You’re Not Gonna Like What Happens to Mortgage Rates
Summary
Dave Meyer analyzes the recent surge in long-term bond yields, attributing it to fiscal anxiety, sticky inflation, and AI-driven debt supply rather than Fed policy. He details how Treasury Secretary Scott Bessett’s bond buyback attempts failed to lower rates, resulting in the 30-year mortgage rate hitting 7.07%. Meyer forecasts mortgage rates will remain in the 6.5–7.5% range through 2027, predicting flat to slightly negative home price growth. He advises real estate investors to leverage current market conditions to negotiate better deals on high-quality assets while avoiding overextension.
Topics discussed
Intro: Treasury Secretary's 'I am the house' remark and market reaction
Host intro: Why the bond market, not the Fed, drives mortgage rates
Explaining rising 10-year and 30-year Treasury yields
Factor 1: Fiscal anxiety and $40T national debt supply issues
Factor 2: Sticky inflation driven by Iran war and tariffs
Factor 3: Fed uncertainty under new chair Kevin Warsh
Transition to Treasury Department intervention
Sponsor Breaks: Steadily, Rent to Retirement, Avon
Treasury bond buybacks fail to lower yields; market rejects intervention
Sponsor Breaks: Airbnb Co-Host, Fundrise, LinkedIn, SVB
Mortgage rate forecast: Staying high at 6.5-7.5% in 2027
Housing market outlook: Flat prices, slow sales, and affordability crisis
Investor strategy: Buying under comps in the 'Great Stall'
Conclusion and final sponsor ad for SVB/1st Citizens
Disney+ Toy Story 5 advertisement
Listen ad-free on Castria