Hello! Hope your Friday is going well!
Mortgage rates are still in a gradual recovery phase after the sharp increase we saw two weeks ago. While last week offered some encouraging signs of improvement with a steady downward trend, the current week began with a bit of a wobble. We saw an upward bump in rates on Monday. However, since that initial setback, the market has thankfully stabilized, and we've seen a more consistent pattern.
Next week is packed with news that could move markets and mortgage rates. Monday is quiet. Tuesday has some less important data. Wednesday is big, with the first look at how the economy did last quarter (GDP) and the inflation report the Federal Reserve watches closely. Thursday brings a manufacturing report, and Friday has the key monthly jobs numbers.
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Last Updated: 4/25/25
Friday's bond market has opened in positive territory despite unfavorable economic news. Stocks are mixed with the Dow down 127 points and the Nasdaq up 74 points. The bond market is currently up 7/32 (4.29%), which with gains late yesterday should improve this morning's mortgage rates by approximately .250 of a discount point.
Yesterday's 7-year Treasury Note auction didn't go as well as Wednesday's 5-year Note sale. The benchmarks showed investors were more interested in the 5-year Notes than the 7-year Notes, revealing an average demand compared to other recent sales of the same securities. It is unlikely that yesterday's afternoon bond strength is related to the auction results, but we did see a favorable move shortly after they were announced at 1:00 PM ET. We feel it is more or less a coincidence and are labeling the auction as neutral for rates.
The University of Michigan released their revised Index of Consumer Sentiment for April at 10:00 AM ET this morning. They announced a reading of 52.2 that was higher than expected and an increase from the preliminary estimate of 50.8 earlier this month. The increase means surveyed consumers felt better about their own financial and employment situations than they did previously. This is a sign of potential economic strength because rising confidence usually translates into stronger consumer spending that makes up over two-thirds of the U.S. economy. Accordingly, today's reading is bad news for bonds and mortgage rates.
Next week has plenty scheduled that is likely to influence the markets and affect mortgage rates. It starts light with nothing of importance scheduled for Monday and then begins to get interesting with some moderately important data Tuesday. Wednesday begins the highly important economic releases. This is when we will get the initial Gross Domestic Product (GDP) reading for the 1st quarter and the report that includes the Fed's preferred inflation data. Thursday follows with the ISM manufacturing index before the almighty monthly Employment report Friday morning. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
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Hello! Wishing you a wonderful weekend and a happy Easter!
Mortgage rates saw decent improvement early this week, recovering from a 2-month high last Friday. While market volatility has eased since last week, continued uncertainty around fiscal policy suggests remaining watchful for potential rate swings.
Next week brings reports on how much people are buying, how factories are doing, the housing market, and how many people are losing jobs. Plus, the Federal Reserve will share its view of the economy and several Fed officials will talk. These reports and talks could make interest rates and the bond market move around a bit, especially if the news is surprising or if the Fed hints at changing its plans.
Last Updated: 4/17/25
Thursday's bond market has opened in negative territory following conflicting economic news. Stocks are mixed with the Dow down 386 points and the Nasdaq down 37 points. The bond market is currently down 2/32 (4.28%), but strength late yesterday should allow this morning's mortgage rates to be lower than Wednesday's early pricing by approximately .125 of a discount point.
Yesterday's 20-year Treasury Bond auction didn't go as well as last week's 10-year and 30-year sales did. The benchmarks of this week's auction showed an average demand from investors compared to other recent sales. Bonds showed little reaction when results were posted at 1:00 PM ET. They had already improved prior to the results announcement and moved again late in the day, but it was not due to the auction.
Fed Chairman Powell's speaking engagement in Chicago didn't give us any major surprises, basically reiterating what he said a couple of weeks ago. He repeated that the Fed is no hurry to start cutting key short-term interest rates, that they need to wait for better clarity on how President Trump's tariffs and other policies are going to affect the economy and inflation before making another move. Bonds did extend their afternoon gains slightly during and after his discussion. If you saw an afternoon improvement in rates, it likely was not solely because of his words even though what he said was enough for some lenders to make an intraday revision.
