10-Year Yield and Mortgage Interest Rates
10-year yields and mortgage rates were interesting last week.Gandalf line in the sand (3.37%-3.42%) A strong run, the 10-year yield turned around and rose, but not this time, dropping below 3.50% on Friday.
The chart below shows how the weekly 10-year yield ended with lower bond yields. Because 10-year yields rose more aggressively and mortgage rates rose very quickly. That was not the case last week. This means that for now it’s stuck at a lower level. In fact, I wouldn’t be shocked if the 10-year yield tried to dip below the Gandalf line again this week.
Mortgage interest rates rise last week 6.38%became as high as 6.61%end time 6.57%, which seems high for a 10-year yield. The banking crisis stressed the mortgage-backed securities market, pushing interest rates higher than normal. In this article, we talked about how we will see mortgages tighten during the next recession.
There was some fireworks potential last week, but it was fairly muted.We have four labor market reports to deal with this week.
weekly housing inventory
Look at the Altos Research Looking at last week’s data, the big question is whether we’re finally starting to see seasonal inventory increases in the spring. The answer is no, as the 2023 active list hit a new low last week. We’ll have to wait and see if April will be that month.
- Weekly stock change (March 24-31): 413,169 To 410,028
- Same week last year (March 25-April 1): 251,522 To 252,820
- The bottom of 2022 is 240,194
As you can see in the chart below, we are far from normal inventory channels and it is difficult to bring inventory back to pre-COVID-19 levels.
Last year, the bottom of the weekly seasonal inventory was set on March 4th. We need to see the bottom of the week in 2023. This looks similar to his 2021 data, which bottomed out on April 9th.
of NAR Data from decades ago shows how difficult it was to get things back to normal on the active listing side.For example, over the last few months, when monthly sales were hovering around 2007 levels, total active listings were Four a millionToday, according to our previous Home Sales Report, we are 980,000 Total active list. Inventory is incredibly tight.
New listings data fell last week and continue trending toward all-time lows in 2023. This trend of slowing new listing growth has been going on for some time, with no major reversals in the data lines. Unlike 2021-2022, which trended similarly to the previous year, the final weeks of 2023 show a noticeable gap, as the chart below shows.
Here are the weekly numbers to see the difference in the new list.
- 2021: 59,908
- 2022: 56,774
- 2023: 49,234
Compare them with the previous year.
- 2015: 79,706
- 2016: 70,141
- 2017: 87,639
As you can see from the data above, homeowners are not in a rush to sell because, as I’ve always talked about, homeowners are acting like leveraged stock traders or like a crazy home crash. Because I’m not afraid of living in the dark. people. The unwillingness to sell further hinders inventory.
Purchasing application data
One of the most improved housing market data lines after November 9, 2022 is purchase requisition data. This explains why the latest existing home sales report had one of the most significant monthly sales performances ever. Pending home sales reports are also up for the third time in a row.
Purchase requisition data increased +2% week-over-week for the fourth consecutive week. The index fell -35% year-on-year. This is a reminder that year-over-year comps can be easy, especially in the second half.
As mortgage rates go up and down, the reporting of purchase requisition data becomes wild. Traditionally, this data line has not had this volatility, but 2022 was a historic plunge. The index reached levels last seen in 1995 with three negative prints when mortgage rates went from 5.99% to 7.10%. However, we stabilized the data with 4 consecutive weeks of positive prints.
Keep in mind that this line of data takes 30-90 days to reach sales data. Also, the seasonality of this data line is almost over. I usually focus on this line of data from the second week of January through the first week of May.
There have been some strange economic data in the housing market due to COVID-19 and the interest rate shock, which has fueled some crazy moves. However, prior to this drama, history has stabilized regarding the seasonality of app purchases, and hopefully sooner or later things will return to normal.
one week before
Jobs, jobs and more job data! This week he has four job reports. JOLTS data, ADP So are job reports, weekly unemployment claims, and Friday jobs. Mortgage rates should improve if employment data and wage growth soften.
last week, i was on CNBC talk about how federal reserveFocusing on creating a recession through job losses is not the most effective way to deal with inflation. They have to endure at this stage. Because we are seeing inflation growth slowing and wage growth slowing. The labor market remains tight. Since we haven’t returned to the 1970s economy, the Fed is trying to force an unemployment recession to make jobs easier because it believes we’re back in the 1970s, but it’s not an effective policy.
Also, over the weekend OPEC announced production cutsCrude oil prices rose on Sunday evening, pushing 10-year yields up a few basis points. Already Monday morning, 10-year yields are once again testing key levels with weak manufacturing economic reports.
The Federal Reserve can better sustain economic expansion than limit the damage of the recent banking crisis and push millions of people to the unemployment line. We plan to collect labor data to ascertain the situation.
