You better ARM yourself?

[Andrew Postell]

Interest rates have risen for five straight days as investors pull back from long-term U.S. Treasuries as strong economic data and sticky inflation have led investors to scale back expectations for Fed rate cuts this year. The labor market remains resilient—JOLTS came in at 7.7M vs. 7.3M expected, nonfarm payrolls hit 147k vs. 106k, and unemployment dropped to 4.1% vs. 4.3%. Initial jobless claims are down, and ISM Services and New Orders both beat forecasts.

Inflation is still running hot as well, with Core PCE at 2.7% vs. the Fed’s 2.0% target. As a result, markets now expect no cut in July and only a possible move in September. Long-end yields are rising globally, with the 30-year U.S. Treasury nearing 5%, driven by heavy supply, reduced demand, and broader fiscal and geopolitical uncertainty.

While the long end of the curve continues to get beat up, the steepening yield curve continues to provide options for affordable financing. Last month, Rate originated ~$700M of adjustable-rate mortgages and we're releasing more ARM options to try to help with lower payments. Marry the house...date the rate.

https://apnews.com/article/real-estate-investors-home-sales-affordability-housing-7aa2bc78c87bfb1f292fe4321fe658cb?utm_source=copy&utm_medium=share