October 19, 2023 – Rate Commentary

• October 19, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

Rate sheets continuing to worsen today, and with lots of Fed speakers we could see reprice risk as the day goes on. Although cautiously floating to start the day is ok, I’ve given up on rates rebounding after the vicious jump we’ve seen in the last week and instead it looks like we will continue to see them get worse, so I’m back to a locking stance.

Loans closing in less than 15 days should cautiously float to see how the day goes, but I admit I’m ready to throw in the towel here and ready to lock these terrible rates. I continue to get hung up on the fact that we’ve seen mortgage bonds lose -200bps in a week… that is just ridiculous, and begs for a correction. However, no correction is guaranteed, especially with no economic data or anything other than geopolitical tensions that could point to improvement ahead of the Fed meeting in two weeks.

Loans closing in 15-30 days should consider locking, as rates look ready to move worse rather than improve.

Loans closing in 30+ days should also consider locking, despite the move higher in rates. 

Technicals:

The UMBS 6.0 coupon is at 96.56, -22bps on the day.

The 10yr Treasury yield at 4.95 and everyone is waiting for it to break 5% now.