Mortgage rates are moving sideways today. The MBS market worsened by -85 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.
Three Things: These are the three areas that have the greatest ability to impact rates this week, according to RateAlert.com 1) Inflation, 2) The Fed and 3) Treasury Sales.
1) Inflation: We get a big report on Thursday with the Consumer Price Index. After Friday’s big jobs beat, a hot CPI report will put extra pressure on rates. The consensus estimates call for the headline YOY CPI to rise from 7.0% to 7.2% and Core CPI YOY to rise from 5.5% to 5.9%. None of those readings would be good for rates.
2) The Fed: As the market continues to hedge for either a 1/4 or a 1/2 point rate hike next month, we will be very focused on any Fed-Speak as it pertains to rates and the timing of their QT.
3) Treasury Sales: Here is this week’s schedule:
02/08 3 year note
02/09 10 year note
02/10 30 year bond.
The reaction to the employment on Friday was the biggest move for the 10 yr. note in at least two years; the employment report, the biggest miss on estimates we have seen in years. The data compared with estimates were not even close.
Looking at the 2 yr. note since early Jan its yield has increased from 0.8% to 1.30% this morning, fully discounting the 50 bp FF rate increase at the March 16th FOMC
69% of Home Owners Say Now is Good Time to Sell.
A monthly survey from Fannie Mae showed home purchase sentiment dipped in January but on the seller’s side, it increased.
The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 2.4 points to 71.8 in January, its lowest level since May 2020, as affordability constraints continue to weigh on the housing market.