October 13, 2023 – Rate Commentary

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

Rate sheets will be a little worse than yesterday, although they should be better than any reprices worse you saw yesterday. Reprice risk on the day is low, we should have a quiet day, but as we saw yesterday there is still always a chance of seeing bonds move more than expected. We should be done with seeing rates move higher and higher, but now we’ll go back to a more normal ebb and flow… meaning rates will fall a bit, creep higher a bit, fall back a bit, and then do it all again. There is no reason to expect rates to fall significantly from here, not until next year or if the economy shows real signs of struggling before then.

Loans closing in less than 15 days can cautiously float, we may see pricing improve a bit next week from here although it is not guaranteed.

Loans closing in 15-30 days can cautiously float, basically waiting to see what the Fed says at its meeting at the end of the month, and we could see rates improve a bit more then. There is little risk to floating these loans though, so let’s keep doing that.

Loans closing in 30+ days should also cautiously float, there is little risk to these loans for floating and they can keep options open. That said, I still don’t think we will see rates fall much from here anytime soon, but we could see some days that have better pricing than others.

Technicals:

The UMBS 6.0 coupon is at 98.13, +16bps on the day although still a bit worse than yesterday around this time.

The 10yr Treasury yield at 4.62, recovering from the 4.70 that it closed at yesterday.