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The Knudson File: 10 Year Treasuries DOWN 21 bps – Yield Curve Relatively FLAT 5+ with INVERSION

Inflation data for the month of April had some encouraging results. As such the 10 Year US Treasury rates decreased 21bps for the week ending May, 12th 2022. Lending Rates and …

The Knudson File: Mortgage Rates Increased 3 BPS to 5.53%

A 3-bps increase is a $2 a month payment increase for a $100,000 loan. That is a $0.06 (six cents) a day increase.  Rates are virtually unchanged.

The Knudson File: 10 Year Treasury Rates UP – Yield Curve FLAT For Years 5+

On May 4th the Feds increased the Fed Funds rate by 50 bps AND curtailed their Taper Program holdings of mortgage secured investments.  This will put upward pressure on longer-term rates …

The Knudson File: Mortgage Rates at 5.50%

The Knudson File: Mortgage Rates at 5.50%

Mortgage rates have increased 20 bps while 10 Year US Treasuries have also increased by 20 bps, thus the spread remained at 245 bps. As predicted, at the May 4th …

The Knudson File: Existing Home Market for MARCH 2022

Existing homes Sales continue to pull back due to record low available homes for sale and due to increasing interest rates. 

Rising mortgage rates will slow future home sales but in the immediate short run, there is a rush to buy as near-term home buyers rush into the market to purchase BEFORE mortgage rates rise further. 

The Knudson File: NEW Home Sales and Prices for March 2022

When coronavirus first impacted the United States in March 2020, sales of NEW homes immediately stalled but quickly recovered as the Federal Reserve dropped the federal funds rate to between …

The Knudson File: 10 Year Treasury Rates DOWN – Yield Curve FLAT For 5+ Years with INVERSION

The Yield Curve has had slight changes this past week (the red line is current, and the green is last week). The Yield Curve is virtually flat for 5+ years and the inversion is BACK.

The Knudson File: Mortgage Rates decreased 1 BPS to 5.30%

MORTGAGE RATES ARE NOW WELL ABOVE 5.00% and decreased 1 bps to 5.30%. For a $100,000 loan, the monthly payment decreased by $1 to $555 which is equal to $0.02 a day.

The Knudson File: Can The Fed Move Fed Funds WITHOUT Causing An Increase in Mortgage Rates?

The Knudson File:  Can The Fed Move Fed Funds WITHOUT Causing An Increase in Mortgage Rates?

With the STEEP short-term portion of the Yield Curve, the Fed can increase Fed Funds by nearly 200 bps and yet have no changes in longer-term Treasuries (ie 5+ years).  The result can still have a “normal” shaped Yield Curve. In fact, a Yield Curve shape is very similar to the pre-COVID-19 Yield Curve.

The Knudson File: 1 & 5 Year Treasuries up 17 BPS

The Knudson File: 1 & 5 Year Treasuries up 17 BPS

10 Year US Treasury rates increased 7 bps for the week ending April 14th, 2022. 1 & 5 Year Treasuries were up a by a LARGE margin (17 bps).  This …

The Knudson File: Do Interest Rates Really Matter? 

The Knudson File: Do Interest Rates Really Matter? 

One month ago, mortgage rates were ~4.00% and income needed to qualify for a $100,000 loan was $20,500.  Now, with rates at 5.31% $23,800 is needed.  This is an increase …

The Knudson File: 10 Year US Treasury Rates Increased 17 BPS

10 Year US Treasury rates increased 17 basis points for the week ending April 14th, 2022 (48 bps for the past 2 weeks). 30-year Treasury was up a 23 bps, which …

The Knudson File: Mortgage Rates up an Additional 28 bps to 5.20%

MORTGAGE RATES ARE NOW OVER 5.00% and increased 28 basis points to 5.20%. 28 bps was nearly a 3-sigma event that being 30 bps (in 51 years a 1% event). …

The Knudson File: CPI Spike in Energy Costs Related in Large Part to Russia/Ukraine

The Consumer Price Index (CPI) for March 2022 data was released on April 12th, 2022 and year-over-year levels came in at high’s last seen in 1981. The main driver of …

The Knudson File: 10 Year US Treasury Rates Increased 31 BSP

For the 7-day period ending April 7th, 2022, 10-Year Treasury rates increased 31 bps while mortgage rates were up 5 bps. This caused the net spread to Decrease from 25 bps to 58 bps ABOVE the normal spread of 168 bps. Bond investors are trying to get ahead of the Fed’s future moves. Rates ROCKET up and feather down.

The Knudson File: CPI Inflation Data for March 2022 Out Tomorrow – How Will Markets React?

Energy costs and Used car price spike are causing choppiness in the month to month data. Below is energy costs. The GREAT news is the spike outlier of 5.0 for March 2021 will drop off.

The Knudson File: Existing homes, Sales, and Price Appreciation

Since Sept 2021 the number of EXISTING home sales has gone flat as mortgage rates hovered in the 3.25%-3.75% rate and materially dropped off in February 2022 as rates went above 4.0%. Overall sales remain substantially above the level that prevailed prior to COVID-19. When COVID-19 first hit in March, sales plummeted but soon spiked to record levels in the following months. It is worth noting, Existing home prices reached record levels in June 2021.

The Knudson File: NEW HOME SALES and PRICES

When COVID-19 first hit the US in March 2020 sales of NEW homes immediately stalled but quickly resumed as interest rates declined.  With record-low mortgage rates, sales of NEW homes surged in late 2020 and into 2021.  As mortgage rates increased sales slowed but appear to be at levels slightly below levels that prevailed prior to March 2020.  The increased sales with multi-generational lows may have brought demand forward, thus giving the impression that NEW home sales have stalled.

The Knudson File: Mortgage Rates up an Additional 5 bps to 4.92%

After a VERY UNUSUAL bout of 3 weeks of consecutive rate increases of 25+bps, mortgage rates increased 5 bps this past week ending 4.7.22 and now stand at 4.92%.  (a review of …

The Knudson File: How Does the Rapid Rise in Mortgage Rates Compare to Rates Since 1971?

Freddie Mac has weekly 30 Year mortgage rates going back to 1971. The highest rate was 19.18% and it occurred on October 9,1981 while the lowest rate of 2.83% occurred …

The Knudson File: The Battle of The Bulge Begins-US Treasury Rates; Period Ending 3.31.22

10-year US Treasury rates declined 2 bps this past week while Mortgage rates increased 25 bps.  Thus, the spread increased by 27 bps to 87 bps ABOVE the long-term spread …

The Knudson File: Feds Raise Mortgage Rates Again

For the week ending March 31, 2022, mortgage rates increased 25 bps to 4.87%. In the prior 3 weeks rates have increased by 80 bps. The market is reacting to …

The Knudson File: What drives Consumer Confidence?

Some 70% of the US economy is driven by Consumer Spending. Consumer spending depends on many, many factors with some being more important at different times than other factors. There …

The Knudson File: Fed Raises Rates to Fight Inflation

As the Feds raise rates to fight inflation, will it cause the price of Gas or Used Car Prices to decrease?  Both are supply-related issues.  What is noticed is the …

The Knudson File: “Battle of the Bulge”

10 year US Treasuries were up 14 bps this past week vs 26 bps for Mortgages.  Thus the spread increased by 12 bps to 60 bps ABOVE the long term …

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