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20th February, 26
Tariff Ruling Tried (And Failed) to Steal The Show
Tariff Ruling Tried (And Failed) to Steal The Show If you were told ahead of time that Friday morning would bring news that the Supreme Court struck down the IEEPA tariffs, you wouldn't be crazy to think it would be the week's biggest news and a big potential source of volatility for bonds. But reality wasn't quite as dramatic. It's true that the tariff ruling garnered the week's highest volume as well as some elevated directional volatility, but in outright terms, it was less than 3bps in 10yr yields and about half of that was recovered as the day progressed. Reasons and implications are
Tariff Ruling Tried (And Failed) to Steal The Show
Tariff Ruling Tried (And Failed) to Steal The Show If you were told ahead of time that Friday morning would bring news that the Supreme Court struck down the IEEPA tariffs, you wouldn't be crazy to think it would be the week's biggest news and a big potential source of volatility for bonds. But reality wasn't quite as dramatic. It's true that the tariff ruling garnered the week's highest volume as well as some elevated directional volatility, but in outright terms, it was less than 3bps in 10yr yields and about half of that was recovered as the day progressed. Reasons and implications are
20th February, 26
Mortgage Rates End Week at Lows
Bonds dictate mortgage rates and bonds experienced a bit of volatility this morning in response to the Supreme Court ruling on tariffs. The initial impact was negative for rates with Treasury yields moving higher and the prices for mortgage-backed securities moving lower. But the reaction was well-contained and bonds ended up erasing most of it by the afternoon. In addition, bonds had improved steadily yesterday, but not so quickly that mortgage lenders updated yesterday's rate offerings. As such, the average lender had a small cushion to work with today, and it was more than enough to offset
Mortgage Rates End Week at Lows
Bonds dictate mortgage rates and bonds experienced a bit of volatility this morning in response to the Supreme Court ruling on tariffs. The initial impact was negative for rates with Treasury yields moving higher and the prices for mortgage-backed securities moving lower. But the reaction was well-contained and bonds ended up erasing most of it by the afternoon. In addition, bonds had improved steadily yesterday, but not so quickly that mortgage lenders updated yesterday's rate offerings. As such, the average lender had a small cushion to work with today, and it was more than enough to offset
20th February, 26
New Home Sales Remain Near Recent Highs
If there's one housing market metric that paints a brighter picture than the rest, it's New Home Sales data from the Census Bureau. At 745,000, it eased slightly from an upwardly-revised annual rate of 758,000 , but was higher then the pre-revision reading of 737k, and 3.8% above December 2024’s 718,000. Fairly chunky revisions are par for the course with this data. The chart below shows pre-revision numbers (thus the slight uptick with the current release). For-sale inventory fell to 472,000 , down 2.7% from November and 3.5% lower than a year ago. At the current sales pace, that represents
New Home Sales Remain Near Recent Highs
If there's one housing market metric that paints a brighter picture than the rest, it's New Home Sales data from the Census Bureau. At 745,000, it eased slightly from an upwardly-revised annual rate of 758,000 , but was higher then the pre-revision reading of 737k, and 3.8% above December 2024’s 718,000. Fairly chunky revisions are par for the course with this data. The chart below shows pre-revision numbers (thus the slight uptick with the current release). For-sale inventory fell to 472,000 , down 2.7% from November and 3.5% lower than a year ago. At the current sales pace, that represents
20th February, 26
Pending Sales Dip as Affordability Gains Fail to Spark Demand
The National Association of Realtors’ Pending Home Sales Index (PHSI) slipped modestly in January, easily prolonging its stay in a narrow range near all-time lows. Pending home sales decreased 0.8% month over month and were down 0.4% compared with the same time last year. While affordability conditions have improved somewhat as mortgage rates trend closer to 6%, the improvement has failed to bolster contract activity. NAR Chief Economist Lawrence Yun noted that lower rates have expanded the pool of mortgage-eligible households, potentially adding hundreds of thousands of new buyers this year
