September 14, 2023 – Rate Commentary

• September 14, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

Rate sheets today likely similar to yesterday, and although this morning’s volatility in bonds makes things a bit rocky, reprice risk on the day is low. Some lenders may actually have a bit worse rate sheets this morning due to bonds losing ground after being in positive territory just a little bit ago, and we could see some reprices better this afternoon if bonds recover. The data this morning – wholesale inflation, retail sales, and jobless claims – all pointing to a resilient economy and strong labor market… meaning not good for rates. The outlook remains that our only shot at seeing rates improve more than a smidge is next week’s Fed meeting. Some folks may start thinking about floating into it, but I feel like hoping for improvement there is still an act of desperation. Still, if you want to keep your options open, cautiously float, but only loans that close in October or later.

Loans closing in less than 15 days should not be considering the gamble of waiting to see what next week’s Fed meeting brings. Lock these loans up, even if you wait a bit until later today to do it.

Loans closing in 15-30 days should consider locking. Loans closing in October that are risk averse should simply lock. However, those looking to gamble and see just what the Fed meeting brings shouldn’t get hurt too much between now and then. I don’t think this Fed meeting is going to help rates much, but the possibility is there. We’ll talk more about it next week.

Loans closing in 30+ days have the least urgency to lock (but should still consider locking). Like I said above, I don’t think that the Fed meeting is going to help much, but the opportunity is there for those that want to wait and see.

Technicals:

The UMBS 6.0 coupon is at 99.86, after some early volatility, down about -14bps on the day and similar to yesterday around this time.

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