From last week’s policy announcement from the European Central Bank (ECB), focus shifted to the Federal Reserve’s (the Fed) policy announcement this week. Although rates appeared to react to the Fed, reality was far more complicated. Meanwhile, housing metrics continued to grind sideways.
Source: Kevin Litwicki Universal Lending
Fed Week Rate Volatility Had Nothing to do With The Fed

At the end of June, European Central Bank (ECB) president Mario Draghi made a series of comments that led Market participants to believe the ECB was moving closer to announcing an end to the ongoing expansion of its Bond buying program. In other words, it looked like a European taper tantrum was fast approaching.
Source: Kevin Litwicki Universal Lending
From Taper Tantrum to Death Cross: Either Way, Rates Are Pushing Back

After a clear defeat last week, the mortgage rate landscape grew more complicated this week. The traditional market movers (like the Fed and economic data) are still important, but their messages occasionally clash. Sometimes they’re simply overshadowed by other factors. What do rates really care about and how might the rest of the year unfold?
Source: Kevin Litwicki Universal Lending
Conflicting Messages Adding to Interest Rate Volatility

There was an unusual mix of developments affecting housing and mortgage markets this week. Housing finance reform was in the news, but not in the usual ways. Rates shot higher, but not for the usual reasons. And an industry report continues pointing toward a seller’s market–something that would usually imply increased housing inventory.
Source: Kevin Litwicki Universal Lending
Housing Reform, Interest Rate Drama, and a Seller's Market

After spending more than a month holding fairly steady near 8-month lows, rates are moving quickly higher this week. Not only are the underlying reasons somewhat opaque but there are multiple media outlets reporting the “lowest mortgage rates of the year.” What’s really going on here?
Source: Kevin Litwicki Universal Lending
Rates Are Actually Much Higher This Week. Here's Why

A combination of low supply, great rates, slowly improving credit availability, and high demand has home prices soaring relative to expectations. Is this too much of a good thing?
Source: Kevin Litwicki Universal Lending
New Home Prices Smash Record: Good or Bad?

The relationship between “Fed rate hikes” and mortgage rates can be confusing at first glance. After all, mortgage rates moved lower in the days and weeks following the past 3 Fed rate hikes. While they aren’t necessarily repeating the same pattern this time around, mortgage rates were nonetheless unfazed by this week’s Fed hike.
Source: Kevin Litwicki Universal Lending
Making Sense of Lower Mortgage Rates Despite Fed Rate Hike

Mortgage rates are driven primarily by the bond market. Bonds can be a safe haven for investors if there are high-risk events on the horizon, or if headlines create a spike in uncertainty. If events pass without too much drama, and if uncertainty ebbs, investors move money back out of bonds, thus pushing rates higher. That was this week in a nutshell.
Source: Kevin Litwicki Universal Lending
Absence of Drama Lifts Rates From 2017 Lows

Last week’s newsletter was all about the Fed Minutes, which showcased a fairly detailed strategy for reducing the size of the Fed’s balance sheet. It was generally more rate-friendly than investors expected. This week’s jobs report added fuel to the fire.
Source: Kevin Litwicki Universal Lending
Jobs Report Adds Fuel to Fed's Fire

Although markets entered the week on the lookout for more political headlines, it was the Fed that ended up taking center stage. The Minutes from the early May Fed meeting contained important details on the Fed’s plan to slowly decrease the amount of bonds on its balance sheet. This ended up being good news for both stocks and bonds. Here’s why…
Source: Kevin Litwicki Universal Lending
Markets Cheer Fed's Reinvestment Plans