A Ceiling That Actually Matters

The debt ceiling debate is all over the news, but it's a different ceiling is commanding more of the bond market's attention. Still, we wouldn't say the debt ceiling is irrelevant, so let's take a brief moment to address its implications for the housing and mortgage markets. The most direct effect of the debt ceiling debate is a general ebb and flow of risk sentiment in the market. If it's resolved without issue, investors may be slightly more interested in buying stocks and selling bonds. The latter puts upward pressure on interest rates and it was the general theme this week. The 10yr Treasury yield is a good benchmark for rate momentum. Some of this week's upward momentum may be attributed to potential progress on the debt ceiling, but we really didn't see any compelling evidence that traders were on the edge of their seats over political drama. It would take a true "default" on US debt to roil markets, and that's tremendously unlikely. Markets found the Fed and the economic outlook to be much more worthy of attention this week. Retail Sales data on Tuesday morning set the tone for the week. Traders were more receptive to the slew of Fed speakers who echoed the same general sentiment: the fight against inflation is far from over and the data will determine when the Fed is done hiking rates. At the start of the month, just after the last Fed meeting, market participants had almost fully priced out additional rate hikes. By the end of this week, we're back up to nearly a 50% chance of another hike in June (rate outlook of 5.0% moved up to 5.11%, which is about half of a 0.25% rate hike).

May 19, 2023 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch A Ceiling That Actually Matters The debt ceiling debate is all over the news, but it's a different ceiling is commanding more of the bond market's attention. Still, we wouldn't say the debt ceiling is irrelevant, so let's take a brief moment to address its implications for th... (read more) MBS Commentary What The Range Breakout Means For The Outlook What The Range Breakout Means For The Outlook With bonds seeing additional weakness after breaking above 3.60% yesterday, we could consider the breakout to be "confirmed" in a technical sense. But what ... (read more) Rob Chrisman Process Streamlining, Accounting, Servicing Tools; Orion Waiving U/W Fees, Wholesale News For me, yesterday involved a trip from Connecticut to Northern California, with talk of a lack of inventory, relatively high mortgage rates, and loan level price adjustments still echoing in my head from the CMBA conference. There isn’t much one can ... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.90% +0.08% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.90% +0.08 0.00 15 Yr. Fixed 6.25% +0.06 0.00 30 Yr. FHA 6.55% +0.10 0.00 30 Yr. Jumbo 6.55% +0.05 0.00 5/1 ARM 6.88% +0.03 0.00 30 Yr. VA 6.52% +0.08 0.00 Updates Daily - Last Update: 5/19 15 Yr. Fixed Rate 6.25% +0.06% Rate Change Points Freddie Mac 30 Yr. Fixed 6.39% +0.04 0.00 15 Yr. Fixed 5.75% 0.00 0.00 Updates Weekly - Last Update: 5/18 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.57% +0.09 0.61 15 Yr. Fixed 5.96% +0.05 0.68 30 Yr. Jumbo 6.46% +0.13 0.38 Updates Weekly - Last Update: 5/17 MBS / Treasuries UMBS 30YR 5.0 98.48 -0.17 Price / Yield Change MBS UMBS 5.0 98.48 -0.17 UMBS 5.5 100.03 -0.11 GNMA 5.0 98.77 -0.19 GNMA 5.5 100.00 -0.06 Pricing as of: 5/19 5:31PM EST 10 Year US Treasury 3.6750 +0.0240 Price / Yield Change US Treasury 2 YR Treasury 4.270 +0.010 5 YR Treasury 3.734 +0.046 7 YR Treasury 3.713 +0.044 10 YR Treasury 3.675 +0.024 30 YR Treasury 3.933 +0.023 Pricing as of: 5/19 5:31PM EST Latest Video Fed Chair Powell's commentary had heavy emphasis on price stability, says B... Jerome Powell: Banks remain strong and resilient, and well positioned to fa... Former IMF chief economist on why the current banking crisis is unlike the ... Former Fed chair Ben Bernanke discusses banking sector fallout from SVB col... Around the Web Black Knight Why Home Prices Are High, Even With Falling Demand CNBC Fed Chair Powell says rates may not have to rise as much as expected to curb inflation forexlive Feds Bullard: Higher rates are insurance against inflation. Leaning toward a June hike. Calculated Risk Blog Q2 GDP Tracking: Around 2% Eye on Housing Custom Home Building Contracts CNBC 2-year Treasury yield falls as investors weigh Fed speaker comments, interest rate outlook Calculated Risk Blog Similar Number of Housing Units started in Q1 as 'Built-for-Rent' as 'Built-for-Sale' CNBC Watch Fed Chairman Jerome Powell speak live on monetary policy The Basis Point 27% of homebuilders reduced prices and 54% offered buyer incentives in May Calculated Risk Blog Realtor.com Reports Weekly Active Inventory Up 23% YoY; New Listings Down 25% YoY Calculated Risk Blog NAR: Existing-Home Sales Decreased to 4.28 million SAAR in April; Median Prices Declined 1.7% YoY Eye on Housing NAHB Debuts New Index for Multifamily Activity Calculated Risk Blog Hotels: Occupancy Rate Down 2.0% Year-over-year

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