Mortgage Rates Jump Back Up After Inflation Report and Treasury Auction

Mortgage rates have enjoyed 2 days of uncommonly big gains. Granted, they come at the expense of horrific events and an exceptionally high starting point, but such is the nature of the underlying bond market. In other words, we're historically more likely to see strong surges toward lower rates amid stronger, broader surges toward higher rates. Unexpected events that cause significant geopolitical uncertainty frequently serve as catalysts. Thus, the past two days were a bit of a perfect storm for one of these periodic corrections. These sorts of corrections tend to last a day or two and then the market gets back to business. Today was the 'back to business' day in the current example. It might not have been so bad were it not for the details of the Consumer Price Index (CPI), an important report on inflation. Inflation is one of the main reasons that rates are as high as they are. If the data fails to show progress back toward more normal levels, rates won't come down. Today's data arguably showed the opposite of progress, particularly in the services sector. The bond market (which dictates mortgage rates) began losing ground (which implies higher rates) immediately following the release of the CPI data. Later in the day, a scheduled auction of 30yr Treasury bonds was met with lackluster demand, thus pushing rates even higher. Most mortgage lenders were forced to increase rates at least once in the middle of the day, and that's on top of the moderately higher levels out of the gate this morning. Rates aren't as high as they were at the end of last week, but they've taken a solid step back in that direction. That leaves the average lender well over 7.5% and closer to 7.75% for a top tier, conventional 30yr fixed scenario.

October 12, 2023 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Mortgage Rates Jump Back Up After Inflation Report and Treasury Auction Mortgage rates have enjoyed 2 days of uncommonly big gains. Granted, they come at the expense of horrific events and an exceptionally high starting point, but such is the nature of the underlying bond market. In other words, we're historically... (read more) MBS Commentary Bonds Snap Back to Reality on Higher Core Services CPI Bonds Snap Back to Reality on Higher Core Services CPI Even before this week's rally began, we knew to be on the lookout for brief pockets of lower bond yields. These corrections are common during selli... (read more) Rob Chrisman Efficiency, Wire-Fraud, Subservicing, VOE Products; CFPB News for Lenders Today is 101223. Of course you know, by looking ahead to the last day of 2023, that it will be 123123. By then, how many times do you think you’ll hear, “Due to a strategic decision, we’ve decided to…”? Those lenders looking at volumes for the next s... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.69% +0.09% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.69% +0.09 0.00 15 Yr. Fixed 7.02% +0.03 0.00 30 Yr. FHA 7.15% +0.07 0.00 30 Yr. Jumbo 7.85% 0.00 0.00 5/1 ARM 7.13% +0.08 0.00 30 Yr. VA 7.16% +0.07 0.00 Updates Daily - Last Update: 10/12 15 Yr. Fixed Rate 7.02% +0.03% Rate Change Points Freddie Mac 30 Yr. Fixed 7.57% +0.08 0.00 15 Yr. Fixed 6.89% +0.11 0.00 Updates Weekly - Last Update: 10/12 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.41% +0.10 0.71 15 Yr. Fixed 6.73% +0.11 1.17 30 Yr. Jumbo 7.34% +0.02 0.78 Updates Weekly - Last Update: 9/27 MBS / Treasuries UMBS 30YR 6.0 97.94 -0.67 Price / Yield Change MBS UMBS 6.0 97.94 -0.67 GNMA 6.0 98.55 -0.63 Pricing as of: 10/12 5:31PM EST 10 Year US Treasury 4.6970 +0.1390 Price / Yield Change US Treasury 2 YR Treasury 5.069 +0.083 5 YR Treasury 4.694 +0.119 7 YR Treasury 4.722 +0.129 10 YR Treasury 4.697 +0.139 30 YR Treasury 4.856 +0.159 Pricing as of: 10/12 5:31PM EST Latest Video Fed minutes and commentary suggest they're unlikely to move in November mee... Core service numbers show inflation is still relatively elevated, says Nati... We still have enormous fiscal stimulus in the system, says IBM's Gary Cohn Consumer prices rose 0.4% in September, more than expected Around the Web CNBC Mortgage rates near 8%, an 'inventory crisis': Homebuyers face a 'tricky' market, expert says CNBC Getting to 2% inflation won't be easy. This is what will need to happen, and it might not be pretty CNBC Consumer prices rose 0.4% in September, more than expected Marketwatch Treasury yields are likely to fall. That doesn't mean stocks and corporate bonds are guaranteed to increase. Eye on Housing Shelter Drives Over Half of Headline CPI Increase Reuters Fed doves, Fed hawks: US central bankers in their own words Eye on Housing Mortgage Activity Increases Despite Rise in Interest Rates Calculated Risk Blog Cleveland Fed: Median CPI increased 0.5% and Trimmed-mean CPI increased 0.4% in September Eye on Housing Remodeling Market Sentiment Declines in Third Quarter of 2023 forexlive FOMC minutes: Participants judged that risks had become more two-sided CNBC Treasury yields fall as investors await consumer inflation data CNBC Fed officials see 'restrictive' policy staying in place until inflation eases, minutes show Calculated Risk Blog Weekly Initial Unemployment Claims Unchanged at 209,000

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