Pending Sales Dip as Affordability Gains Fail to Spark Demand
The National Association of Realtors’ Pending Home Sales Index (PHSI) slipped modestly in January, easily prolonging its stay in a narrow range near all-time lows. Pending home sales decreased 0.8% month over month and were down 0.4% compared with the same time last year. While affordability conditions have improved somewhat as mortgage rates trend closer to 6%, the improvement has failed to bolster contract activity. NAR Chief Economist Lawrence Yun noted that lower rates have expanded the pool of mortgage-eligible households, potentially adding hundreds of thousands of new buyers this year
20th February, 26
Fraud, Retention, Marketing Tools; Assessing Income; STRATMOR on Org. Structure; Non-Agency Updates
Mail-related check fraud never seems to go away, and the FBI reminds us that blue gel pens certainly help in reducing check fraud. “Rob, are you hearing that the increase in the popularity of artificial intelligence has led to an increase in mortgage fraud?” Yes, I have. It can be insidious… it may not show up until months or years have passed. Investors are becoming more and more wary. AI proponents say, however, that AI can be very good at detecting fraud. So, you decide. Few mortgage court cases ever make it to a jury to decide anything, but the industry is watching a class action
Fraud, Retention, Marketing Tools; Assessing Income; STRATMOR on Org. Structure; Non-Agency Updates
Mail-related check fraud never seems to go away, and the FBI reminds us that blue gel pens certainly help in reducing check fraud. “Rob, are you hearing that the increase in the popularity of artificial intelligence has led to an increase in mortgage fraud?” Yes, I have. It can be insidious… it may not show up until months or years have passed. Investors are becoming more and more wary. AI proponents say, however, that AI can be very good at detecting fraud. So, you decide. Few mortgage court cases ever make it to a jury to decide anything, but the industry is watching a class action
20th February, 26
Opening Salvo of Data Fails to Inspire
At the time of this writing, there are still a few econ reports left on deck, but the big ones are out. GDP missed big (1.4 vs 3.0), but largely for non-economic reasons. For instance, the BEA noted an entire 1% of the decline from the 4.4% reading in Q3 was due to the way it counts federal worker labor during the shutdown. Most of the rest is due to late-breaking changes in the trade gap reported yesterday. The more economically indicative metrics (like real sales to domestic purchasers) suggest an uneventful sideways drift. Meanwhile, monthly PCE inflation came in a bit hotter than expected
Opening Salvo of Data Fails to Inspire
At the time of this writing, there are still a few econ reports left on deck, but the big ones are out. GDP missed big (1.4 vs 3.0), but largely for non-economic reasons. For instance, the BEA noted an entire 1% of the decline from the 4.4% reading in Q3 was due to the way it counts federal worker labor during the shutdown. Most of the rest is due to late-breaking changes in the trade gap reported yesterday. The more economically indicative metrics (like real sales to domestic purchasers) suggest an uneventful sideways drift. Meanwhile, monthly PCE inflation came in a bit hotter than expected
19th February, 26
Bonds Punt. Focus Turns to Friday's Econ Data
Bonds Punt. Focus Turns to Friday's Econ Data Bonds spent the past 2 days pushing back toward slightly higher yields after the 10yr nearly hit 4.0% in Tuesday's overnight session. While there was probably some technical resistance at work, Thursday suggests it wasn't a lasting, thematic shift. In other words, rather than remain committed to an ongoing push back toward higher levels, yields were flat to slightly lower. Perhaps this is as simple as 10yr yields hitting the 4.10 mark this morning and traders playing a narrow 4.0-4.10 range until econ data makes a breakout suggestion. On that
Bonds Punt. Focus Turns to Friday's Econ Data
