This morning's quote carries Friday's close and it is five basis points higher than yesterday. Bankrate's conventional 30-year prints 6.90%, up from 6.85% Friday and 6.83% Wednesday. The driver is the long end: the 10-year closed Friday at 4.96% on Treasury's own par yield curve, up from 4.80% Monday — 16 basis points across the week and four away from a 5% handle. Mortgage News Daily has Friday's morning rally completely erased by the close with nothing behind the reversal but a modest move in oil, which is a bond market that will not hold a bid. The week gave it two reasons: August CPI at 0.4% on the month and 3.4% on the year with core at 0.3% and 2.4%, then the University of Michigan preliminary September sentiment index at 47.8, down 7.5% and the second-lowest reading in the survey's history, carrying year-ahead inflation expectations up to 4.6% from 4.0% and the long-run measure to 3.4%. Yesterday's pulse had the 30-year flat at 6.85% — the move happened into Friday's close.
The FOMC meets Tuesday and Wednesday. The statement lands 2:00pm ET Wednesday, the press conference at 2:30pm, and this meeting carries a Summary of Economic Projections, so the dot plot is the document that sets pricing for the rest of the month rather than the statement language. Between now and then the calendar is light and nothing on it outranks the meeting: housing starts and permits land September 16 through 18, jobless claims and the Freddie Mac PMMS both September 17. The level to watch is 5.00% on the 10-year — it held four basis points below on Friday, and a break above it with the projections still unpriced is the scenario that puts a seven-handle on conventional quotes.
Today's 6.90% sits one basis point under the 90-day high of 6.91% and 43 above the 90-day low of 6.47%, against a 30-day average of 6.761% and a 90-day average of 6.683%. What is worth noticing is that the conventional 30-year is not alone up there — every product on the sheet except one is at or within a basis point of its own ceiling. FHA is 6.56% against a 90-day high of 6.57%. VA is 6.59% and that IS the high. Jumbo is 7.02% and that is the high. The Mortgage News Daily 5/1 ARM is 6.67%, also the high. Only the 15-year is off its ceiling, at 6.24% against a 6.31% high and a 5.82% low. Freddie Mac's weekly survey, which prints below the daily series by construction, came in at 6.76% on September 10, up 5 basis points on the week and 9 on the month, with a 12-week track that runs 6.49% to 6.76% and never turns around.
The ARM sitting at its ceiling matters more than the headline number, because it removes the escape hatch you normally reach for when the fixed rate gets uncomfortable — there is no payment relief in a 6.67% ARM against a 6.90% fixed. Where there IS a real gap is government: FHA and VA note rates sit 34 and 31 basis points under conventional, which on a $400,000 loan is roughly $90 and $81 a month in principal and interest before mortgage insurance enters the FHA comparison. Run the eligible files both ways before Wednesday. Jumbo borrowers are the segment losing twice: price at the ceiling, and the MBA credit availability index fell on a drop in jumbo availability alone while conforming and government offerings were unchanged, so the menu is thinning at the same time the price is peaking. Do this today: pull your veteran-eligible and FHA-eligible borrowers currently priced conventional, re-run them on the government sheet, and get any file whose payment improves locked before the projections land Wednesday afternoon.