Mortgage rates brace for next beat down as job data awaits 🤕⌛📊
The Week Ahead
WEEK AHEAD 🗓️
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What is there to be said that hasn’t already been said in the last three weeks?
The oil price shock and inflationary impact of the surprise military operation in Iran have left mortgage rates on life support.
Since revisiting multi-year lows on February 27th, the price of mortgage rates has skyrocketed higher an average of 223 basis points.
This means the same rate will now cost you $2,229 more per $100k of loan amount, or a whopping $11,145 on a $500k loan.
Although the punishment has been felt across the entire bond market, mortgage bonds (MBS) have sold off more aggressively than government bonds.
MBS-Treasury spreads are now 23-bps wider than before the conflict began.
This has pushed the pain threshold to the max for mortgage rates, especially those tied to lower end MBS coupons (i.e., 4.5, 5.0).
Unfortunately, the situation in the Middle East continues to escalate and the economic data this week has potential of being the final blow for mortgage rates in what has been an endless beatdown since March began.
Already one of the biggest market movers, the Non-Farm Payroll employment report could put the nail in the coffin for the Spring homebuyer season before it even begins.
Also on tap is the Case-Shiller home price data, and a variety of labor market related reports including job openings (JOLTS) and Challenger layoffs.
Does Good Friday help mortgage rates rise from the dead with a Hail Mary ceasefire... or will the econ data deliver another kick in the groin for bonds?
Let us pray…
Stay tuned for the Lock-O-Meter rate lock guide tomorrow as part of the Mortgage Rate Price Tracker.
Thanks for reading.
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