Inflation came in very tame- below expectations. Tariffs were supposed to be a huge tax on consumers and yet it’s not showing up in any of the data as of yet, though predicted to for a couple months now (still think they are dumb- again/ but the experts are taking another L so far here)
Jobs overperformed so that didn’t help the interest rate market last week, but stop me if you’ve heard this before they revised prior two months down 90k, the market shrugs and sells off so we get to ride the roller coaster again.
When I was out in LA for a mortgage junket the head of the DC branch said they are working on some banking deregulation as it relates to banks owning 10 year treasuries that should be really good for the 10 year market/ disagreements as to whether it will be more like 40 bips or more like 70 bips. After I heard that in LA Habib started talking about that a week or so ago.
Finally, spread between mortgage rates and 10 year topped out at 3 or so last year. It’s at 2.5 more or less right now. Historically that number is 2. As some of the volatility is sucked out of the market that number should continue to tighten to historical norms around 2.
I know everyone here likes to talk about omg the sky is falling because that’s fun, but there are some green shoots for the industry right now and if this stuff all comes to pass we could be looking at 5.5-6 depending upon how much the spread tightens up and how much the deregulation helps.
That’s the optimist case for housing/interest rates.
I’m fully prepared now for a negative run and everyone cussing me and saying it’s all my fault.