Nothing moved today, and there is no honest way to dress that up. Bankrate's 30-year printed 6.72% for the third straight session, the 10-year finished the week at 4.69% against 4.65% the week before, and VIX at 16.01 says the bond market is not pricing any near-term stress. The standing backdrop is the July 28-29 FOMC minutes: nine participants held the target range at 3.50-3.75%, three dissented in favor of a quarter-point increase, and the Committee recorded that inflation risks are skewed to the upside with price pressures looking broad based. That is the reason the 6.7% handle has not broken lower — there is no cut in the pipeline to price in.
This week finally puts data back on the board. Case-Shiller lands Tuesday, New Home Sales through Wednesday, jobless claims and the Freddie Mac survey Thursday, and Core PCE Friday. Core PCE is the only one with the weight to reprice the September 15-16 FOMC meeting, and that meeting carries a Summary of Economic Projections — the dot plot gets refreshed alongside the statement. With three hike dissents already on record, a hot PCE print has more room to push the range up than a soft one has to push it down. Anything short of a PCE surprise and we finish the week inside the same band we have been in since late July.
Today's 6.72% sits two basis points under the 30-day average of 6.74% and eight above the 90-day average of 6.64%, inside a 30-day band of 6.67-6.82% and a 90-day band of 6.47-6.82%. Flat, in other words, and mid-range. The more useful read this week is the spread stack rather than the headline number: FHA is at 6.38% and VA at 6.40%, both roughly a third of a point under conventional; the 5/1 ARM is at 6.36%; the 15-year is at 6.10%; and jumbo at 6.78% is only six basis points over conforming, which is an unusually tight premium. On a $400,000 loan, the FHA number is about $89 a month cheaper in principal and interest than the conventional number — a bigger delta than anything the market has handed you in the last 30 days of rate movement.
That makes today a product-fit day, not a timing day. The borrower who benefits most is the one who has been quoted conventional and never re-run on a government program, or the move-up borrower sitting on enough equity to carry a 15-year. Do this today: pull every quoted-not-locked file from the last 45 days, flag the ones with FHA or VA eligibility that were only ever priced conventional, and re-run each one at 6.38% or 6.40% before Friday's PCE print — the spread is available right now and the print may not leave it there.