Mortgage Daily News Rate Watch

• Mortgage Rates Move Up to 3 Month Highs
  Posted on Wednesday May 21, 2025
  Two days ago, mortgage rates began the day at 7.04% before mid-day improvements brought the average back down to 6.99%.  Today started out in a similar vein with the average lender at 7.05%, but the mid-day movement only made things worse. In terms of catalyst events, the bond market (and stock market, for that matter) swooned after a scheduled auction of 20yr Treasury bonds. The auction results were weaker than expected, signaling lower-than-expected demand. When demand is lower for Treasuries, it puts upward pressure on bond yields (aka "rates"). Notably, the 20yr auction results were hitting at the same time that some updates were coming out regarding the budget debate in congress.  In general, the bond market has not been enthusiastic about how that process has evolved. Bonds were hoping for a tighter leash on spending because lower spending implies lower bond issuance--something that would help rates move lower, all other things being equal. At this point, all potential iterations of the spending bill involve more spending than bonds wanted. The 20yr auction isn't all that important in the bigger picture, but it was latched onto as evidence of bigger underlying structural concerns. All that to ... Continue Reading »
• Mortgage Rates Hold Steady Near Recent Highs
  Posted on Tuesday May 20, 2025
  Mortgage rates ultimately managed to hold steady on Tuesday despite some underlying market volatility. Rates change day to day (and sometimes intraday) based on movement in the bond market, and there's been plenty of that. Yesterday's market movement was good for rates after starting out near the worst levels since February. This allowed most lenders to make positive adjustments, thus getting the average back under 7% by the end of the day.  Things started on a weaker note yet again today, but in a far gentler way. Because the underlying bond market was in roughly the same spot as it was when mortgage lenders revised their rates yesterday, today's average remained unchanged. All that having been said, it's important to note that these are averages. Because different lenders react to market movement in slightly different ways at different times of day, an individual lender may be noticeably better or worse than yesterday depending on when you look.  The thing that should generally be true is this: by the end of business today, most lenders should be very close to their highest rate offering of the past month, roughly matching either yesterday's or last Wednesday's highs. Continue Reading »
• Mortgage Rates Briefly Over 7% Before Mid-Day Improvement
  Posted on Monday May 19, 2025
  Mortgage rates jumped sharply over the weekend as financial markets reacted to Moody's credit rating downgrade of the U.S.  News of the downgrade broke with only minutes left in Friday's market/business day, so most of the response played out when global markets opened again late last night. The initial reaction involved stock prices moving lower and bond yields moving higher (which can also be characterized as bond market weakness/losses/etc). In general, bond market weakness coincides with higher mortgage rates and this morning was no exception.  Most mortgage lenders are deciding on rates for the day in the 9am-10am ET time frame.  Because this was one of the weakest moments for the bond market, mortgage rates were sharply higher at first. The average lender was back over 7% for the 1st time since April 11th, and only the 2nd time in 3 months. No sooner were these rates being published than the underlying market began moving back in the other direction. Mortgage lenders prefer to only set rates once per day, but will make mid-day updates when things change enough. Today's reversal was more than sufficient to prompt a re-price. After that, the average top tier 30yr fixed ... Continue Reading »
• Mortgage Rates End Week Only Slightly Higher After Decent Recovery
  Posted on Friday May 16, 2025
  The average top tier 30yr fixed rate is set to end the week just a few hundredths of a percent higher than last Friday at 6.92%.  That's a victory--albeit a small one--after hitting 6.99% on Wednesday. As always, these rates refer to an index representing broad industry averages for best-case scenarios. Individual lenders and scenarios can be quite a bit different for a variety of reasons. Today's rate change is a bit misleading because it left us in slightly better shape versus yesterday. The bond market (which is directly responsible for mortgage rate changes) disagrees. Whether we're talking about mortgage-specific bonds or their more popular older sibling US Treasuries, bonds were just a hair weaker across the board. Weaker bonds = higher rates, all other things being equal. The discrepancy comes down to timing and the rate setting practices of mortgage lenders. Specifically, bonds improved late enough in the day yesterday that many lenders didn't fully adjust their mortgage rates to reflect the gains.  Then this morning, bonds signaled even lower rates before ultimately moving back to more neutral levels.  Some lenders bumped rates slightly higher as a result, but the average lender is still slightly below ... Continue Reading »
• Mortgage Rates Catch a Break
  Posted on Thursday May 15, 2025
  Mortgage rates have done almost nothing but move higher in the month of May. The latest bump--seen yesterday--took the average top tier 30yr fixed rate to 6.99%. While this is fairly uneventful in the bigger picture, it was a noticeable increase from the 6.81 seen at the end of April, or the slightly lower range  before that. Today's improvement was modest, but at least it was an improvement.  And at least it prevents us from needing to write headlines about an official break above the 7.0% level.  As for motivations, the bond market (which dictates rates) improved after a slew of economic data this morning and a speech from Fed Chair Powell. In terms of timing, more of the improvement happened after Powell, but it's impossible to know if traders weren't simply waiting for the morning's key events to transpire before fully reacting. The average lender is about 0.05% lower than yesterday.  Most lenders began the day roughly in line with yesterday and then made a mid-day adjustment in response to the bond market gains. Continue Reading »
