Sure, we have a Fed meeting, but the Fed doesn’t set mortgage rates. Will they all head off on vacation after this week? Perhaps. Given the increase in the “out of office” replies I am seeing, and children in airports, summer vacation is in full swing. (Apparently families will change their spending habits to accommodate the run up in fuel costs; my local gas station won’t let me go above $100 per visit on my credit card.) In an extreme example to time management, the U.S. Congress has only 16 legislative days left on its agenda until the election; the rest of the time is vacation and campaigning to keep their jobs. In other words, don’t look for much from Congress until January. Certainly, no politician wants to cut spending despite the deficit continuing to escalate. What would you tell your kids if their incomes weren’t doing much but they were ramping up their spending? (Today’s podcast can be found here and this week’s ‘casts are sponsored by Truework, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. Interview with TrustEngine’s Dave Savage on why the mortgage professionals who will thrive are those who obsess over delivering a modern, technology-enabled consumer experience, embrace AI to scale advice and efficiency, and focus on educating and advocating.) Broker and Lender Products, Software, and Services

European markets definitely got in on the peace deal action yesterday, but they didn’t trade it nearly as aggressively as US markets.  Why bring this up? There was a fairly obvious shift toward lower oil prices and bond yields overnight, and the most obvious suspect was simply the opening bell for European markets. While obvious, it wasn’t too big. 10yr yields are hovering in a range that’s 2-3bps lower than yesterday, and still above the lows seen at the beginning of the month. 

Third-party originators support tightening some standards but say greater flexibility and coordination could help the market avoid disruption.

Bill Greenberg and Mat Ishbia held a video chat on June 11. The companies disputed the outcome, but in the end, UWM did not make a new proposal for Two Harbors.

HUD said its Office of Fair Housing and Equal Opportunity has reduced a Biden administration case backlog by 27% and accelerated investigations.

But moderating price growth and friendly building policies in many markets hint at emerging affordability for aspiring buyers, Zillow said.

On a year-over-year comparison, title underwriters produced 15% more premiums in the first quarter, as mortgage rates briefly fell under 6% in February.

The bad news: mortgage rates didn’t fall quite as much as one might have expected following the confirmation of the Iran peace deal. The good news: rates had already begun pricing in the peace deal last Thursday and it only took a modest improvement for the average lender to match the lowest level in exactly one month.  For context, today’s MND rate index of 6.56% is the same as the most recent low seen on May 29th. Before that, you’d have to go back to 5/15 to see anything lower. For even more context, prior to 5/15, today’s rates would have been the 3rd highest since August 1st, 2025.  In other words, we are in solid shape in the context of the last month, but still in an elevated range.  [thirtyyearmortgagerates]

Gradual Selling Leaves Bonds Only Slightly Stronger.

With both sides signing the peace memo, the market was immediately willing to react in the overnight session, but that reaction fell short of what we might expect for an official peace deal. This is a bond market problem more than an Iran war problem. Case in point, oil prices stayed flat after their big overnight drop.  Stocks added to strong overnight gains. Bonds were the odd man out. Part of the reason is that bonds did more than stocks to get in position for this eventuality last week. As of today, both the S&P and 10yr are close enough to the best recent levels to say the overall market reaction has been fairly even keeled. We’d also expect more bullishness among bond traders when the deal is officially official (possibly after Friday’s scheduled meeting in Switzerland). Finally, bonds could be holding back a bit to see how Wednesday’s Fed announcement goes. 

Econ Data / Events

NY Fed Manufacturing (Jun)

5.70 vs 14 f’cast, 19.60 prev

Industrial Production (May)

0.1% vs 0.3% f’cast, 0.7% prev

Market Movement Recap

08:49 AM Nice rally overnight on confirmation of U.S./Iran peace deal with scheduled signing. MBS up nearly a quarter point and 10yr down 3.3 bps at 4.452

12:35 PM MBS still up 7 ticks (.22) and 10yr down 2.4bps at 4.461

03:21 PM MBS up 5 ticks (.16) and 10yr down 2.2bps at 4.463

Although at least one article (from BBC) suggested a peace deal had been signed on Friday, the real word appears to be that a signing is scheduled for Friday. That fact, along with comments on a “done deal” from both sides, helped bonds rally sharply in overnight trading. 10yr yields dropped roughly 6bps and have corrected gradually since then. Yields remain nearly 4bps lower and MBS are starting out nearly a quarter point higher.