Mortgage Market Update February 23, 2024

Happy Friday - welcome to this week's Market Mortgage Update for February 23, 2024

- Mortgage interest rates have started to rebound slightly, influenced by the performance of mortgage bonds, with rates expected to show more accurately early next week. Conventional loans average around 7.10%, with FHA and VA loans slightly lower.

- The job market shows contrasting views: the government reports a strong job market, while the CEO of ZipRecruiter highlights a decline in recruiting, noting that 80% of jobs created in 2023 were in government, healthcare, and hospitality/leisure, with the latter expected to decline due to inflation.

- The "Buy Now, Pay Later" trend is surging, with a significant portion of transactions under $250, and 21% of these purchases are for groceries, indicating a financial strain on consumers for basic needs.

- New construction and home builder sentiment remain positive, with a 5% increase in new construction expected this year despite seasonal fluctuations. Home sales are up month-over-month but have slowed year-over-year, indicating a still robust seller's market with only a three-month supply.

- A new course on financial literacy, covering topics from the psychology of money to pathways to homeownership, is being launched, aiming to empower individuals with knowledge to navigate the financial aspects of home buying and ownership.

Friday ended up being surprisingly strong for the bond market with the best rally of the week in the long end of the yield curve. European bonds were a key consideration early, but the quarterly rollover in Treasury futures probably added some emphasis to the gains. 10yr Treasuries fully erased the sharper losses seen Wednesday and Thursday. Unfortunately, those sharper losses happened to be threatening the technical ceiling at 4.32%, so Friday's rally is best described as merely keeping the broader sideways vibes intact.