Mortgage News

“57% of all statistics are made up.” Be careful where you get your info—especially from the news media and so-called “experts.”

Take this one: Redfin recently reported that 44% of home sellers offered concessions to buyers. That might sound like a lot, but it was actually higher in 2023 and pretty similar to what we saw before COVID. Context matters.

Right now, the housing market is strong, but the biggest challenge is inventory. That tight supply is keeping home values high, which is great for sellers, but it’s definitely tougher on first-time buyers and those looking to move up.

Shifting gears—literally—goods have to move by truck or ship (see what I did there?). This is a bit of a canary in the coal mine for the broader economy.

The April shipping reports show a sharp rise in “blank sailings”—canceled port stops. These happen occasionally, but this jump is significant: six weeks ago, 30,000 containers were canceled. Now? 370,000. That’s a massive slowdown.

Ports are also reporting a 12% increase in available capacity, which basically means less stuff is coming in.

Then there’s the wealth effect: when the stock market is up, people feel richer and spend more. When it drops—like it has recently—affluent buyers start pulling back on big purchases.

All signs point to a slowing economy, and the chances of a recession are rising.
But here’s the silver lining: mortgage rates are likely to fall.

The Fed has acknowledged that its policy remains restrictive and that the impact of tariffs will likely be a one-time bump in prices.

Overall, the U.S. economy appears to be in solid shape heading into the new tariff environment. We’re near full employment, and inflation has come down meaningfully over the past two years, now hovering around 2.5%.

Goolsbee remains optimistic, suggesting the economy will stabilize and rates will likely come down next year.

Still, I can’t help but wonder if the Fed is navigating by looking in the rearview mirror. At this point, it feels like the cure may be doing more harm than the disease.

J.P. Morgan “The probability of a recession remains at 60% up from 40%”.

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Remember the Hawk verses Dove view. Powell was pretty hawkish and indicated that inflation is more important than labor.

He denied that the FED would help the Stock market but if things got bad enough, he may change his mind.

In response to Powell’s comments, Trump posted on Truth Social and said, “Powell’s termination cannot come fast enough.”

Housing Starts and Permits – Bottom line – more demand than supply.

Initial Jobless Claims fell for the first time 9,000 to 215,000

Continuing Claims rose 41,000 to 1.885M

The housing market continues to support home prices into the future. The Tariffs are going to have a significant impact moving forward including inflation, Jobless claims, PCE, CPI and so on.

Stay tuned rates will go down, and up and down….

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The Bank of America Global Fund Manager Survey revealed that nearly half of respondents expect a global recession, while a majority anticipate a mild recession in the U.S.

As a result, a record number of global portfolio managers plan to reduce their exposure to U.S. equities. Historically, this shift tends to redirect capital into the bond market, which can help push yields lower.

We have an interesting week ahead with Powell speaking tomorrow at 1:30pm and the Retail Sales report.

This is a short one today and will be in training tomorrow.

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First I am a bit Graph Happy today but it helps.

Former Fed Chair and Treasury Secretary, Janet Yellen said the dynamic rise in Treasury yields, simultaneous with the decline in the dollar suggests the investors are beginning to shun dollar based assets.

While it is true that the US dollar moved sharply lower last week and is at its lowest level in three years, its not unprecedented, in fact a few months ago late 2024 the complaint was that the dollar was too strong.

Chaos is never good and right now that is what we have. Money Managers hate chaos and uncertainty.

The US dollar is the dominant reserve currency, with 58.7% ahead of the next one in line. The euro share is 20%. see last graph.

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There are growing fears that we are in a recession already. Larry Fink, the CEO of BlackRock, John Mauldin, and Lacy Hunt all believe we may already be in a recession.

The Federal Reserve may be stepping in sooner than later.

University of Michigan Consumer Sentiment has plunged to 50.8 the lowest level since June 2022 with the index measuring expectations fell to 47.2 the lowest since May 1980.

The Bond Market is not happy and has responded accordingly. 10y UST is over 4.51. last week it was closer to 3.80. This rise drives Mortgage rates up.

But still holding onto rates from beginning of the year.

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Picture this: he’s lining up a shot and says, ‘Watch this.’ Then, like magic, the cue ball hits four rails, weaves past three other balls, and sinks the 8 ball. Impressive—except he never said what we were supposed to be watching for!

Taking credit after the fact is easy, especially when you fill in the blanks—but if you didn’t call ‘net,’ can you really claim it?

Volatility is never welcome—especially among money managers and business owners. When markets swing unpredictably, it creates hesitation, delays decision-making, and leaves even experienced professionals uncertain about their next move.

Nationally rates are getting hit but are still holding some of the gains from earlier this year. Not pretty but not too ugly.

This may be the exact time to get out their and start looking for a home or selling and buying up/down. When more people are on the sidelines you have less competition.

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Typically, when uncertainty strikes, money flows from stocks into the safety of the bond market. However, that hasn’t been the case recently. Instead, investors appear to be staying on the sidelines, hesitant to commit in either direction. The volatility in the market is not just visible—it’s palpable.

Adding to the complexity is the strength of the U.S. dollar. We’re witnessing a rare and unwelcome trifecta—equity market volatility, bond market instability, and currency pressure—all at once.

There’s also speculation that China, the largest foreign holder of U.S. Treasuries, may be selling off some of its holdings. While this could contribute to rising yields, it’s considered unlikely. The bulk of China’s Treasury purchases were made when interest rates were significantly lower, making any large-scale liquidation costly and impractical.

As for mortgage rates—they remain below the highs we saw earlier this year, but we’ve certainly given up some ground. The Federal Reserve is now facing growing pressure to cut the Fed Funds Rate at its next meeting.

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