Mortgage rates wary about ceasefire as bond bloodbath takes a pause 🫣🔪⏸️
Midweek Market Update
Included in this update are the following sections:
MIDWEEK RECAP ⏪
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Iran has rejected the current ceasefire proposal, while listing their own 5 conditions for ending the war.
A complete halt to “aggression and assassinations” by the enemy.
The establishment of concrete mechanisms to ensure that the war is not reimposed on the Islamic Republic.
Guaranteed and clearly defined payment of war damages and reparations.
The conclusion of the war across all fronts and for all resistance groups involved throughout the region
International recognition and guarantees regarding Iran’s sovereign right to exercise authority over the Strait of Hormuz
This positive shift in discourse has at least stopped the bleeding … for now.
However, absent a permanent de-escalation in the Strait of Hormuz, bonds are going to remain skittish.
Meanwhile, oil prices are still hovering around $90 per barrel.
IMPACT CALENDAR 📅
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The slight improvement today in MBS is hardly worth celebrating in the context of how much bonds tanked the last 3 weeks, and economic data can only hurt at this point.
Yesterday’s ugly 2-Year Treasury auction shows how difficult it is to price risk even in the short term.
Fortunately, there are no major data releases the rest of the week, but it doesn’t mean Friday’s consumer sentiment can’t rip off the scab.
RATE PRICE INDEX 📉
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Mortgage rates do not rise or fall, instead the PRICE of rates change.
The LendZen Index calculates a daily change in the price of mortgage rates by tracking a spectrum of mortgage-backed securities (MBS).
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Mar 24: +32 bps ($320 per $100K)
5-Day: +89 bps ($894)
10-Day: +122 bps ($1218)
30-Day: +182 bps ($1819)
120-Day: +88 bps ($880)
Learn more about the LendZen Index and explore the full data series at LendZen.substack.com
Mortgage rate prices are nearly 200-bps higher on average since the February 27 lows, and well above the highs that held in place all the way back to October.
MORTGAGE SPREADS 🧈
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Published daily with the LendZen Index is the LendZen Mortgage-Treasury Spread.
The LMTS uses actual bond yields to create a historically consistent, and reliable, data set.
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Mar 17: 1.00
Mar 24: 1.11
24h: +5 bps
5d: +11 bps
12m Avg: 1.13
YoY: -18 bps
Learn more about the importance of accurate mortgage spreads on this Substack post.
The spread between MBS yields and the 10-Treasury Note recently crossed 100-bps for the first time since 2025.
This illustrates how the bond sell-off impacted mortgage rates more than what Treasury bonds alone would suggest.
RATE LOCK GUIDE 🔒
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The LendZen LOCK-O-METER provides borrowers with a risk-weighted score based on how various macroeconomic events, including market data, central bank announcements, and geopolitics, each historically impacts the price of bonds.
higher risk scores = lean towards locking
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Closing Window
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[ 15 Days ] — 93 🔴
Rapid deterioration in mortgage bond prices from ongoing geopolitical escalation and oil shock keeps short-term risk extremely elevated; light calendar offers little relief.
[ 30 Days ] — 73 🟠
Inflation fears from energy prices and Middle East conflict dominate, with no major data to offset the sell-off; lock bias remains strong in this window.
[ 45 Days ] — 61 🟡
Geopolitical uncertainty and recent price reversal add caution, but longer horizon allows time for stabilization if Middle East tensions ease.
[ 60 Days ] — 45 🟡
Broader bond-friendly macro trend is under pressure from energy-driven inflation psychology; uncertainty is clearly elevated, but the longer view still offers float potential if oil trade stabilizes.
Thanks for reading.
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