💸 Cooler bonds, stubborn rates

Issue 156 - Hello and Happy Wednesday, (we’ll be back to our normal scheduled Tuesday drop next week!)

Short today. Business travel last week + holiday weekend = late, short newsletter, haha.

Last week the bond market leaned in the right direction. Normally, that's where the confetti comes out. We'll hold off.

Here's the honest version: yields eased, but mortgage rates haven't fully followed. The setup is improving faster than the pricing, and that gap is worth understanding before you tell a client rates are "dropping."

What could close it shows up Thursday. PCE, the Fed's preferred inflation reading, is the number the bond market actually listens to. A cool print could let rates finally catch up to where the charts already are. A hot one keeps them stubborn. You'll know which way it broke by the weekend.

Personal Note:
Kids are wrapping up the school year over the next week and a half! More personal stuff to follow in the coming weeks!

TLDR (Too Long Didn’t Read) Summary

• ⬆️ RATES - Still popping up.

• 💵 INDUSTRY - $50k for a FTHB in Sonoma County?

• 📊 TECHNICALS - 10 Year Trending

INTEREST RATES
Rates 📢 May 27th, 2026

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

INDUSTRY
How Much Cash Do You Need?

TECHNICALS
Trend Leaning Lower, Waiting for Rates to Buy In.

Mortgage rates don't take their orders from the Fed. They follow the bond market. And this past week, the bond market started sending a quietly encouraging signal. The catch is that mortgage rates have not fully come along for the ride yet.

Here's what the charts are telling us:

📉 The 10-year Treasury yield broke below a key floor it had been stuck above for a while. That matters because when yields fall, mortgage rates tend to follow them down. There's now open room beneath it, meaning yields have space to keep drifting lower if the data cooperates.

📈 Mortgage bonds, the investments that most directly drive home loan pricing, climbed to the top of their recent range. Pushing through that ceiling would open the door to better pricing. They aren't through it yet, but they're knocking.

⏳ Here's the disconnect: the bond market is moving in borrowers' favor, but the rates borrowers actually see are lagging behind. Lenders tend to wait and see the improvement hold before they pass it through to rate sheets. So the setup is improving faster than the pricing is.

🔁 Keep the celebration measured. Markets tend to overreact in both directions, so a few good sessions is a lean, not a trend. This is a setup worth watching, not a green light.

Watch this: PCE, the inflation reading the bond market respects most, lands Thursday, and it's exactly the confirmation rates are waiting for. The mechanism is simple. Cooler than expected inflation gives bond investors a reason to buy, buying pushes yields down, and lower yields pull mortgage rates down with them. A cool number could finally give lenders the confidence to let rates catch up to where the bond market already is. A hot one keeps rates stubborn and stalls the whole thing. Thursday tells us whether the rate sheet starts believing what the charts are already showing.