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MBS Highway Daily Update 06/16/2023

Current position: Carefully Floating

Stocks are higher and mortgage bonds are lower to start the day, giving back most of their gains from yesterday.

In the absence of news, we wanted to share with you some strategies for gaining business in the current environment.

We are seeing multiple offers return, and according to Redfin, over 33% of transactions have been sold over asking price.

How can you help customers evaluate if they should proceed, how long it will take to breakeven, and what the financial opportunity looks like? Make sure to watch the example in today's video and use the Bid over Ask feature under the Real Estate section of the website.

You may also have customers who are delaying a purchase because they want to wait for rates to come down. We have shared with you the recent appreciation figures from the 5 main appreciation sources in the US, all of which show that home prices have started to rise again since February and are accelerating.

Make sure to use the Cost of Waiting tool under the Loan Advisor section of the website to quantify for your customers how much they would miss in appreciation and amortization vs. the savings they would have with a 1% lower rate. In most cases, they would be giving up thousands of dollars, even factoring in the cost of refinancing when rates do come down, if they were to wait.

Next Week

Monday: Markets closed in observation of Juneteenth, NAHB Housing Market Index

Tuesday: Housing Starts and Permits

Wednesday: Mortgage Apps, Powell Speech, 20-year Bond Auction

Thursday: Initial Jobless Claims, Existing Home Sales

Technical Analysis

Mortgage bonds are battling with support at the 25-day moving average, which is holding for now. They may be destined to retest the 99.845 Fibonacci support level, which has been an area that bonds have traded at since the beginning of the month.

The 10-year is trading in a very wide range between support at 3.65% and overhead resistance at 3.85%. Looking at the stochastic momentum indicator, there is the beginning of a negative crossover, which would portend lower yields and higher MBS prices ahead. Begin the day by carefully floating.


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