Morning! This is MF Lending - the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Here’s what we’ve got for you today:

1. Punches to bond market keep coming 🥊

2. The resilient asset class in Nashville 🏡

By the way, this article on “why rates rose last week…” was our top article this month, check it out if you are interested.

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Nuwave Rates Today 📈

Punches to Bond Market Keep Coming 🥊

To say the bond market has gotten hammered over the last week is quite an understatement. The 30-yr MBS market has dropped nearly 160bps since Thursday and bonds are getting hit another 20 bps this morning…

I am sure your buyers are feeling it.

If you look at our previous editions, you can see some of the sources of this downward pressure (Thur 8.10, Mon 8.14).

Yesterday the news was the Fed minutes from the July meeting that was affecting mortgage rates. If you don’t want to read the legal document, here are the highlights from MBS Live:

• Uncertainty remains. Future changes = data dependent

  • We knew this one since Powell refuses to say anything else

• Most said more hikes COULD be needed due to inflation

• "a number" warned of overtightening

• a couple favored holding steady

• most saw more inflation risks

• more evidence of lower inflation needed

• gradual slowdown in economy seems to be happening

• slower growth and softer jobs market still necessary to restoring balance

• higher home prices taken as sign that housing response to rates has peaked

The last one is the most interesting…

Now that you went back and read it - here’s why:

The Fed seems to think that homeowners have officially digested and accepted the reality of the higher interest rate market. They seem to believe that home prices are rising due to demand increasing in the market by potential homeowners.

But home prices are also being driven higher by the lack of supply…not an increase in demand.

-

Overall, this report did not tell us many things that we did not already know. But, the bond market still responded negatively. This may have to do with the pessimism in the overall market and traders are simply following the trend we have been seeing since the end of July.

Hopefully, we get some overwhelmingly positive news in the Sep CPI and Jobs reports…but time will tell.

The resilient asset class in Nashville 🏡

One sector that continues to perform well in Nashville - condos. According to a report from Axios Nashville

In Nashville, condo prices are rising faster than single-family homes, per latest Zillow data - up 5.5% compared to last year.

Overall sales in Nashville area last month were down 13% year-over-year, but condo closings were about even with last year (and higher than 2019).

Why? Condos remain a relatively affordable price point compared to single-family homes.

The Cul-de-Sac

Thanks for reading - that is all we have for today 😎

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— Michael F DiLucchio