There were two early morning economic releases this morning. First was March's Housing Starts data that showed new home groundbreakings fell a larger than expected 11.4% last month to signal weakness in the new home market. Starts of single-family homes that are more relevant to residential mortgage rates declined 14.2%. As a sign of economic weakness, this data is favorable for mortgage rates. However, this particular report does not carry a high level of importance in the markets, preventing a better reaction in the bond market.
Last week's unemployment update revealed the number of new claims for jobless benefits dropped by 9,000 from the previous week's revised 224,000 initial filings. The 215,000 number fell short of the 225,000 that was predicted and shows strength in the employment sector. Therefore, we have to label the report bad news for bonds and mortgage pricing.
We have an early close in the bond market today and a full trading session for stocks. The bond market will close at 2:00 PM ET ahead of tomorrow's Good Friday holiday and will reopen Monday morning. Stocks are closed tomorrow. Don't be surprised to see a little weakness in bonds this afternoon as investors look to protect themselves from headlines over the extended weekend. If bonds lose ground this afternoon, we may see a small upward revision in rates before the end of the day.
Since there is no relevant data or other related events scheduled for tomorrow and the markets are closed, there will not be an update to this report. We would like to wish all of our readers a wonderful holiday weekend!
Hello! I hope you have a great weekend and enjoy the beautiful weather!
This week was extremely volatile for financial markets, including U.S. bonds. Bonds experienced the largest week-over-week rise in 10-year yields since 1981, a development that pushed mortgage interest rates higher.
Next week is calm at first with only a couple of Fed speeches on Monday and Tuesday. Wednesday kicks off with the important Retail Sales report, a Treasury auction, and a speech by Fed Chair Powell. Corporate earnings season also begins; while earnings mostly affect stocks, they can sometimes influence bond trading and mortgage rates.
Last Updated: 4/11/25
Friday's bond market has opened sharply weaker despite clearly bond-friendly economic news. Stocks are showing early gains of 95 points in the Dow and 105 points in the Nasdaq, but who knows if they will hold or not. The bond market is currently down 22/32 (4.51%) after a sizable sell-off late yesterday. Due to those losses, this morning's mortgage rates should be considerably higher than Thursday's early pricing. The change in rates between midday yesterday and this morning should be somewhere in the neighborhood of .875 – 1.125 of a discount point.
Yesterday's 30-year Treasury Bond auction followed suit of Wednesday's 10-year Note sale by drawing a strong demand from investors. We saw a good reaction to the 1:00 PM ET results announcement with bonds improving immediately after. However, bond prices were already well off of their morning highs before results were posted and shortly after, they resumed the negative momentum that led to many lenders making an upward revision to mortgage pricing. In other words, the auction itself was good news for rates by theory, but didn't carry enough importance to offset the unfavorable environment in the market.
This morning's release of March's Producer Price Index (PPI) revealed wholesale inflation was also much softer than expected, just as we saw with yesterday's consumer inflation data. It showed a 0.4% drop in March's overall PPI and a 0.1% decline in the more important core reading that excludes volatile food and energy costs. Analysts were expecting to see increases of 0.2% and 0.3% respectively. As with the CPI, even better news came in the year-over-year numbers. The overall reading fell from February's 3.4% to 2.7% last month and core data went from a 3.6% annual pace down to 3.3%. These numbers verify inflationary pressures were falling before the tariff issue arose. It appears that traders are much more concerned about what the future will bring after the impact of the tariff war starts to appear in the inflation data than they are of looking backward.