• Mortgage Rates Rising Closer to 7%
  Posted on Wednesday May 14, 2025
  In early April, amid the most volatile portion of the market's reaction to the tariff announcement, mortgage rates were officially over 7% for a single day. By the middle of the following week, they were well on their way lower, ultimately ending the month just over 6.8%. Since then, it's been tough sledding for bonds and the rate market. Almost every day in the month of May has been a bad one.  Even if the size of the rate increases have been reasonably small, they're starting to add up.  Now today, the average lender is back on the doorstep of 7% for top tier conventional 30yr fixed mortgage rates.  A second wave of weakness in the bond market this afternoon is resulting in many lenders announcing mid-day increases.  With that, today's index ended up at 6.99%--all this despite an absence of any standout individual motivations in today's news. Tomorrow brings a slew of important economic reports.  If they come in stronger than expected, rates could face additional upward pressure.  If they're weaker, markets may dismiss them as stale data that was overly influenced by tariff-related uncertainty that has since improved.  Continue Reading »
• Mortgage Rates Hold Fairly Steady After Inflation Data
  Posted on Tuesday May 13, 2025
  Tuesday brought the release of an economic report that has frequently been responsible for big swings in mortgage rates. The Consumer Price Index (CPI) is the earlier of the two big inflation reports from the US government, and inflation is a big deal for interest rates.  In general, higher inflation coincides with higher rates and vice versa. But today's CPI data was likely to be taken with a grain of salt due to the to-be-determined impacts of tariffs and trade deals on the price of imported goods and materials. In other words, if inflation came in lower than expected, it wouldn't matter as much as normal because. The only real risk was that inflation would come in higher than expectations, thus suggesting that any tariff-related impact would be hitting an already elevated price trend. Thankfully, today's report was slightly lower than expected, even though it moved up from last month's levels. As expected, that didn't do anything to help rates. In fact, the average lender is just a hair higher than yesterday owing to market movement that happened later in the day. Continue Reading »
• Mortgage Rates Jump to 2 Week Highs After US/China Trade Talks
  Posted on Monday May 12, 2025
  Tariffs and trade policy have been a new and important consideration for the bond market for just over a month now. That matters to mortgage rates because mortgage pricing is primarily determined by bond prices.   The reaction function for rates is a bit complicated at first glance because tariffs can exert influence in opposite directions. To whatever extent trade policy results in lower economic growth, it would generally be good for rates, all other things being equal. To whatever extent trade policy results in higher prices, lower revenue, and lower foreign demand for US assets (which tends to correlate with trade relationships), it would push rates higher.  Over the weekend, the US and China agreed on a 90 day pause on the more extreme tariff brinksmanship.  While levels remain elevated enough to cause some inflation concern (remember: bad for rates), they've come down enough to alleviate some concern about the global economy (also bad for rates).  Today's move wasn't huge as far as mortgage rate volatility goes, but the average lender is now up to the highest levels in just over 2 weeks. [thirtyyearmortgagerates] Continue Reading »
• Mortgage Rates Barely Lower to End The Week
  Posted on Friday May 09, 2025
  Whether it's today vs yesterday, or today vs the end of last week, the average top tier 30yr fixed mortgage rate is just a hair lower. Today's improvement was arguably a byproduct of trade related headlines this morning. Specifically, some comments suggested this weekend's negotiations between the US and China in Switzerland would merely be a starting point. As has been the case for most any other recent trading day, there were plenty of other headlines that may have had an impact, but the overall movement is so small that nothing really stands out.   Looking ahead, the bond market (and thus, rates) will likely be tuning into next Tuesday's inflation data along with any substantive developments from the weekend's trade negotiations (which would be a tall order since they don't involve a meeting between Xi and Trump). Continue Reading »
• Mortgage Rates Move Higher After Trade Deal
  Posted on Thursday May 08, 2025
  Mortgage rates moved back up to the higher levels seen earlier this week after the official announcement of a trade deal between the U.S. and the U.K. Most lenders actually began the day fairly close to yesterday's latest levels, but were ultimately forced to raise rates in response to weakness in the bond market.   The rationale for this market reaction can be debated. Some market watchers conclude that a trade deal is simply "good for stocks and bad for bonds" because it's economically bullish. While that sentiment CAN account for some of the movement, it's not the whole story. Bonds (which dictate rates) have specific concerns regarding inflation, foreign demand, and issuance needs. These are high level topics that are beyond the scope of a daily mortgage rate recap, but suffice it to say "rates have a lot on their minds" when it comes to how trade policy shakes out.  Unfortunately, it's sort of a no win situation in the short term.  The only exception would have been a full exemption from tariffs. In the bigger picture, today's mortgage rate increase is unremarkable--sort of average--and it leaves the rate index well below the early April highs, ... Continue Reading »

Mortgage Daily News Rates Update

• Why Did Rates Completely Ignore This Week's Bad News?
