Do you remember when everyone was talking about the lack of housing inventory as a problem for buyers? Those days are long gone: There are now nearly 50 percent more home sellers than buyers as mismatch widens to a record 630,000. (Of course this is depending on price point and location.) And what they’re selling isn’t necessarily new: Per the American Community Survey, it seems that the median owner-occupied house is about 43 years old. As anyone from the building profession will tell you, at any given time the 5 L’s (labor, lots, laws, lumber, and lending) can create problems. Some will say there’s a 2.5 million unit mismatch. There isn’t necessarily a shortage, just the wrong housing stock in the wrong locations at the wrong price points. Regardless of supply and demand, tech marches on, and today at 1PM ET we have Now Next Later, Sponsored by Depth: Jeremy Potter and Mike Yu of Vesta revisit how AI is transforming mortgage communication across calls, texts, and emails. The conversation focuses on improving conversion, reducing missed opportunities, and driving more consistent performance across sales teams. (Today’s podcast can be found here and this week’s ‘casts are sponsored by RelCu. RelCu is the all-in-one agentic platform driving conversion, retention, and cross-sell across mortgage and deposits. Today’s features an interview with Lennar’s Laura Escobar on leadership, housing trends, people-first leadership, and the ongoing evolution of diversity and mentorship.)

The bad news is that the average top-tier 30yr fixed rate remains over 6.5% after being under 6% just a month ago. The good news is that rates recovered nicely over the weekend.  By Friday afternoon, the average rate was 6.64%–the highest since August 2025–adding to a trend of rapid upward movement over the course of March. While there’s no way to know if a bigger picture corner has been turned, it’s a victory in the short term. Notably, the underlying bond market broke from its typical correlation with oil prices today. The latter has experienced severe volatility due to the Iran war, and bonds have been affected due to inflation implications. It’s too soon to determine if that’s happening for temporary reasons relating to the calendar more than underlying events and economic fundamentals.

There are three distinct reasons that could account for bonds paradoxically rallying overnight despite oil prices remaining high and an absence of meaningful de-escalation in the Iran war.

The most notable development has been the correction in Fed Funds Futures that began on Friday morning and extended modestly into this morning.

Less objectively quantifiable but still likely enough for us to call it out last week was pre-weekend positioning. Specifically, it has made good sense for bonds to be defensive heading into a weekend and recover on Monday if there was no major escalation. Last but not least, it’s March 30th, so we’d always need to consider month-end positioning could be creating some of its own momentum for bonds. The net effect is a 3/8ths gain in MBS and a 7bp drop in 10yr yields (currently just under 4.37). Much like last week, this is a nice little recovery on a Monday, but by no means evidence of a broader reversal.

Fannie Mae and Freddie Mac’s portfolios were collectively $10 billion larger than in January, spurred in part by their mortgage-backed securities directive.

Lowering minimum standards and using a 2018 proposal as a basis for change may be the quickest path, according to Donald Layton, Freddie Mac’s CEO from 2012 to 2019.

The latest rise in property tax collections at the end of last year continued a nine-quarter streak of increases, according to the National Association of Home Builders.

Employers who use Nayya’s agentic AI platform can provide Foyer, a dedicated 401(k) for homeownership, as a benefit that helps its employees buy a home.

In three separate appearances Thursday, Fed Gov. Lisa Cook, Gov. Michael Barr and Vice Chair Philip Jefferson said they are worried that U.S. involvement in the war with Iran could drive up inflation, leading them to conclude that interest rates should remain steady in the near term.

The real estate investment trust declared an all-cash offer of $10.80 per share from CrossCountry superior to the fixed stock exchange ratio bid from UWM.

Some Resilience After AM Weakness

10yr yields are set to end the week at the highest levels since last July, but those were even higher highs earlier this morning. From roughly 9am-1130am ET, bonds recovered all of the day’s losses in a move that was led by adjustments to Fed rate hike expectations.  Yes, we can/should call it that now because there are no longer any rate cut expectations based on futures trading. Instead, there’s indecision about holding steady vs a small chance of rate hikes. War headlines remain the dominant focus and weekends continue to offer a higher concentration of risk for financial markets.

Econ Data / Events

Consumer Sentiment (Mar)

53.3 vs 54 f’cast, 56.6 prev

Sentiment: 1y Inflation (Mar)

3.8% vs 3.4% f’cast, 3.4% prev

Sentiment: 5y Inflation (Mar)

3.2% vs 3.2% f’cast, 3.3% prev

Market Movement Recap

10:13 AM Additional weakness overnight. MBS down 6 ticks (.19) and 10yr up 3.2bps at 4.452

11:39 AM Bonds turning green.  MBS up 2 ticks (.06) and 10yr down almost 1bp at 4.412

03:48 PM Drifting back into weaker territory, very gradually. MBS down 1 tick (.03) and 10yr up 2bps at 4.44