More favorable economic data came in the University of Michigan's Index of Consumer Sentiment for April at 10:00 AM ET. They announced a reading of 50.8 that was down considerably from March's 57.0 and much lower than forecasts. This was the lowest reading of consumer confidence in their own financial situations since June 2022 and the second lowest on record, which goes all the way back to 1952. Waning confidence is relevant because as consumers grow more worried about their own financial situations, they are likely to cut back on spending and delay large purchases. Since consumer spending makes up over two-thirds of the U.S. economy, this is a sign the economy may be weakening in the near future. Unfortunately, even though this report is very good news for bonds by theory, it is being ignored as traders are focused on other factors.
Next week starts off fairly light with just a couple of Fed-member speeches scheduled Monday and Tuesday. Economic reports begin Wednesday morning with the release of the highly important Retail Sales report that tracks consumer spending. There is also another Treasury auction and speaking engagement by Fed Chairman Powell midweek that will draw plenty of attention. We are also heading into corporate earnings season that is much more relevant to stocks than bonds, but as we saw recently, stocks do sometimes influence bond trading and mortgage rates. It will be a holiday-shortened week due to the Good Friday holiday. Look for details on all of next week's activities in Sunday evening's weekly preview.
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Lock if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
Hello, I hope all is well and you’re staying busy!
In March, the U.S. added 228,000 jobs, surpassing expectations, with unemployment slightly up at 4.2%. Despite strong job growth, recent tariff announcements have heightened economic uncertainty, leading to a decline in mortgage rates.
Next week will be quieter for economic news compared to this week. However, we'll still get important updates on inflation, government bond sales, and the notes from the Federal Reserve's last meeting. Things will be slow until Wednesday, so any news about trade tariffs could significantly impact the markets before then.
Last Updated: 4/4/25
Friday's bond market has opened up sharply again as the global markets are still responding to Wednesday afternoon's tariff announcements and now other country responses. Stocks are posting significant losses with the Dow down another 1,232 points after losing 1,679 points yesterday. The Nasdaq is in deja vu mode also, adding a loss of 645 points on top of yesterday's 1,050 point loss. The bond market is currently up 23/32 (3.93%) to break below the 4.00% level for the first time since early October of last year. This should leave this morning's mortgage rates approximately .250 of a discount point lower than Thursday's early pricing.
We did get some major economic data this morning when March's Employment report was released at 8:30 AM ET. It revealed the U.S. unemployment rate rose 0.1% to 4.2% while 228,000 new jobs were added to the economy. Forecasts had the unemployment rate holding at February's 4.1% and only 130,000 new payrolls. Average earnings pegged expectations of up 0.3%. These readings are mixed with the higher unemployment rates being good news for bonds and the payroll number being unfavorable. A noticeable downward revision to February's payroll number is helping to offset the surprise March number, but the truth is that the markets are trading almost exclusively on tariff news.
The markets were set to open as they closed Thursday (stocks down and bonds up) prior to this morning's announcement from China that they were imposing a 34% retaliatory tariff on all goods imported from the U.S. However, the losses in stocks got much bigger once the news hit the wires, leading to bonds extending their overnight gains. To further add to the volatility, a tweet from President Trump indicated he would not be changing his policies. This pretty much put an end to the theory that the president's tariff plan was just a negotiating tool and the tariffs would be reduced soon. Now fears are really kicking in that the tariffs are going to have a heavy negative impact on the U.S. economy, possibly putting it into a recession later this year.
We also have a public speaking appearance by Fed Chairman Powell to watch today. He is set to speak at a conference in Virginia at 11:25 AM ET. Whenever the Fed Chair speaks, the markets listen, but today's topic is labeled Economic Outlook. It will be hard for him to avoid the tariff issue and the market's response over the past two sessions, especially if he takes questions from the audience. The Fed's primary roles are to control inflation and maximize employment, not to control the financial markets. In other words, he has no responsibility to, nor is he likely to say anything today that will put an end to the stock sell-off and strong bond rally. Still, market participants will be listening in case he offers an opinion or prediction on the subject.