Bonds Punt. Focus Turns to Friday's Econ Data Bonds spent the past 2 days pushing back toward slightly higher yields after the 10yr nearly hit 4.0% in Tuesday's overnight session. While there was probably some technical resistance at work, Thursday suggests it wasn't a lasting, thematic shift. In other words, rather than remain committed to an ongoing push back toward higher levels, yields were flat to slightly lower. Perhaps this is as simple as 10yr yields hitting the 4.10 mark this morning and traders playing a narrow 4.0-4.10 range until econ data makes a breakout suggestion. On that
19th February, 26
Mortgage Rates Hold Flat on Thursday Despite Lower Weekly Average
For the average lender, top-tier 30yr fixed mortgage rates were perfectly unchanged compared to yesterday. This keeps them right in line with the lowest levels in more than 3 years. That said, if we're splitting hairs, better rates were available 4 days in the past month and a half (Jan 9, Jan 12, Feb 13, Feb 17). So why is it that there are news headlines today claiming that rates hit their lowest levels in more than 3 years? Simply put, those stories are based on weekly survey data from Freddie Mac. Freddie isn't technically wrong, but you have to understand their methodology. Freddie's
Mortgage Rates Hold Flat on Thursday Despite Lower Weekly Average
For the average lender, top-tier 30yr fixed mortgage rates were perfectly unchanged compared to yesterday. This keeps them right in line with the lowest levels in more than 3 years. That said, if we're splitting hairs, better rates were available 4 days in the past month and a half (Jan 9, Jan 12, Feb 13, Feb 17). So why is it that there are news headlines today claiming that rates hit their lowest levels in more than 3 years? Simply put, those stories are based on weekly survey data from Freddie Mac. Freddie isn't technically wrong, but you have to understand their methodology. Freddie's
19th February, 26
Prudent AI's Income, Correspondent, LOS Tools; The Fed's Bank Mortgage Proposal; STRATMOR on LOs; Elliot Eisenberg Interview
It’s hard to believe that the COVID pandemic was six years ago with its increase in deaths. For our biz, we switched to “work from home,” among other changes. Along those lines, I received this note: “Rob, are you hearing about a concern among lenders about the liquidity of the non-QM sector? As in a repeat of March 2020 when many non-QM lenders suspended their programs due to volatile market conditions caused by the COVID-19 pandemic, hurting the ability to submit, underwrite, lock, or fund non-QM loans?” Personally, I don’t foresee that, but liquidity should always be discussion
Prudent AI's Income, Correspondent, LOS Tools; The Fed's Bank Mortgage Proposal; STRATMOR on LOs; Elliot Eisenberg Interview
It’s hard to believe that the COVID pandemic was six years ago with its increase in deaths. For our biz, we switched to “work from home,” among other changes. Along those lines, I received this note: “Rob, are you hearing about a concern among lenders about the liquidity of the non-QM sector? As in a repeat of March 2020 when many non-QM lenders suspended their programs due to volatile market conditions caused by the COVID-19 pandemic, hurting the ability to submit, underwrite, lock, or fund non-QM loans?” Personally, I don’t foresee that, but liquidity should always be discussion
19th February, 26
Accidental Clairvoyance (Not Really...)
Yesterday's end-of-day recap bore the title "Half-Hearted Correction Continues." It turns out that should have been the title for this morning's commentary as it's a better description of this morning's trading (yesterday, we actually had a few fundamentals to justify the weakness). In today's case, bonds are weaker "just because." Jobless Claims data (206k vs 225k f'cast) didn't help though--especially considering a higher claims reading helped kick off the big rally 2 weeks ago. Bonds seem more interested in trading technicals at the moment based on the very linear selling so far this week.&
Accidental Clairvoyance (Not Really...)
Yesterday's end-of-day recap bore the title "Half-Hearted Correction Continues." It turns out that should have been the title for this morning's commentary as it's a better description of this morning's trading (yesterday, we actually had a few fundamentals to justify the weakness). In today's case, bonds are weaker "just because." Jobless Claims data (206k vs 225k f'cast) didn't help though--especially considering a higher claims reading helped kick off the big rally 2 weeks ago. Bonds seem more interested in trading technicals at the moment based on the very linear selling so far this week.&