September 13, 2023 – Rate Commentary

• September 13, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

WRAP UP
UMBS 6.0: 99.97 (+22bps)
10yr yield: 4.26

After some early volatility, bonds improved to end the day. If you were one of the lucky ones who saw a reprice better – take it. Tomorrow will bring wholesale inflation, but that doesn’t move markets like the CPI did this morning. Consider locking loans for protection unless looking to float into next week’s Fed meeting. Rates are not likely to fall much though.

Rate sheets today likely similar to yesterday, and reprice risk on the day is moderate. The CPI data this morning came in almost exactly as expected, only the core month-over-month was a bit higher. The initial reaction pushed bonds deep into the red, but they rebounded and are settling in just a smidge positive on the day. Not a catastrophe, but definitely not the miracle needed to bring rates lower. I still see little reason to be floating here.

Loans closing in less than 15 days should be locked by now, but if not I’d consider locking them by the end of the day or at the first sign of trouble for mortgage bonds.

Loans closing in 15-30 days should consider locking. With very little reason to expect rates to improve, why float? The only reason to float here is if the loan is going to float into next week’s Fed meeting, hoping for a miracle.

Loans closing in 30+ days have the least urgency to lock (but should still lock). Rates have shown little in the way of improving, and that is not likely to change anytime soon.

Technicals:

The UMBS 6.0 coupon is at 99.83, +8bps on the day but basically the same as yesterday.

The 10yr Treasury yield at 4.28, and like mortgage bonds is exactly where it was yesterday (and the day before).