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3rd November, 25
Highest Rates in Just Over 3 Weeks
Up until last week's Fed announcement, the average 30yr fixed mortgage rate was at the lowest levels in more than a year (in many cases, matching the same lows seen on September 16th--the day before the previous Fed announcement). Although these past 2 post-Fed episodes have resulted in somewhat volatile bounces, rates are still far closer to long-term lows than they are to the summertime highs. In terms of MND's 30yr fixed index, we're currently at 6.34% versus last week's low of 6.13%. Contrast that to rates just under 7% in June and 7.25% earlier this year
Highest Rates in Just Over 3 Weeks
Up until last week's Fed announcement, the average 30yr fixed mortgage rate was at the lowest levels in more than a year (in many cases, matching the same lows seen on September 16th--the day before the previous Fed announcement). Although these past 2 post-Fed episodes have resulted in somewhat volatile bounces, rates are still far closer to long-term lows than they are to the summertime highs. In terms of MND's 30yr fixed index, we're currently at 6.34% versus last week's low of 6.13%. Contrast that to rates just under 7% in June and 7.25% earlier this year
3rd November, 25
Non-QM, 2nds, Marketing Products; Deep Dive on "Data-Less" Capital Markets
“Daylight savings time: Is the government cutting off the bottom of a blanket and sewing it to the top and saying, ‘See? Its longer now.’” Here in Austin, TX, Texas Women Mortgage Bankers’ Fall Social and TMBA’s Housing Summit agenda are full of speakers (not from, but…) discussing the U.S. Government’s role in housing and finance, as well as our Fed. “Rob, what do hear about Lisa Cook? Is she still on the Federal Reserve’s Board?” Yes, she is still with the Fed, and the Supreme Court will hear her case, assuming we all want to follow the law, and due process. The latest
Non-QM, 2nds, Marketing Products; Deep Dive on "Data-Less" Capital Markets
“Daylight savings time: Is the government cutting off the bottom of a blanket and sewing it to the top and saying, ‘See? Its longer now.’” Here in Austin, TX, Texas Women Mortgage Bankers’ Fall Social and TMBA’s Housing Summit agenda are full of speakers (not from, but…) discussing the U.S. Government’s role in housing and finance, as well as our Fed. “Rob, what do hear about Lisa Cook? Is she still on the Federal Reserve’s Board?” Yes, she is still with the Fed, and the Supreme Court will hear her case, assuming we all want to follow the law, and due process. The latest
3rd November, 25
Weaker Start Despite Modest Boost From ISM Data
Bonds were moderately weaker in the overnight session with most of the selling arriving at 7:56am ET when Alphabet filed for a large corporate bond offering, estimated at $15bln. Corporate bond issuance puts upward pressure on rates in several ways and there's almost always an immediate pop when a new, large deal (like this morning's) is announced. As a result, 10yr yields were roughly 4bps higher at the open. We saw a small rally in response to tepid ISM manufacturing data, but it doesn't seem to be sticking
Weaker Start Despite Modest Boost From ISM Data
Bonds were moderately weaker in the overnight session with most of the selling arriving at 7:56am ET when Alphabet filed for a large corporate bond offering, estimated at $15bln. Corporate bond issuance puts upward pressure on rates in several ways and there's almost always an immediate pop when a new, large deal (like this morning's) is announced. As a result, 10yr yields were roughly 4bps higher at the open. We saw a small rally in response to tepid ISM manufacturing data, but it doesn't seem to be sticking
31st October, 25
Sideways Overall Despite Hawkish Fed Speakers
Sideways Overall Despite Hawkish Fed Speakers Although there was some mid-day volatility (early buying followed by slower selling back to roughly unchanged territory), that movement was more in line with month-end tradeflows than any interesting, specific motivations. Nonetheless, there were interesting, specific developments in the form of several comments from several Fed speakers. Rather than display a balanced mix of differing viewpoints, today's crop of comments was distinctly hawkish across the board. Logan said she would have preferred to hold rates steady this week and can't see
Sideways Overall Despite Hawkish Fed Speakers
Sideways Overall Despite Hawkish Fed Speakers Although there was some mid-day volatility (early buying followed by slower selling back to roughly unchanged territory), that movement was more in line with month-end tradeflows than any interesting, specific motivations. Nonetheless, there were interesting, specific developments in the form of several comments from several Fed speakers. Rather than display a balanced mix of differing viewpoints, today's crop of comments was distinctly hawkish across the board. Logan said she would have preferred to hold rates steady this week and can't see
31st October, 25
Mortgage Rates Recover Some of This Week's Lost Ground
After hitting the highest level in several weeks on Thursday, mortgage rates managed to move moderately lower on Friday. Counterpoint: Friday's rates are still the 2nd highest of the past 2 weeks and still meaningfully higher than last Friday's (6.28% vs 6.19% in terms of MND's rate index). The improvement makes it clear that lenders were setting rates defensively on Thursday. We know this because the level of improvement in rates is greater than that suggested by the underlying bond market. In other words, Thursday's rates had a bit of a cushion and lenders removed that cushion on Friday.
Mortgage Rates Recover Some of This Week's Lost Ground
After hitting the highest level in several weeks on Thursday, mortgage rates managed to move moderately lower on Friday. Counterpoint: Friday's rates are still the 2nd highest of the past 2 weeks and still meaningfully higher than last Friday's (6.28% vs 6.19% in terms of MND's rate index). The improvement makes it clear that lenders were setting rates defensively on Thursday. We know this because the level of improvement in rates is greater than that suggested by the underlying bond market. In other words, Thursday's rates had a bit of a cushion and lenders removed that cushion on Friday.