Next week brings us fewer economic reports than this week, but the calendar includes two highly important inflation indexes, a couple of long-term Treasury auctions and the minutes from the March 18-19 FOMC meeting. Activities don't begin until Wednesday, leaving retaliatory tariffs and related headlines to drive the markets until then. Look for details on next week's calendar in Sunday evening's weekly preview.
Lock if my closing were taking place within 7 days... Float if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
Hello, I hope you have a good weekend!
At the beginning of last week, interest rates improved because the Federal Reserve thought inflation might be short-lived. But later in the week, other Fed officials said otherwise, causing rates to go up. Even though inflation was higher than expected today, bond prices (bonds and mortgage rates typically have an inverse relationship) increased because people spent less, which could mean the economy is slowing down.
Interest rates will only decrease if: 1. Inflation goes down (which looks unlikely after today's news); 2. The economy gets weaker (this is possible, but hard to predict); 3. The job market gets weaker (next week's job report will be very important for this).
At week’s end, interest rates showed a mixed performance.
Next week will be important for financial and mortgage markets, with several key events scheduled. We'll see crucial economic reports, starting with the ISM manufacturing index on Tuesday, which gives us a picture of how factories are performing. Then, on Friday, the government releases its employment report. These reports often cause market fluctuations. Also, several Federal Reserve officials, including Chairman Powell, are set to give speeches. Their comments on the economy and potential interest rate changes will be closely watched. Notably, Monday is the only day of the week where no major economic data is being released.
Last Updated: 3/28/25
Friday's bond market has opened well in positive territory despite mixed economic and inflation news. Stocks are likely contributing to this morning's bond strength by posting losses of 351 points in the Dow and 223 points in the Nasdaq. The bond market is currently up 22/32 (4.27%), which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
Yesterday's 7-year Treasury Note auction did not go very well. The benchmarks we use to gauge investor demand showed an interest that can be best labeled as below-average to other recent sales. We did see bonds have a slight negative reaction to the 1:00 PM ET results announcement, but it was not enough of a move for most lenders to issue an intraday increase to mortgage pricing and was short-lived. They managed to recover that loss before closing to prevent a negative impact on mortgage rates.
This morning's major news came in February's Personal Income and Outlays report, particularly the inflation readings within the data. February's Personal Consumption Expenditures (PCE) index rose 0.3%, matching forecasts. The more important core reading rose 0.4% when analysts were expecting to see a 0.3% increase. The actual reading rose just over 0.35%, causing it to round up to 0.4% for headlines. This has helped justify bonds mostly ignoring the inflation data, especially since the year-over-year readings didn't yield any surprises.
The other portion of today's first report gave us contradicting readings. Personal income rose 0.8%, exceeding predictions of 0.4%. This is unfavorable for bonds and mortgage rates because it means consumers had more money to spend. However, that additional income did not translate into spending. The outlays reading (spending) was unchanged from January's level, falling well short of the 0.5% that was expected. As another sign of trouble with consumer spending numbers, we can label this part of the report good news for rates.
Closing out this week's calendar was the revised Index of Consumer Sentiment from the University of Michigan at 10:00 AM ET. They announced a reading of 57.0 that was a downward change from the preliminary estimate of 57.9 two weeks ago and the lowest number since November 2022. The lower reading means surveyed consumers did not feel as good about their own financial situations as previously thought. Waning confidence usually translates into softer consumer spending that makes up over two-thirds of the U.S. economy. Accordingly, we can easily label this report as favorable for mortgage rates.
Next week brings us plenty that may influence the financial and mortgage markets. The economic releases start Tuesday and include the typical new month reports, such as the highly important ISM manufacturing index (Tuesday) and governmental Employment report (Friday). Monday is the only day of the week without relevant data set for release. In addition to the data, there are also another batch of Fed-member speaking engagements scheduled. There are a few that have topics related to economic growth and/or monetary policy that will draw plenty of attention. One of them is with Fed Chairman Powell. Look for details on all of next week's activities in Sunday evening's weekly preview.
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