Today's Scoop:

Hey friends, here's what you need to know today...

1. Mortgage rates jumped again and stalled homebuyers.

2. China's economy is snapping back from lockdowns.

3. US manufacturing slowed again in February.

S&P 500: 3,951.391Mo: -5% | 1Yr: -10% | 5Yr: +47%

The market inched lower today as investors worried about inflation creeping back. 

Mortgage rates have spiked and stalled the housing market. The Mortgage Bankers Association said applications for new home mortgages sank to a 28-year low last week. Mortgage rates have jumped half a percentage point higher in the past month to 6.7% for the average 30-year fixed-rate mortgage. [🤓]

US manufacturing activity slowed again in February as business owners battled higher costs. The Institute for Supply Management reported the fourth straight month of contraction.

China's economy is snapping back now that their lockdowns are over. China's National Bureau of Statistics reported their factory activity index hit its highest level since 2012.

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Mortgage rates

Mortgage rates can be fixed or floating. A fixed-rate means you've locked in that percentage of the loan you need to pay back in interest each month, and it won't increase. A floating rate is usually tied to the movement of a benchmark interest rate. So as broader interest rates rise, your rate increases, and you pay more each month.

Whether fixed or floating, banks determine their mortgage rates by taking a baseline low-risk lending rate like US Treasury bonds, then marking it up based on how risky you are as a borrower. So banks say, "OK, we can lend to the US Government (considered no default risk) for ten years at 4% interest. You're more likely to default than the US Government, so you will need to pay us higher interest to make it worth the risk, maybe 7%." As baseline rates rise, your rates will rise.

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