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23rd June, 26
Rates Hold Mostly Steady Despite Bond Market Improvement
Mortgage rates may be based directly on the bond market, but the two don't always move in perfect lock-step. Today was a good example of that. Bonds improved enough for rates to move modestly lower according to typical correlation. Instead, the average mortgage lender improved by the smallest possible amount that we register on our daily rate index. When this happens, it's often able to be explained by the timing of intraday volatility in the bond market and that's generally the case this time around. Simply put, yesterday morning's best levels lined up with this morning's weakest levels
Rates Hold Mostly Steady Despite Bond Market Improvement
Mortgage rates may be based directly on the bond market, but the two don't always move in perfect lock-step. Today was a good example of that. Bonds improved enough for rates to move modestly lower according to typical correlation. Instead, the average mortgage lender improved by the smallest possible amount that we register on our daily rate index. When this happens, it's often able to be explained by the timing of intraday volatility in the bond market and that's generally the case this time around. Simply put, yesterday morning's best levels lined up with this morning's weakest levels
23rd June, 26
HELOC, Verification Products; AI Gap; Housing Bill Advances; JPMorganChase on Affordability
Yesterday I published a link to Pennymac Policy Pulse, a newsletter tracking key federal policy developments shaping the housing market and broader U.S. economy. The link went to an old version; above is the link to the most current. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Equifax, a global data, analytics, and technology company, helps mortgage lenders gain the borrower and market insights they need to improve efficiency and make accurate decisions. Access differentiated consumer credit data, powerful consumer and market insights, and income and
HELOC, Verification Products; AI Gap; Housing Bill Advances; JPMorganChase on Affordability
Yesterday I published a link to Pennymac Policy Pulse, a newsletter tracking key federal policy developments shaping the housing market and broader U.S. economy. The link went to an old version; above is the link to the most current. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Equifax, a global data, analytics, and technology company, helps mortgage lenders gain the borrower and market insights they need to improve efficiency and make accurate decisions. Access differentiated consumer credit data, powerful consumer and market insights, and income and
23rd June, 26
Re-Coupling and Range Consolidation
Yesterday's most interesting development was the visible decoupling of bond yields with oil prices. To a lesser extent, one could also lament that mid-morning stock selling failed to benefit bonds, but that's far from a regular correlation these days. In fact, the stock/bond correlation is often reversed when the market is adjusting Fed rate expectations. Today's trading session has seen some re-coupling with yields/oil/stocks all falling together. Some of the bond-specific weakness could have been driven by the official launch of SpaceX's big corporate bond, and there's been a heavy slate of
Re-Coupling and Range Consolidation
Yesterday's most interesting development was the visible decoupling of bond yields with oil prices. To a lesser extent, one could also lament that mid-morning stock selling failed to benefit bonds, but that's far from a regular correlation these days. In fact, the stock/bond correlation is often reversed when the market is adjusting Fed rate expectations. Today's trading session has seen some re-coupling with yields/oil/stocks all falling together. Some of the bond-specific weakness could have been driven by the official launch of SpaceX's big corporate bond, and there's been a heavy slate of
22nd June, 26
What's Up With Bonds Decoupling From Oil, Etc.?
What's Up With Bonds Decoupling From Oil, Etc.? On the average trading day in the past few months, if oil prices were down, and especially if other bond markets were rallying, U.S. bonds were probably rallying too. Today was the opposite and there are no glaringly obvious reasons. It's the sort of trading session where analysts must go hunting for narratives to fit the unexpected trading action. The quarry of such hunts is fairly limited. There's the notion of an "ongoing reaction to last week's Fed announcement" (which we don't love considering there was already a friendly bounce on
What's Up With Bonds Decoupling From Oil, Etc.?
What's Up With Bonds Decoupling From Oil, Etc.? On the average trading day in the past few months, if oil prices were down, and especially if other bond markets were rallying, U.S. bonds were probably rallying too. Today was the opposite and there are no glaringly obvious reasons. It's the sort of trading session where analysts must go hunting for narratives to fit the unexpected trading action. The quarry of such hunts is fairly limited. There's the notion of an "ongoing reaction to last week's Fed announcement" (which we don't love considering there was already a friendly bounce on
22nd June, 26
Mortgage Rates Bounce Back Toward Recent Highs
Mortgage rates gave back the improvement seen last Thursday and broke above last Wednesday's levels to hit the highest mark since June 10th. This isn't a big range in the bigger picture, but it does leave rates near 10-month highs. The move is also a bit counterintuitive given developments in other markets and typical correlations. For instance, On almost any other recent trading day, if oil prices and European bond yields are both moving lower (they are), so are U.S. bond yields and rates. The disconnect may be as simple as an ongoing reaction to last week's Fed announcement which
Mortgage Rates Bounce Back Toward Recent Highs
Mortgage rates gave back the improvement seen last Thursday and broke above last Wednesday's levels to hit the highest mark since June 10th. This isn't a big range in the bigger picture, but it does leave rates near 10-month highs. The move is also a bit counterintuitive given developments in other markets and typical correlations. For instance, On almost any other recent trading day, if oil prices and European bond yields are both moving lower (they are), so are U.S. bond yields and rates. The disconnect may be as simple as an ongoing reaction to last week's Fed announcement which
22nd June, 26
Verification Letter, AI Compliance, Retention, Decisioning Tools; Fix-and-Flip Trends
