Shocking absolutely no one… interest rates continued their typical roller coaster ride this past week, ending with some minor relief as the 10-year Treasury yield retreated from the recent high of 5.006% to 4.845%.
Mortgage rates are priced and determined by many factors, but the MBS (mortgage-backed securities) bond is the best guide to follow ‘the market’. Now it’s incredibly hard to find a live MBS market tracker without a subscription service so the best overall guide from the consumer perspective that won’t cost you is to watch the 10-year Treasury yield. To keep it painfully simple, if the 10-year yield increases, mortgage interest rates will also increase, and if the yield drops, rates (typically) drop as well.
As for economic conditions, the US consumer continues to show that they’re still spending money, which doesn’t bode well for any Fed rate cuts anytime soon. We need to plan for this “higher for longer” rate narrative. It is what it is and the investment in the 1-point rate quote makes more and more sense every day.
This week, we’ve got Consumer Confidence and Case-Schiller reports before the Fed announcement on Wednesday.
There’s a 90% likelihood that the Fed will stay flat this month, but seriously brace yourself if they hike rates this go-around. Employment data will be released at the end of the week.
Reporting some additional fun and super shocking news, mortgage applications for home purchases are down sharply throughout the country; it’s clear the interest rate pain has certainly hit the masses.
