State of Rates
September 11, 2023
Latest Market Commentary.
August brought its fair share of turbulence, and September kicked off with hopes for a smoother ride, but it turns out we were dealing with "hopium" as rates continued their ascent toward multi-decade highs. At the start of the shortened week, it felt like we were nursing a massive holiday hangover, with rates climbing by 0.125% to 0.25% across all loan types. However, we did witness some positive movement toward the end of the week, with rates increasing by a bit less than 0.125% overall.
This week's economic spotlight focused on one major report: Tuesday's Non-Manufacturing PMI. It surprised everyone by coming in hotter than expected at 54.5, surpassing the forecasted 52.5. Why should you care about the Non-Manufacturing PMI? Well, mortgage rates certainly do, and they reacted accordingly.
The new rate mantra of "higher for longer" seems to have firmly taken hold, with bond traders making their moves accordingly.
While the Consumer Price Index (CPI), once a primary driver in the Fed's rate decisions, has now taken a back seat to the Data Dependent Narrative. Looking ahead to next week, we anticipate potential market volatility with the release of August's CPI report on Wednesday and Retail Sales on Thursday. If either of these numbers comes in hotter than expected, brace for continued upward pressure on rates. Stay tuned for more updates on the evolving mortgage and economic landscape.
Your Weekly Market Movers.
Tuesday Thursday
CPI at 8:30 am Retails Sales at 8:30 am
Should I Lock or Float?
Until the data tells us otherwise, our bias is towards locking rates at application vs. floating until the data tells us otherwise. If you are greater than 60 days out and have the appetite to gamble, there is potential upside by waiting until you’re 30 days out.
The Housing Market in Three.
1.) Purchase rate locks are down 39% from pre-pandemic levels.
2.) MBA - Purchase applications lowest in 28 years.
3.) Existing home sales down 16.6% from same time last year.