Resilience in The Housing Market as Powell Sees More Hikes Ahead

A majority of the housing market data on any given month tends to come out mostly on the same week. This was that week and the takeaway was that the housing market could be doing worse. Some might even argue that we're seeing some resilience relative to the rate landscape. Let's refresh our understanding of the rate landscape first. The bond market (which drives interest rate movement) has been broadly sideways recently as investors wait to see how quickly inflation (bonds' biggest concern) is subsiding. That "wait and see" approach prompted the Fed to hold its policy rate steady at last week's meeting, but that was widely expected by the bond market and thus not worth much of a reaction. Fed Chair Powell gave his regularly-scheduled congressional testimonies this week and had a chance to talk a bit more about where the Fed sees things going from here. We already knew the average Fed member saw about 2 more rate hikes before achieving a terminal "ceiling" level, assuming the economy evolved as expected, but Powell was able to clarify what "as expected" meant. Interestingly enough, the additional hikes are not seen happening in response to some additional upward momentum in inflation or economic growth. Rather, the Fed's baseline expectations call for continued cooling in the labor market, modest economic growth, and continued cooling in inflation. In other words, inflation and the economy have a very low bar to justify a few more rate hikes. Things would have to deteriorate pretty abruptly for the Fed to abstain. Moreover, if things improve a bit better than expected, we could be looking at more than 2 additional hikes.

June 23, 2023 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Resilience in The Housing Market as Powell Sees More Hikes Ahead A majority of the housing market data on any given month tends to come out mostly on the same week. This was that week and the takeaway was that the housing market could be doing worse. Some might even argue that we're seeing some resilience relative... (read more) MBS Commentary Still Waiting For a Breakout After Friday's Uneventful Strength Still Waiting For a Breakout After Friday's Uneventful Strength Friday began with solid gains courtesy of weak PMI data in Europe overnight and some follow-through buying in early US trading. Sellers su... (read more) Rob Chrisman Automation, ROI Calculation, Homeowner Engagement Tools; STRATMOR on AI Adaption; Rates and Builders Time is an interesting construct. The solstice is officially behind us, and we can officially hum “The Boys of Summer” with impunity. Time… “5,000 years of eating bread. And in less than a decade it seems half the population is allergic to gluten!” S... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.92% -0.03% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.92% -0.03 0.00 15 Yr. Fixed 6.30% -0.02 0.00 30 Yr. FHA 6.62% -0.01 0.00 30 Yr. Jumbo 6.72% +0.02 0.00 5/1 ARM 6.90% -0.04 0.00 30 Yr. VA 6.62% -0.03 0.00 Updates Daily - Last Update: 6/23 15 Yr. Fixed Rate 6.30% -0.02% Rate Change Points Freddie Mac 30 Yr. Fixed 6.67% -0.02 0.00 15 Yr. Fixed 6.03% -0.07 0.00 Updates Weekly - Last Update: 6/22 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.73% -0.04 0.64 15 Yr. Fixed 6.26% +0.01 0.71 30 Yr. Jumbo 6.80% +0.01 0.49 Updates Weekly - Last Update: 6/21 MBS / Treasuries UMBS 30YR 5.0 98.44 +0.34 Price / Yield Change MBS UMBS 5.0 98.44 +0.34 UMBS 5.5 99.91 +0.22 GNMA 5.0 98.66 +0.33 GNMA 5.5 99.88 +0.19 Pricing as of: 6/23 5:31PM EST 10 Year US Treasury 3.7370 -0.0600 Price / Yield Change US Treasury 2 YR Treasury 4.750 -0.041 5 YR Treasury 3.993 -0.051 7 YR Treasury 3.873 -0.053 10 YR Treasury 3.737 -0.060 30 YR Treasury 3.811 -0.059 Pricing as of: 6/23 5:31PM EST Latest Video Discounted real estate debt 'the biggest opportunity over the next 2 or 3 y... The Fed will 'make the mistake' of raising rates again this year, says Virt... Florida making it illegal for some foreigners to buy real estate Strength in the services sector is beginning to falter, says Annex Wealth's... Around the Web Calculated Risk Blog Final Look at Local Housing Markets in May Calculated Risk Blog Q2 GDP Tracking: Around 1.5% Calculated Risk Blog Black Knight: "Past-Due Mortgages Approach Recent Record Lows" in May Wall Street Journal Central-Bank Action Finally Cooling Global Economy CNBC Home sales barely budge from April to May in sluggish spring market CNBC Treasury yields decline as investors digest Fed speaker comments Calculated Risk Blog NAR: Existing-Home Sales Increased to 4.30 million SAAR in May; Median Prices Declined 3.1% YoY Reuters U.S. jobless claims hold steady at 20-month high, current account gap widens CNBC Fed Chair Powell says smaller banks likely will be exempt from higher capital requirements CNBC Watch Fed Chair Jerome Powell speak live to Senate banking panel CNBC Bank of England surprises with 50-basis-point rate hike to tackle persistent inflation Calculated Risk Blog Hotels: Occupancy Rate Down 1.1% Year-over-year CNBC CNBC Daily Open: Everybody's fighting inflation

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