Where to start?
 
The good news - plenty of people looking for homes to buy and sell. Couldn't be a better time for some!
 
BUT –  Bonds plummet to lows not seen since July of last year. When this happens, prices are primed to get worse in a hurry.
 
Here's what happened - This morning New Zealand's Central Bank (same as our Fed) unexpectedly hiked rates in an effort to cool their strong economic growth and fight inflation. There is talk that Australia may follow in rate hikes.
 
Why does this matter to our Mortgage Bond market? As Nations around the world hike their own rates higher, international investors who are seeking the highest rates of return on their money may increasingly look to invest elsewhere besides the US, and may even pull money from their present US-based holdings.
 
Thoughts of a rate cut are a distant memory. A rate hike is a distinct possibility as soon as Q3. After the dust from today settles, a positively sloped yield curve means 5 yr ARMs should look better than 30 year fixed rates.