Pennymac has released the latest edition of its Pennymac Policy Pulse, a newsletter tracking key federal policy developments shaping the housing market and broader U.S. economy. When national or state-level organizations engage in advocacy, they don’t visit the NAR or home builders or large title companies. They visit state legislators, Congress, or federal regulators. It has become impossible to separate politics from residential lending. Lenders are confronted with regulators, people moving states due to politics, expensive property taxes from local governments, state-specific lender and
Verification Letter, AI Compliance, Retention, Decisioning Tools; Fix-and-Flip Trends
Pennymac has released the latest edition of its Pennymac Policy Pulse, a newsletter tracking key federal policy developments shaping the housing market and broader U.S. economy. When national or state-level organizations engage in advocacy, they don’t visit the NAR or home builders or large title companies. They visit state legislators, Congress, or federal regulators. It has become impossible to separate politics from residential lending. Lenders are confronted with regulators, people moving states due to politics, expensive property taxes from local governments, state-specific lender and
22nd June, 26
Bonds Starting Weaker Despite Lower Oil and EU Bond Recovery
European bond yields surged higher on Friday in response to political uncertainty in the U.K., among other things (ongoing global reaction to Fed day and U.S./Iran peace deal status, etc). Treasury yields were set to open higher in the overnight session as a result. All of the above is logical and fairly boring. What's interesting is that Treasuries haven't taken the opportunity to recover. European yields certainly have and oil prices have steadily dropped back toward Thursday's lows. Additionally, the fact that 10yr and 2yr yields are up by the same amount suggests there's not an active Fed
Bonds Starting Weaker Despite Lower Oil and EU Bond Recovery
European bond yields surged higher on Friday in response to political uncertainty in the U.K., among other things (ongoing global reaction to Fed day and U.S./Iran peace deal status, etc). Treasury yields were set to open higher in the overnight session as a result. All of the above is logical and fairly boring. What's interesting is that Treasuries haven't taken the opportunity to recover. European yields certainly have and oil prices have steadily dropped back toward Thursday's lows. Additionally, the fact that 10yr and 2yr yields are up by the same amount suggests there's not an active Fed
18th June, 26
Perfectly Acceptable Conclusion to a Potentially Volatile Week
Perfectly Acceptable Conclusion to a Potentially Volatile Week With markets closed for the Juneteenth holiday on Friday, Thursday marked the end of the trading week. Considering the sell-off on Wednesday afternoon, the week had the potential to end on an uncomfortably volatile note. Instead, bonds pushed back nicely in the other direction--even though MBS didn't recoup as much of their losses as 10yr Treasuries. True, there is some sense of foreboding in the inability of 10yr yields to move below 4.42%, but all told, the week was actually surprisingly calm after factoring in Thursday's gains.
Perfectly Acceptable Conclusion to a Potentially Volatile Week
Perfectly Acceptable Conclusion to a Potentially Volatile Week With markets closed for the Juneteenth holiday on Friday, Thursday marked the end of the trading week. Considering the sell-off on Wednesday afternoon, the week had the potential to end on an uncomfortably volatile note. Instead, bonds pushed back nicely in the other direction--even though MBS didn't recoup as much of their losses as 10yr Treasuries. True, there is some sense of foreboding in the inability of 10yr yields to move below 4.42%, but all told, the week was actually surprisingly calm after factoring in Thursday's gains.
18th June, 26
Mortgage Rates Stage Decent Recovery of Post-Fed Losses
Mortgage rates spiked yesterday after the Fed announcement. The primary driver was the Fed's revised outlook for potential rate hikes later this year. Because the Fed Funds Rate governs ultra-short-term transactions (24hrs or less), it has the biggest impact on the shortest-term debt and a diminishing impact on longer term debt. While the typical mortgage may be ABLE to last for 30 years, in practice, the average mortgage length (due to refinances and sales) is a moving target assumed to be around 5 years. That's helping us today. Shorter-term debt is still having some indigestion over
Mortgage Rates Stage Decent Recovery of Post-Fed Losses
Mortgage rates spiked yesterday after the Fed announcement. The primary driver was the Fed's revised outlook for potential rate hikes later this year. Because the Fed Funds Rate governs ultra-short-term transactions (24hrs or less), it has the biggest impact on the shortest-term debt and a diminishing impact on longer term debt. While the typical mortgage may be ABLE to last for 30 years, in practice, the average mortgage length (due to refinances and sales) is a moving target assumed to be around 5 years. That's helping us today. Shorter-term debt is still having some indigestion over
18th June, 26
Mortgage Applications Give Back Some of Last Week's Gains
Mortgage applications pulled back last week as rates moved around in response to fresh inflation data and shifting geopolitical headlines. The Mortgage Bankers Association (MBA) reported a 3.8% decline in total application volume on a seasonally adjusted basis for the week ending June 12. Refinance activity accounted for much of the slowdown. The Refinance Index fell 5% from the previous week, though it remained 17% above the same period one year ago. Purchase demand also softened, but has generally done a better job of holding near multi-year highs. The seasonally adjusted Purchase Index
Mortgage Applications Give Back Some of Last Week's Gains
Mortgage applications pulled back last week as rates moved around in response to fresh inflation data and shifting geopolitical headlines. The Mortgage Bankers Association (MBA) reported a 3.8% decline in total application volume on a seasonally adjusted basis for the week ending June 12. Refinance activity accounted for much of the slowdown. The Refinance Index fell 5% from the previous week, though it remained 17% above the same period one year ago. Purchase demand also softened, but has generally done a better job of holding near multi-year highs. The seasonally adjusted Purchase Index