  Posted on Friday November 05, 2021
  This week, the Fed announced a reduction in its bond buying. In separate news, the big jobs report was much stronger than expected. Both of these events should have pushed rates higher. So why didn't they? Let's start with the Fed and its bond buying adventures (also known as QE or "quantitative easing").  The following chart of 10yr Treasury yields (a broad benchmark for "rates") shows the paradoxical reactions to the Fed's previous decisions to stop buying bonds. In other words, we knew a paradoxical reaction was a possibility , even though past precedent is never a guarantee.  Beyond that, we also knew that rates were moving higher in anticipation of the Fed's eventual exit.  In fact, by last week, they'd already covered as much ground as they did in 2013. Continue Reading »
• Mortgage Rates Started Flat, But Moved Lower During The Day
  Posted on Thursday November 04, 2021
  Mortgage rates  fell today as markets decompressed following yesterday's announcement from the Federal Reserve regarding the reduction of its bond buying efforts (aka "tapering").   Despite the proximity to Fed day, markets were more inspired by another central bank today: the Bank of England (BOE).   The BOE had its own policy announcement early this morning.  Unlike the Fed, there was broad disagreement about the BOE's course of action.  They ended up making the more rate-friendly decision and global bond markets reacted immediately.  Unsurprisingly, it was the British bond market that had the best day, but there's always a certain degree of correlation between UK and US lending rates.  As US sovereign debt yields fell, mortgage-backed b Continue Reading »
• Minimal Damage For Mortgage Rates Following Fed
  Posted on Wednesday November 03, 2021
  Mortgage rates  moved higher today after the Federal Reserve announced a reduction in its rate-friendly bond buying program.  Actually, to be fair, rates moved higher before  the Fed made that announcement, and largely for other reasons.  The biggest issue today was, in fact, a widely followed report on the service sector (ISM Non-Manufacturing PMI) which crushed its previous record high.  Bonds experienced additional volatility in the afternoon following the Fed announcement, but they were able to recover back to pre-Fed levels within 2 hours. The average mortgage lender began the day offering similar rates to those seen yesterday.  Several lenders responded to bond market weakness by raising rates slightly in the middle of the day.  The average b Continue Reading »
• Another Good Day For Rates, But Tomorrow is Anyone's Guess
  Posted on Tuesday November 02, 2021
  Mortgage rates began the day moderately lower compared to yesterday's latest levels.  The size of the move depends on the time of day in question due to intraday movement in the bond market.  Simply put, bonds improved steadily from the beginning of the day yesterday and ultimately peaked around 11am today.  In general, bond market improvement correlates with lower rates. The first effect of this 2-day move was for the average lender to offer mid-day improvements yesterday.  Those who did (a vast majority) were still able to offer even lower rates this morning.  Lenders who did NOT offer mid day improvements yesterday made even bigger leaps toward lower rates.  When the dust cleared, the peak to trough move accounted for almost an eighth of a percent Continue Reading »
• Mortgage Rates Catch Up To Last Week's Market Movement (That's a Good Thing)
  Posted on Monday November 01, 2021
  Mortgage rates moved moderately lower today despite an absence of significant movement in the bond market.  In general, when bonds improve, rates fall (and vice versa), but it's not feasible for mortgage lenders to adjust their rates offerings in relative real-time as bonds can send massively mixed signals on any given day.   Last Friday was just such a day.  It began with bonds doing very poorly .  The weakness was in place before the average lender published their first rate sheet of the day, so mortgage rates started out higher.  As the day progressed, bonds improved enough for many lenders to make mid-day improvements to rates, but bonds suggested the improvements should have been bigger. That's where today came in.  Bonds began weaker yet a Continue Reading »
• Don't Fear The Taper
  Posted on Friday October 29, 2021
  For anyone following interest rates very closely in 2013, the taper tantrum is not easily forgotten. It describes the bond market's knee-jerk response to the realization that the Federal Reserve would be winding down its bond purchase program. With the Fed almost certain to make a similar announcement next Wednesday, should we be scared yet again? In a word: no .   Of course, we'll need to qualify that.  First off, whether or not we should be scared has little to do with whether or not the taper announcement will push rates higher.  Perhaps the better question--the one to which we can answer a more unqualified "no"--is as follows: Should we be afraid that next week's tapering announcement from the Fed will push rates higher?! There are a few reasons we can answe Continue Reading »
• Mortgage Rate Mini-Winning Streak Comes to an End
  Posted on Thursday October 28, 2021
  Mortgage rates  finally ended this week's winning streak today.  In light of the general upward trend in rates over the past month, bond yields (which tend to correlate with mortgage rate movement) made it to surprisingly low levels as of yesterday afternoon.  Mortgage lenders responded by dropping rates to the best levels in nearly 2 weeks. Things changed today as bonds lost ground after the European Central Bank noted a still-decent outlook for the economy recovery and an earlier-than-expected outlook for ending its bond purchase program.  In general, a stronger economy hurts bonds and central bank purchases help. Then in the afternoon, a scheduled auction of 7yr US Treasuries was met with less enthusiastic demand compared to recent auctions.  The day Continue Reading »
• Mortgage Rates Hold Steady Near Multi-Month Highs