31st October, 25
Home Price Appreciation Keeps Cooling; New Loan Limits Coming Into Focus
Both the FHFA and the S&P CoreLogic Case-Shiller indices released new home-price data this week covering the month of August. The message is unchanged: prices remain higher than a year ago, but the pace of appreciation continues to slow. Case-Shiller’s national annual gain eased to 1.5%, the smallest in more than 2 years, while FHFA is near its lowest annual pace since 2012. Caveat: “lowest in x years” refers to growth rate, not price levels. Index levels remain near all-time highs with only modest recent slippage—nothing like 2008–09. The following chart represents the year over
Home Price Appreciation Keeps Cooling; New Loan Limits Coming Into Focus
Both the FHFA and the S&P CoreLogic Case-Shiller indices released new home-price data this week covering the month of August. The message is unchanged: prices remain higher than a year ago, but the pace of appreciation continues to slow. Case-Shiller’s national annual gain eased to 1.5%, the smallest in more than 2 years, while FHFA is near its lowest annual pace since 2012. Caveat: “lowest in x years” refers to growth rate, not price levels. Index levels remain near all-time highs with only modest recent slippage—nothing like 2008–09. The following chart represents the year over
31st October, 25
Mortgage Applications Responded to Lower Rates, But Things Are Already Changing
Mortgage applications jumped sharply last week, driven by lower rates and a rebound in refinance activity. According to MBA’s Weekly Applications Survey for the week ending October 24, total volume rose 7.1% on a seasonally adjusted basis and 7% unadjusted. The Refinance Index increased 9% from the previous week and is now 111% higher than the same week one year ago. Refi demand remains the primary engine of growth, with larger-balance borrowers especially responsive to rate drops. It bears repeating that things look different in context. Specifically, while refi demand looks great
Mortgage Applications Responded to Lower Rates, But Things Are Already Changing
Mortgage applications jumped sharply last week, driven by lower rates and a rebound in refinance activity. According to MBA’s Weekly Applications Survey for the week ending October 24, total volume rose 7.1% on a seasonally adjusted basis and 7% unadjusted. The Refinance Index increased 9% from the previous week and is now 111% higher than the same week one year ago. Refi demand remains the primary engine of growth, with larger-balance borrowers especially responsive to rate drops. It bears repeating that things look different in context. Specifically, while refi demand looks great
31st October, 25
Servicing Strategy, HELOC, Tax Tools; Interview on Rate Movement; "Subject To"...Assumable GSE Loans?
Change is constant. Soon I head to Austin, in the Great State of Texas, for the TMBA’s star-studded Housing Summit where “change” will certainly be studied. JPMorgan is embracing block chain. Tired of your cleaning supplies smelling like lemon? How about pumpkin, or birthday cake? “Rob, are you hearing from other brokers or LOs that their borrowers are demanding lower rates on their ‘lock’ since the Fed changed?” I am, and it is a great opportunity to be a knowledgeable human (instead of a robot) and explain why it isn’t the case: that overnight rates are not the same as 30-
Servicing Strategy, HELOC, Tax Tools; Interview on Rate Movement; "Subject To"...Assumable GSE Loans?
Change is constant. Soon I head to Austin, in the Great State of Texas, for the TMBA’s star-studded Housing Summit where “change” will certainly be studied. JPMorgan is embracing block chain. Tired of your cleaning supplies smelling like lemon? How about pumpkin, or birthday cake? “Rob, are you hearing from other brokers or LOs that their borrowers are demanding lower rates on their ‘lock’ since the Fed changed?” I am, and it is a great opportunity to be a knowledgeable human (instead of a robot) and explain why it isn’t the case: that overnight rates are not the same as 30-
31st October, 25
Some Early Month-End Buying
With the shutdown ongoing, and the big ticket econ data vanished into the void, there's little for the bond market to do apart from get its books in order for month-end. If you're curious about some of the month-end trading considerations that can impact bonds, we have a primer. Month-end can involve either buying or selling (or both). Timing can vary, but the more visible impacts tend to show up between 8-10am and/or around the 3pm CME close or 4pm NYSE close. So far today, this morning's strength has some month-end flavor with apparent asset-allocation trading (bond yields
Some Early Month-End Buying
With the shutdown ongoing, and the big ticket econ data vanished into the void, there's little for the bond market to do apart from get its books in order for month-end. If you're curious about some of the month-end trading considerations that can impact bonds, we have a primer. Month-end can involve either buying or selling (or both). Timing can vary, but the more visible impacts tend to show up between 8-10am and/or around the 3pm CME close or 4pm NYSE close. So far today, this morning's strength has some month-end flavor with apparent asset-allocation trading (bond yields
30th October, 25
Uneventfully Flat After Initial Weakness
Uneventfully Flat After Initial Weakness The bond market only had a little more selling to do thanks to the unpleasant tailwind from Wednesday afternoon's Fed press conference. That said, one could also argue that corporate bond issuance was the source of early weakness. Either way, yields are now back where they would have been in lieu of the Oct 10th tariff announcement and the Oct 16th regional bank drama (the two biggest recent events that pushed them lower). Fed rate expectations for the December meeting are worse off--nearly back to levels seen BEFORE the jobs report that
Uneventfully Flat After Initial Weakness
Uneventfully Flat After Initial Weakness The bond market only had a little more selling to do thanks to the unpleasant tailwind from Wednesday afternoon's Fed press conference. That said, one could also argue that corporate bond issuance was the source of early weakness. Either way, yields are now back where they would have been in lieu of the Oct 10th tariff announcement and the Oct 16th regional bank drama (the two biggest recent events that pushed them lower). Fed rate expectations for the December meeting are worse off--nearly back to levels seen BEFORE the jobs report that