November 21, 2023 – Rate Commentary

• November 21, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

Rate sheets this morning may be a little bit better than yesterday, reflecting a small improvement in mortgage bonds. Reprice risk on the day is low, there is no imminent danger to seeing rates move higher from here. The outlook remains that things should be pretty quiet ahead of the holiday, despite tomorrow morning bringing in jobless claims, durable goods, and consumer sentiment data. If the data came in strong enough to make some waves, any moves we do see are likely to be short lived. However, if the data comes in showing a bit of weakness, we could see it help bonds have a great day. Be ready for lenders to be a bit more conservative on pricing tomorrow though, ahead of the holiday.

For loans closing in less than 15 days, cautiously float, but don’t be afraid to lock it if you love it. If you are thinking of locking anything, consider doing so today ahead of tomorrow’s data if you’re worried about losing ground. However, if the data comes in favorably for bonds  tomorrow, we could see the best rate sheet of the week.

For loans closing in 15-30 days, float. Loans that have time want to wait and see what the jobs data brings after Thanksgiving (it will all come the first full week in December), as well as the next round of inflation data on the 12th. The Fed meeting is on the 13th, with Fed Chair Jerome Powell’s press conference, and that could help rates improve.

For loans closing in 30+ days, float. The current outlook is that with another jobs report showing a solid but softening labor market, and another CPI report 12/12 right before the Fed meeting concludes on the 13th, these loans have the best shot of seeing even lower rates if data continues to come in favorably.

Technicals:

The UMBS 6.0 coupon is at 99.78, and although that is flat on the day it is still a little bit better than yesterday.

The 10yr Treasury yield at 4.41, quite a bit better than yesterday.