  Posted on Wednesday October 20, 2021
  Mortgage rates  began moving off longer term lows in early August and that trend has continued ever since.  The September 22nd Fed Announcement (and press conference with Fed Chair Powell) served as a jumping-off point for additional volatility and upward momentum.  In contrast, October has generally seen rates rise at a more gradual pace.  On several occasions, they've merely held almost perfectly in line with the previous day's levels. Today is just such a day! There were no notable motivations for the underlying bond market today (bonds dictate interest rates).  As such, today's sideways momentum makes sense.  That said, it's worth mentioning that there are different versions of "sideways" when it comes to the financial market.  Today's versio Continue Reading »
• Highest Rates in Months
  Posted on Monday October 18, 2021
  Mortgage rates had a mixed showing last week.  They started out high before improving through Thursday.  Finally, they took a step back up on Friday.  Now at the start of the new week, the upward momentum is continuing.  The bond market was much weaker in overnight trading, and weaker bonds mean higher rates, all other things being equal.  Bonds hit their weakest levels just before the average mortgage lender released rates for the day.  As such, the average conventional 30yr fixed rate quote was the highest in roughly 4 months .   As the day progressed, bonds found their footing to some extent.  It was enough for most lenders to offer mid-day improvements to rates.  Keep in mind though, these improvements are generally small. Continue Reading »
• No, Mortgage Rates Are Not "Sharply Higher" This Week
  Posted on Thursday October 14, 2021
  Mortgage rates   fell today as a majority of lenders finally got caught up with the past few days of strength in the bond market.  Lenders rely on bonds--specifically mortgage-backed securities (MBS)--to determine where to set mortgage rates.  Bonds are constantly on the move, but lenders prefer to just set mortgage rates once per day, if possible.  As such, when volatility is higher and when rates have been rising more than falling, lenders tend to be more defensive.  In other words, they need to see more sustained improvement than normal before bringing rates back down. Today's improvement was the biggest of the week, and it brings the average conventional 30yr fixed quote well below those seen at the end of last week.  Even so, there are numerous Continue Reading »

Mortgage Daily News NewsLetter

• Mortgage Rates Move Up to 3 Month Highs
  Posted on Wednesday May 21, 2025
  Two days ago, mortgage rates began the day at 7.04% before mid-day improvements brought the average back down to 6.99%.  Today started out in a similar vein with the average lender at 7.05%, but the mid-day movement only made things worse. In terms of catalyst events, the bond market (and stock market, for that matter) swooned after a scheduled auction of 20yr Treasury bonds. The auction results were weaker than expected, signaling lower-than-expected demand. When demand is lower for Treasuries, it puts upward pressure on bond yields (aka "rates"). Notably, the 20yr auction results were hitting at the same time that some updates were coming out regarding the budget debate in congress.  In general, the bond market has not been enthusiastic about how that process has evolved. Bonds Continue Reading »
• Mortgage Rates Hold Steady Near Recent Highs
  Posted on Tuesday May 20, 2025
  Mortgage rates ultimately managed to hold steady on Tuesday despite some underlying market volatility. Rates change day to day (and sometimes intraday) based on movement in the bond market, and there's been plenty of that. Yesterday's market movement was good for rates after starting out near the worst levels since February. This allowed most lenders to make positive adjustments, thus getting the average back under 7% by the end of the day.  Things started on a weaker note yet again today, but in a far gentler way. Because the underlying bond market was in roughly the same spot as it was when mortgage lenders revised their rates yesterday, today's average remained unchanged. All that having been said, it's important to note that these are averages. Because different lenders rea Continue Reading »
• Mortgage Rates Briefly Over 7% Before Mid-Day Improvement
  Posted on Monday May 19, 2025
  (Un)Surprising Reversal After Initial Weakness The sharp overnight losses in stocks and bonds were consistent with a market that didn't have time to process the sort of knee-jerk reaction one would expect from headlines like Moody's US credit rating downgrade. Most of the rest of the domestic session was consistent with the type of reversal one might expect after a knee-jerk reaction to news that wasn't really that newsworthy. As has been exhaustively covered, 2 of the other big 3 ratings agencies had long since taken the US credit rating down a peg, thus limiting the true significance of Friday's news. Bonds ended the day weaker than they were at 3pm la Continue Reading »
• Builder Confidence Near Post-Pandemic Lows, But Timing is Everything
  Posted on Friday May 16, 2025
  The National Association of Homebuilders (NAHB) and Wells Fargo released the monthly Housing Market Index (HMI) this week, showing builder confidence falling to the lowest levels since 2023.  This is about as low as the index has been since the housing crisis more than a decade ago. While persistently high interest rates remain a top concern for the housing market, a growing number of builders cited difficulty pricing new homes in light of the rapidly changing outlook for material costs due to tariffs.  With that in mind, it's important to note that 90% of this month's responses came in  before the US/China trade announcement.  Not only did that announcement drastically reduce tariffs for 90 days, it also offered a proof of concept that will likely see the outlook improve in Continue Reading »
• Mortgage Rates Catch a Break
  Posted on Thursday May 15, 2025
