Weekly Mortgage Overview: 6/21/2022

What Happened Last Week?

Mortgage Rates Hit 6%. World is Not Ending. May Just Be Beginning.

In a year where mortgage rate volatility has been extreme, this week made everything else look tame by comparison. While it will never show up in weekly survey numbers, the 3-day jump between June 9 and June 14 was one of the biggest on record, taking the average 30-year fixed quote from 5.55% to 6.28% by Thursday afternoon. The pace of that spike is nothing short of staggering considering 5.55% was already near their highest levels in more than a decade.
Continue reading: Matthew Graham, Mortgage News Daily 6/17/22)

What’s on the Agenda for this Week?

Three Things

The three areas that have the greatest potential to impact MBS backend pricing this week are: (1) The Talking Fed, (2) Across the Pond and (3) Inflation Nation.

(1) The Talking Fed: This is a light week for economic data but a full week for Fed Speak. Fed Chair Powell will give his Congressional testimony on Wednesday and then he will do the “dog and pony show” for the Senate on Thursday. Several other key members will also speak this week. The bond market will be focusing on any shift in positions on inflation, rates, and bond purchases.

  • 06/21: Barkin
  • 06/22: Powell, Barkin, Evans, Harker
  • 06/23: Powell, Fed Balance Sheet
  • 06/24: Daly

(2) Across the Pond: The Minutes from all of the major Central Banks’ actions of the past week will be issued, and the ECB will hold a policy meeting. There will also be a huge amount of manufacturing, PPI/CPI, Retail Sales, etc. from European countries and Great Britain.

(3) Inflation Nation: Friday’s UofM Consumer Sentiment Index will get a lot of attention. While it is expected to be very low/weak, the markets are really focused on the forward looking consumer inflation expectations.

Treasury Dump

There will be a very important 20-year Treasury Bond auction on Wednesday.

Market Wrap-up

Taking it to the House

May Existing Home Sales hit 5.41M units which was right in line with expectations of 5.40M, but they were down -3.4% MOM, and -8.6% YOY. On the plus side, the median home price rose to $407,600… this marks the first time in history that it has been above $400K and is a YOY home price gain of 14.8%. This is now the 123rd consecutive month of home price gains.

On Deck for Tomorrow

Fed Chair Powell, 20-year Treasury Bond auction.