcome surprise.
Bottom line: lenders dropped rates like we haven’t seen before, most dropping .5% and some even more!
𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗥𝗮𝘁𝗲 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁: 𝗥𝗮𝘁𝗲𝘀 𝘀𝗵𝗼𝘂𝗹𝗱 𝗿𝗲𝗺𝗮𝗶𝗻 𝗹𝗼𝘄𝗲𝗿
This week we expect mortgage rates to hold onto the improvements we saw from last week, the first significant rate improvements we have seen in months. However, markets have proven to be volatile the last few months, so it is suggested you stay in contact with your lender regularly. Mortgage bonds are down about -30bps this morning but that is still about +30bps better than the worst levels. The -30bps may seem like a lot, but mortgage bonds improved by about +200bps ahead of the long weekend, so this would actually be classified as normal pullback after such huge gains, not to mention that the rest of the world markets were open during Veterans Day so we are just now catching up. Reprice risk on the day is low, it is unlikely we see bonds spiral out of reach today and put more lenders in a position to reprice worse. The big question now is where do rates go from here?
𝗪𝗵𝗮𝘁’𝘀 𝗮𝗳𝗳𝗲𝗰𝘁𝗶𝗻𝗴 𝗿𝗮𝘁𝗲𝘀 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸:
– Economic data: Wholesale inflation data on Tuesday could play a small role in mortgage rates this week, and although we will get housing data this week it isn’t likely to affect rates.
– The Fed: We will have more Fed members speaking this week, and if they signal higher Fed policy rates are likely we could see some adverse effect on mortgage rates.
Show me today's rates (Dec 1st, 2023)
Verify your mortgage eligibility (Dec 1st, 2023)
The UMBS 5.5 coupon (MBS or mortgage backed securities) at 100.36 and down -36bps on the day. That’s much better though than the -60bps we saw at the initial open. We could see bonds improve further through the day.
The 10yr Treasury yield at 3.87, and has room to improve before hitting technical resistance at the 50-day moving average of 3.81
Show me today’s rates (Nov 14th, 2022)