  Today's Gains Help Us Understand Yesterday's Losses Wednesday's weakness was severely lacking in the scapegoat department. In other words, there were not big, obvious justifications for the spike in bond yields. Today's rally had a suggestion: perhaps the market was nervous about a potential update to the inflation framework in today's Powell speech.  After all, it was the previous inflation framework update in 2020 (which basically concluded that rates could stay "lower for longer," even if inflation was elevated) that was responsible for a lot of drama over the past 3 years. Although the 8:30am economic data helped a bit, most of today's gain Continue Reading »
• Mortgage Rates Rising Closer to 7%
  Posted on Wednesday May 14, 2025
  In early April, amid the most volatile portion of the market's reaction to the tariff announcement, mortgage rates were officially over 7% for a single day. By the middle of the following week, they were well on their way lower, ultimately ending the month just over 6.8%. Since then, it's been tough sledding for bonds and the rate market. Almost every day in the month of May has been a bad one.  Even if the size of the rate increases have been reasonably small, they're starting to add up.  Now today, the average lender is back on the doorstep of 7% for top tier conventional 30yr fixed mortgage rates.  A second wave of weakness in the bond market this afternoon is resulting in many lenders announcing mid-day increases.  With that, today's index ended up at 6.99%--all this despite a Continue Reading »
• Mortgage Rates Hold Fairly Steady After Inflation Data
  Posted on Tuesday May 13, 2025
  Tuesday brought the release of an economic report that has frequently been responsible for big swings in mortgage rates . The Consumer Price Index (CPI) is the earlier of the two big inflation reports from the US government, and inflation is a big deal for interest rates .  In general, higher inflation coincides with higher rates and vice versa. But today's CPI data was likely to be taken with a grain of salt due to the to-be-determined impacts of tariffs and trade deals on the price of imported goods and materials. In other words, if inflation came in lower than expected, it wouldn't matter as much as normal because. The only real risk was that inflation would come in higher than expectations, thus suggesting that any tariff-related impact would be hitting an already elevated price Continue Reading »
• Mortgage Rates Jump to 2 Week Highs After US/China Trade Talks
  Posted on Monday May 12, 2025
  Tariffs and trade policy have been a new and important consideration for the bond market for just over a month now. That matters to mortgage rates because mortgage pricing is primarily determined by bond prices.   The reaction function for rates is a bit complicated at first glance because tariffs can exert influence in opposite directions. To whatever extent trade policy results in lower economic growth, it would generally be good for rates, all other things being equal. To whatever extent trade policy results in higher prices, lower revenue, and lower foreign demand for US assets (which tends to correlate with trade relationships), it would push rates higher.  Over the weekend, the US and China agreed on a 90 day pause on the more extreme tariff brinksmanship.  While levels r Continue Reading »
• Mortgage Rates Barely Lower to End The Week
  Posted on Friday May 09, 2025
  Whether it's today vs yesterday, or today vs the end of last week, the average top tier 30yr fixed mortgage rate is just a hair lower. Today's improvement was arguably a byproduct of trade related headlines this morning. Specifically, some comments suggested this weekend's negotiations between the US and China in Switzerland would merely be a starting point. As has been the case for most any other recent trading day, there were plenty of other headlines that may have had an impact, but the overall movement is so small that nothing really stands out.   Looking ahead, the bond market (and thus, rates) will likely be tuning into next Tuesday's inflation data along with any substantive developments from the weekend's trade negotiations (which would be a tall order since they don't in Continue Reading »
• Mortgage Rates Move Higher After Trade Deal
  Posted on Thursday May 08, 2025
  Mortgage rates moved back up to the higher levels seen earlier this week after the official announcement of a trade deal between the U.S. and the U.K. Most lenders actually began the day fairly close to yesterday's latest levels, but were ultimately forced to raise rates in response to weakness in the bond market.   The rationale for this market reaction can be debated. Some market watchers conclude that a trade deal is simply "good for stocks and bad for bonds" because it's economically bullish. While that sentiment CAN account for some of the movement, it's not the whole story. Bonds (which dictate rates) have specific concerns regarding inflation, foreign demand, and issuance needs. These are high level topics that are beyond the scope of a daily mortgage rate recap, but suf Continue Reading »

Mortgage Daily News Commentary

• Treasury Auction Blamed as Bond Vigilantes' Smoking Gun
  Posted on Wednesday May 21, 2025
  Treasury Auction Blamed as Bond Vigilantes' Smoking Gun Vigilante justice!  Taking matters into one's own hands!  It's a sensational concept when applied to the bond market, but the term hasn't really done us many favors over the years.  It happened to work for a headline today because the term is as over-the-top as the notion that today's 20yr auction was some magical "ah ha" moment leading to a massive reprimand of congressional budget negotiations in both stocks and bonds. In actuality, the auction was fairly average--certainly nothing that warranted the stock/bond swoon, but if markets were looking for an excuse to sell (a smoking gun?), it was one of the only options.  Market Movement Recap ... Continue Reading »
• Nothing For Bonds to Trade But Fiscal Disillusionment
  Posted on Wednesday May 21, 2025
