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It may not be the death by a thousand cut, but roughly 5 cuts are causing mortgage rates to bleed. Notably, the last 5 days have seen a continuous swing higher. The whole affair has been fairly stable relative to the volatile swings that have been very common for most of the past year and a half.
The average lender is now at its highest level since early March, just before the Silicon Valley bank failure, which caused a flight to safety, leading bond/rates to recover significantly.
Despite the unfriendly movement, we are not necessarily in constant danger. Unfortunately, it is equally fair to say that we are not expecting a sustained decline in rates for any particular reason. This comparison speaks to the recent indecision of the rate market and the fact that we await a clear case for or against inflation returning to lower targets.
In other words, rates could be at a 2-month+ high, but that’s more contingent than predictable. They may move slightly higher without violating the broad consolidation that has been taking place since late 2022. We continue to expect that it will take weeks to confirm the direction of the next major trend, and that we will have 2-way volatility within one. The boundary between now and then.
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