Mortgage Rates Only Modestly Higher Despite 'Unfriendly' Data

Whatever is bad for the economy is typically good for interest rates. That's the grim irony for the mortgage market and it's the reason you might find a crowd of rate watchers feeling good about downbeat economic data. It's not that they are happy about job losses or lower economic performance. They're just excited to be able to offer their clients lower rates. Today's version of this dynamic was quite the opposite, however. The economic data was friendly toward the economy, most notably with Retail Sales rising 0.6% versus a median forecast of 0.2%. As far as rates are concerned, that's unfriendly news. Bonds (which dictate rates) immediately weakened after the data came out, but thankfully, not as much as we would have expected. The x factor was a friendly interpretation of the European Central Bank's (ECB) policy announcement. The ECB is the European equivalent of the Fed. They hiked rates, but the hike was fully expected. In delivering the hike, their comments were taken to suggest it might be the last hike. European bonds improved significantly, and while that doesn't directly benefit rates in the US, there is always some spillover. In other words, the strength in the European bond market helped to limit the weakness in the US bond market. Thus, rates moved higher today, but not as much higher as they otherwise would have. Outright levels are still historically high with the average lender well into the 7% range for a top tier 30yr fixed scenario.

September 14, 2023 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Mortgage Rates Only Modestly Higher Despite 'Unfriendly' Data Whatever is bad for the economy is typically good for interest rates. That's the grim irony for the mortgage market and it's the reason you might find a crowd of rate watchers feeling good about downbeat economic data. It's not that they ... (read more) MBS Commentary Europe Helps US Bonds Avoid a Bigger Data-Driven Sell-Off Europe Helps US Bonds Avoid a Bigger Data-Driven Sell-Off In a vacuum of "data dependency," today should have been worse for bonds. All three of the morning's economic reports pointed toward higher rate... (read more) Rob Chrisman Hedging, PPE, Fee Collection, QC Products; Gov't and Conforming News; Producer Inflation Alive and Well This morning I head from Chicago to Orlando along with 74 million others (yearly). More fun with numbers: Although the MBA thinks we’ll fund about $1.7 trillion in 2023, weekly applications continue to reflect a declining market so let’s use $1.5 tri... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.24% +0.02% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.24% +0.02 0.00 15 Yr. Fixed 6.59% +0.01 0.00 30 Yr. FHA 6.73% +0.01 0.00 30 Yr. Jumbo 7.33% +0.01 0.00 5/1 ARM 7.04% -0.01 0.00 30 Yr. VA 6.72% +0.01 0.00 Updates Daily - Last Update: 9/14 15 Yr. Fixed Rate 6.59% +0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 7.18% +0.06 0.00 15 Yr. Fixed 6.51% -0.01 0.00 Updates Weekly - Last Update: 9/14 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.16% +0.07 0.68 15 Yr. Fixed 6.57% +0.06 0.94 30 Yr. Jumbo 7.11% +0.07 0.55 Updates Weekly - Last Update: 8/16 MBS / Treasuries UMBS 30YR 6.0 99.88 -0.13 Price / Yield Change MBS UMBS 6.0 99.88 -0.13 GNMA 6.0 100.20 -0.16 Pricing as of: 9/14 5:31PM EST 10 Year US Treasury 4.2880 +0.0340 Price / Yield Change US Treasury 2 YR Treasury 5.020 +0.049 5 YR Treasury 4.422 +0.039 7 YR Treasury 4.376 +0.036 10 YR Treasury 4.288 +0.034 30 YR Treasury 4.384 +0.041 Pricing as of: 9/14 5:31PM EST Latest Video CPI and PPI were not enough to change Fed policy in September, says Odyssey... The strength of the labor market is driving the ability to borrow, says Bof... August wholesale inflation data comes in hotter than expected The European Central Bank hikes interest rates by a quarter percent Around the Web CNBC August wholesale inflation rises 0.7%, hotter than expected Calculated Risk Blog Part 2: Current State of the Housing Market; Overview for mid-September CNBC Heres the inflation breakdown for August 2023, in one chart Reuters ECB raises rates but signals end of policy tightening Calculated Risk Blog Realtor.com Reports Weekly Active Inventory Down 5.1% YoY; New Listings Down 7.1% YoY Calculated Risk Blog Part 1: Current State of the Housing Market; Overview for mid-September Calculated Risk Blog Weekly Initial Unemployment Claims Increase to 220,000 CNBC August core inflation, excluding food and energy, rose 0.3% hotter than expected Calculated Risk Blog Retail Sales Increased 0.6% in August Calculated Risk Blog BLS: CPI increased 0.6% in August; Core CPI increased 0.3% Calculated Risk Blog YoY Measures of Inflation: Services, Goods and Shelter CNBC European Central Bank hikes rates to record level as inflation risks outweigh economic gloom CNBC Treasury yields hold steady as investors assess inflation data

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