  We're now into the 3rd day of a week that's conspicuously lacking in relevant econ data. In addition, the looming holiday weekend hinders participation and increases potential volatility. That means an extra level of impact for whatever bonds can find to move the needle. So far, all they've been finding is a feeling of disillusionment with the fiscal outlook as they watch congress debate spending more money on one thing vs spending more money on another thing.  Insultingly, those things are in the spotlight more for political strategy reasons than for their central role in our current fiscal spiral. So not only are we not addressing the spiral with any of the available options, we're also highlighting the worst features of our legislative process. While all of the above has bonds under pressure overnight, it's worth noting that yields continue to operate in the same short-term range since the beginning of last week. That range was entered due to the US/China tariff pause.  Fiscal disillusionment is merely the factor pushing yields toward the top of that range. Continue Reading »
• Ultimately Sort of Flat if You Use Your Imagination
  Posted on Tuesday May 20, 2025
  Ultimately Sort of Flat if You Use Your Imagination Here's a quick and easy method for imagining that bonds were flat today. Step one, go back to yesterday and use 3pm as a closing time (not a crazy request considering that's the traditional end-of-day marking time for Treasuries). Then do the same for today. The result is that 10yr yields are up about half a bp. Feel free to round that down to 0bps, and voila! Flat day.  That assessment actually fits better with the calendar and the general vibe. AM volatility came and went surrounding budget headlines and bonds are once again flirting with 4.5% 10yr yields on a holiday-shortened, mostly data-free week, waiting for the next shoe to drop. Market Movement Recap ... Continue Reading »
• Budget Battle Hitting Bonds Amid Empty Calendar
  Posted on Tuesday May 20, 2025
  It's a holiday-shortened week with a relatively empty economic calendar, thus forcing the bond market to find its movement cues elsewhere. To some small extent, corporate bond issuance has had an impact behind the scenes. It was lower than expected yesterday, which may have helped, and is picking back up today, which may be hurting. But the bigger pain aligns fairly clearly with various newswires surrounding the budget battle. In the most basic sense, bonds are protesting a lack of fiscal restraint. Nothing has been passed yet, but the concern is that a flurry of pressure from the White House could force a few hold outs to change their vote. Bonds wouldn't like that because as it stands, the bill would likely result in higher Treasury issuance. Continue Reading »
• (Un)Surprising Reversal After Initial Weakness
  Posted on Monday May 19, 2025
  (Un)Surprising Reversal After Initial Weakness The sharp overnight losses in stocks and bonds were consistent with a market that didn't have time to process the sort of knee-jerk reaction one would expect from headlines like Moody's US credit rating downgrade. Most of the rest of the domestic session was consistent with the type of reversal one might expect after a knee-jerk reaction to news that wasn't really that newsworthy. As has been exhaustively covered, 2 of the other big 3 ratings agencies had long since taken the US credit rating down a peg, thus limiting the true significance of Friday's news. Bonds ended the day weaker than they were at 3pm last Friday (before the Moody's news), but slightly stronger vs the 5pm levels (15 minutes after the Moody's news). ... Continue Reading »
• Global Bond Audience is Booing US Fiscal Performance
  Posted on Monday May 19, 2025
  When Moody's announced the surprise cut of the US credit rating on Friday, there were only a few minutes left to trade and all but the latest working US-based traders were even at their desks. The most logical fallout in a scenario like that is for the rest of the world to take its turn piling into the trade as soon as overseas markets opened (not to mention US traders who were already gone for the day on Friday).  Unfortunately, logic prevailed overnight. We'd note that Moody's was simply the last of the big 3 to make this change, and that it's not really a groundbreaking development.  Rather, the groundbreaking development is playing out behind the scenes as the US government (all of it, red and blue and in between) once again fails to set the country on a sustainable fiscal path.  THAT is what the market is protesting. That is why the crowd is booing. Moody's is simply the surly guy who shouted "you suck!" from the back of the audience. Continue Reading »
• Moody's Pulls Pin And Walks Away With 10 Minutes Left to Trade
  Posted on Friday May 16, 2025
  Moody's Pulls Pin And Walks Away With 10 Minutes Left to Trade Bonds began the day stronger after a gentle overnight rally. Selling commenced at 9:30am for the 4th day in a row and picked up slightly after the highest reading on inflation expectations since 1981. Even then, losses were modest at best and bonds were generally flat/unchanged until the very end of the day. With carefully considered timing, Moody's pulled the pin and walked away with 10 minutes left to trade. The grenade in this case was a downgrade of the US credit rating.  This move is certainly in the ratings agencies' playbooks amid congressional budget battles, but most notably all the way back in 2011. Also of note, Moody's was the last of the big 3 to have the US at a triple A rating, so while it's not the craziest thing that ever happened to bonds, the timing made for some last minute selling ahead of the 5pm cut-off.  ... Continue Reading »
• Coasting Into The Weekend With Little Regard For Data
  Posted on Friday May 16, 2025
  One might assume that an economic report like Import Prices would carry a lot of weight in light of the news cycle or that the highest 1yr inflation expectations since 1981 in the Consumer Sentiment survey might cause a stir. In practice, Import Price data is never a big market mover.  Inflation expectations have had an impact at times, but the assumption is they're overdone this time due to the news cycle and survey timing. There's perhaps been some small reaction, but even 30 minutes later, it hasn't been enough to erase overnight gains. Also, roughly half of this morning's bounce happened before the 10am data. Continue Reading »
