This week’s newsletter is all about context when it comes to economic data and market movement. One point of view may provide a clear takeaway while zooming out completely changes the picture. Let’s start with an easy one. The early January mortgage rate rally led to an obvious surge in refinance applications. Taken together with the
Mortgage rates pulled back this week as the bond market digested geopolitical tension. After the 3-day holiday weekend, traders returned to find overseas markets pushing bond yields higher. The lesser of the two motivations had to do with fallout over fiscal issues in Japan which prompted heavy selling of Japanese bonds. There is often a certain amount
First things first: if we take the last 5 days out of the equation, today’s mortgage rates are still the lowest since early 2023. But they spent most of those last 5 days moving up from even lower levels. The changes are small in the big picture, but the distinction is important considering widespread reporting based
This week’s potential volatility was supposed to be all about the big jobs report, but an unexpected headline completely stole the show. On Thursday afternoon, Trump announced he would be directing his representatives to buy $200bln in mortgage-backed securities (MBS). These are the bonds that directly impact mortgage rates and such a level of buying would
The two most important economic reports of the month were released this week. Both showed promising results for rates, and although rates improved, the reaction was smaller than expected. First up was November’s jobs report, which came out on Tuesday morning. It showed the highest unemployment rate since 2021 at 4.6%–well above the 4.4% forecast. Under normal
Friends don’t let friends believe the myth that Fed rate cuts result in lower mortgage rates. If you’d rather not immerse yourself in the “why,” here is a solid “what:” This isn’t an anomaly. The Fed Funds Rate governs loans that last less than 24 hours whereas a mortgage can last 30 years. Loans of different
