Daily Rate Summary
Friday, June 23, 2017

Mortgage Rates Steady Treasury Yields Unchanged.
On Thursday, Treasury bond yields were steady and interest rates remained near the lowest levels so far for 2017. Mortgage Rates (despite the Fed June Rate Hike of 0.25%) have fallen nearly to the lowest levels of the year. The September 10 Yr. U.S. Treasury Note stood at a yield of 2.1477% and the 30 Yr. U.S. Treasury Bond yielded 2.7163%. 30 Year Mortgages according to Freddie Mac were around 3.90% for conforming and 4.23% for Jumbo products.

Since the March 15^th meeting of the FOMC, Credit Spreads have significantly narrowed and the Treasury complex has continued to price in a deterioration of the US Macro Conditions in June. This has extended the lower-for-longer narrative and created a window of opportunity for borrowers seeking mortgages for refinances & new home purchases as Mortgage rates stay at low levels (see Chart below).

New Home Sales vs Mortgage Rates (Inverted) (Courtesy of Zerohedge.com)

In May, Sales of New Homes rose strongly to an annualized rate of 610,000 units as Mortgage Rates continue to improve for the spring home buying season. The month-to-month increase in home sales included a big revision to April data which was originally report as 569,000 down -11.4% and was subsequently revised upward to annualized rate of 590,000 down just -7.6%. The big surprise was in the Median New Home Sale Price. According to the National Association of Realtors, the May 2017 Median New-Home price for all housing types was an all-time record at $345,800.

Historical New Home Sales & Price (Courtesy of Zerohedge.com)

This is an 16% run-up in the Median New Home price in the first quarter of 2017 (see Chart below).

U.S. Median New Home Price Index (Courtesy of Zerohedge.com)

Weekly Mortgage Rates Analysis

As can be seen from Freddie Mac's Mortgage Market Survey, last week, 30 Yr. Fixed Mortgage rates for conforming loans hit 3.90% inching down 0.01% basis point from last week.

Treasury Prices Rise and Yields Fall for U.S. 10 Yr. and 30 Yr. Treasuries.
At the Chicago Board of Trade (CBOT): the US 10 Year Treasury Note futures Contract for September settlement closed at a price of 126'21.5 / 32nds; the 10 Year Note was up 0.5 basis points (bps) on the day, yielding 2.1477%. The US 30 Year Treasury Bond futures Contract for Sept. settlement closed at a price of 156'15 / 32nds; the 30 Year Bond was down 1 basis point (bps) on the day, yielding 2.7163%. Mortgage Rates are near their lowest point so far in 2017, down -0.01% bps from the previous Freddie Mac Survey last week.

Thanks to ZeroHedge.com and FreddieMac.com for Charts and Graphics.

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Disclaimer: The Information & content in this message is solely the opinion of the author and believed to be from reliable sources. Charts and tables contained herein were taken from other sources and a best effort was attempted by the author to give attribution where possible. None of this material should be construed as fact, and is not intended for use by reader as investment advice or relied upon for making financial decisions.