• Today's Gains Help Us Understand Yesterday's Losses
  Posted on Thursday May 15, 2025
  Today's Gains Help Us Understand Yesterday's Losses Wednesday's weakness was severely lacking in the scapegoat department. In other words, there were not big, obvious justifications for the spike in bond yields. Today's rally had a suggestion: perhaps the market was nervous about a potential update to the inflation framework in today's Powell speech.  After all, it was the previous inflation framework update in 2020 (which basically concluded that rates could stay "lower for longer," even if inflation was elevated) that was responsible for a lot of drama over the past 3 years. Although the 8:30am economic data helped a bit, most of today's gains followed the 8:40am Powell speech.  The absence of stock losses makes the Powell explanation all the more plausible (i.e. if bonds were rallying on weak data, we'd expect to see stocks lose some ground, and they didn't). ... Continue Reading »
• A "No Whammies" Rally For Bonds After Data and Powell
  Posted on Thursday May 15, 2025
  This morning's market action is quickly helping us understand the enigmatic trading seen yesterday (i.e. a sell-off without any great scapegoats).  Retail sales' control group was well below expectations and helped validate a moderate overnight rally.  Bigger moves and more sustained volume followed Powell's scheduled speech at the policy framework conference. Perhaps there was a concern that Powell's update would hint at a shift toward tolerating "higher for longer" policy rates in the same way that the 2020 framework review resulted in a "lower for longer" playbook.  The net effect has been a nearly complete reversal of yesterday's weakness, but yields are currently bouncing before finishing that job.  Continue Reading »

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• Housing Starts Buoyed By Multi-Family Sector
  Posted on Friday May 16, 2025
  The Census Bureau is out with monthly construction numbers for April showing an uptick in construction activity offset by slightly lower permitting.  While there are several other metrics in this report, building permits and housing starts (which measures when construction actually begins) are the two that are most widely followed. As seen in the chart below, housing starts tend to be more volatile, month to month.  In the present case, however, they were only slightly higher than the previous month at an annual pace of 1.361 million vs 1.339 million. Starts would have fallen had it not been for the multifamily sector.  Single unit starts dropped from 947k to 927k while multifamily starts surged from 378k to 420k, the highest since late 2023. Over the past few years, there are several housing and mortgage market metrics that paint a fairly gloomy picture.  Applications and builder confidence come to mind.  While the construction data is not as strong as it was a few years ago, it remains one of the better examples of strength in the sector as it remains higher than most of the pre-pandemic time frame. Continue Reading »
• Builder Confidence Near Post-Pandemic Lows, But Timing is Everything
  Posted on Friday May 16, 2025
  The National Association of Homebuilders (NAHB) and Wells Fargo released the monthly Housing Market Index (HMI) this week, showing builder confidence falling to the lowest levels since 2023.  This is about as low as the index has been since the housing crisis more than a decade ago. While persistently high interest rates remain a top concern for the housing market, a growing number of builders cited difficulty pricing new homes in light of the rapidly changing outlook for material costs due to tariffs.  With that in mind, it's important to note that 90% of this month's responses came in  before the US/China trade announcement.  Not only did that announcement drastically reduce tariffs for 90 days, it also offered a proof of concept that will likely see the outlook improve in the next survey due to lower material costs and a more upbeat consumer. Additional details are available at https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index. Continue Reading »
• Purchase Demand Moves Back Toward 2 Year High; Refis Hold Steady
  Posted on Friday May 16, 2025
  Home purchase demand improved improved last week according to the MBA mortgage application survey. The improvement over the previous week was fairly modest, but the index was already the 4th highest reading of the past 2 years.  Now it's the 5th highest and the latest update takes its place, moving within striking distance of longer term highs. It's no secret that most measures of mortgage and housing activity have been operating in a low, narrow range compared to where they were a few years ago. The mortgage rate spike of 2022 gets most of the credit for that, and a longer term chart of refinance demand helps contextualize shorter term trends. All that to say, we have to zoom in if we hope to see changes in application demand. In so doing, we find refinance activity still elevated relative to most of the past few years, but not in the 'boomlet' territory seen last Fall. The absence of significant week-over-week movement in refi demand makes good sense in light of minimally-changed mortgage rates. MBA logged a 0.02% increase in the average 30yr fixed rate from the previous week which aligns fairly ... Continue Reading »
• Home Price Appreciation Remains, But Interesting Trend Emerges
  Posted on Friday May 02, 2025
