“New Normal” for mortgage rates, or Surprises on the horizon?
Mortgage rates this week are most likely to continue hovering in their most recent range; however, it is notable that certain sectors of mortgage rates crept up in line with the 10-year yield (which rates most closely follow). If this is the first time you’re hearing this. The 10-year yield and mortgage rate directions follow one another relatively closely, closer than any other chart in fact. Therefore, for a general sense of How-did-rates-get-here and Where-are-they-going-next, the 10-year yield is a pretty reliable running mate. Remember that in the end, the mortgage-backed security market determines market rates and then all your personal qualifications, program type and features. If you’re looking for a general sense of where rates are going then you watch the 10-year yield, and if you are looking to find out what rates look like for your specific scenario then you need to contact your loan officer.
On a really short market week like this one there is a very low-level chance for there to be disruptions in the mortgage industry or mortgage rates. Although there is a lot of important economic data coming out the overall general consensus about the markets is that buyers have accepted the new interest rate ranges and have come to terms with the availability, or unavailability, of inventory depending on ones local market. Therefore, it is safe to assume that what we are experiencing on a week like this is most likely to continue for the next several weeks as we look into the end of the month towards the next fed meeting. THAT will be the next really important indicator of what the rest of 2023 will look like.
And as always it is most important that you stay connected to your loan officer. If you want to buy a house in 2023 or even in 2024 it is more important than ever that you get that process started early and develop a plan of attack that sets you up for the best buying experience possible. As we have begun to see in our local market in San Diego buyer demand is starting to cause more jockeying and positioning among qualified buyers, and sellers are able to take their pick from the litter. This means for every listing there are again, numerous offers being made, each of which could all close on a sale. But since only one can go to escrow that leaves all others back out on the path of House hunting right alongside you. So get a head start, make a plan, become super disciplined and close on that house you want!
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And now here’s a quick look at what we’re watching in the markets this week:
Monday: The ISM Manufacturing PMI comes out and has had a pessimistic reading each month in 2023. This weeks forecast won’t turn that around in just one month. And as we get deeper and deeper into the year the weight of this pessimism adds pressure to the recession conversations, whether we feel like we’re in one or not. In the end, manufacturing matters.
Tuesday: is the 4th of July. Happy Birthday America! All banks and U.S. Markets are closed. Enjoy your day off if you get one 😊
Wednesday: The Fed meeting minutes come out, and there should be no dramatic changes in the notes that differ from what Jerome Powell stood at the podium and read aloud. Anyone interested in reading these notes will be scouring for any crumbs that indicate rate hike factors in order to try and get ahead of the Fed’s next moves.
Thursday: ADP Non-Farm Employment Change, JOLTS and Unemployment claims all come out. These ARE going to be closely watched because the Fed needs that labor market pain in order to justify ramping up rates still. We also get ISM Services PMI on this day. It’s the biggest day of the week.
Friday: We have Average Hourly Earnings month over month, Non-Farm employment Change, and unemployment rate. So it’s a short week, with a lot of future pacing data packed inside.
And that’s it for this week, like this video, Subscribe to the channel, and turn on notifications so you catch every episode.
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