  Both of the major purveyors of home price indices have been in agreement for the better part of a year that the average home is appreciating between 4 and 5 percent per year.   The FHFA House Price Index showed only a 0.1% uptick in February while the Case Shiller Home Price Index rose 0.7%.  In annual terms, Case Shiller was at 4.5% and FHFA fell from 5.0 to 3.9%. In the bigger picture, these changes don't amount to much. Things get a bit more interesting when we examine the monthly movement. First off, and more by way of a general backdrop, the past few years have seen a bigger gap between highs and lows compared to the norms established between 2014 and 2019. The more interesting month-over-month development is highlighted in the next chart. Simply put, FHFA's index dropped to 0.1 from 0.3.  That's not a big deal in and of itself, but the plot thickens when we consider the following 2 facts: These indices are not seasonally adjusted (i.e. they show typical seasonal price patterns when viewed in a month-over-month interval) February (the most recent month available, released this ... Continue Reading »
• Mortgage Applications Contract Slightly, But Remain Above 2 Year Average
  Posted on Friday May 02, 2025
  Mortgage rates were in the process of falling by the end of last week, but they made additional headway during the first half of the present week.  That means this week's mortgage application survey from the Mortgage Bankers Association (MBA) may be reflecting hesitation due to the elevated rates at the beginning of last week.  The chart below shows the day to day rate movement (MND) during the survey week as well as the weekly survey rate (MBA). Mortgage rates are not perfectly correlated with mortgage application activity--especially for purchases.  But the fairly quick rate spike in the early part of the week jives with the modest drops in both the refi and purchase indices from MBA. Both sets of application data are still higher than their average level from the past 2 years. MBA adds that demand for purchase applications "continues to be subdued by broader economic uncertainty and signs of labor market weakness," according to Joel Kan, MBA’s Vice President and Deputy Chief Economist.  Continue Reading »
• Existing Home Sales at 5 Month Lows
  Posted on Friday April 25, 2025
  As is the case for the monthly data on New Home Sales from the Census Bureau, the National Association of Realtors (NAR) Existing Home Sales report does not make for exciting news these days. It's not that the news is tragic or alarming either.  It just sort of... is. Whereas New Home Sales have been able to hold sideways near their pre-covid highs, Existing Sales continue to languish near the lowest levels in decades.  Apart from the great financial crisis in 2008-2010, you'd have to go back to 1995 to see lower levels. "Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates," said NAR Chief Economist Lawrence Yun. "Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society." Continue Reading »
• New Home Sales Running Near Highest Pace Since 2022
  Posted on Friday April 25, 2025
  The Census Bureau released March New Home Sales data this week, and it was near the best levels seen since early 2022.  Before you get too excited about that, a caveat is in order.  Simply put, when it comes to housing market data, nothing has been more uneventful than new  home sales over the past few years.  The chart tells the story. It's tough to make an entire news article interesting when it comes to this data, so we won't waste your time.  Instead, here are some bullet-pointed highlights that showcase some of the departures from the status quo (these are common, and they tend to come out in the wash in the longer term): Sales fell 22.2% in the Northeast region, but had risen just as sharply in the previous month. Sales jumped nicely in the South for the 2nd straight month (13.6% this time) and are now at their highest levels since April 2021. The South accounts for 483k of the 724k national total. Continue Reading »
• Mortgage Applications Dropped Sharply in Response to The Recent Rate Spike
  Posted on Friday April 25, 2025
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• Don't Read Too Much Into Builder Confidence (Yet)
  Posted on Thursday April 17, 2025
  The National Association of Homebuilders (NAHB) and Wells Fargo publish the Housing Market Index (HMI) each month, otherwise known simply as "builder confidence."  This month's index came out at the 2nd lowest level since late 2023. While that might sound dramatic, it's very much in line with the prevailing trend for this report. And while the chart above may make it seem like confidence is in the gutter, it's really only about halfway in the gutter in the bigger picture. There were some interesting details inside the report. Specifically, 60% of builders said that tariffs were already impacting prices or leading to announcement of impending price increases from some suppliers.  The NAHB notes that tariff-related price increases currently average 6.3%, or $10,900 on an average home. Continue Reading »
• Home Construction Remains Volatile Despite Steady Flow of Building Permits
  Posted on Thursday April 17, 2025
  One would think that the pace of new residential construction largely mirrors the pace of filings for building permits. And while that is generally true in the bigger picture, there can be noticeable discrepancies month to month. This week's data from the Census Bureau is the latest example. Building permits were slightly higher at 1.482 million units (annual pace) versus 1.459 million previously. Contrast that to housing starts (the term for the ground-breaking phase of home construction) which fell to 1.342 million from 1.494 million previously. This excess volatility in housing starts can be seen in the following chart with the blue line whipping higher and lower many times over the past few years while the orange line remains relatively more steady. There was a heavy regional skew to the housing starts numbers with two regions moving higher and two moving lower as follows: Northeast +2k starts (+1.4%) Midwest +96k starts (+76.2%) South -139k starts (-17.1%) West -129k starts (-30.9%) Note: the count of housing starts account for a different percent change depending on the overall ... Continue Reading »

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