Did Japan Sell Treasuries Today? Bonds sold off medium big on Friday in a move that offered little by way of overt explanations. There were reports of "rate checks" in the USD/JPY market--something that CAN precede the selling of U.S. bonds in order to buy JPY. Notably, there were no reports of actual intervention, but sometimes these things aren't revealed until the following trading day. If this explains today's weakness (and to be clear, we're not sure it does), it would be good for the U.S. bond market as it would mean 10yr yields still held under 5% despite added, artificial pressure.…
We'd be the first to remind you that mortgage rates are primarily determined by trading levels in the bond market--specifically those for mortgage-backed securities (MBS). That said, there are days where rates don't do exactly what MBS suggest. Today was one of them. According to the bond market, mortgage rates should have been much higher than they were yesterday. As it stands, the average lender was just barely higher. The discrepancy comes down to the volatility experienced earlier in the week. Lenders have some latitude when it comes to setting mortgage rates. If the underlying…
Pending home sales edged higher in August as gains in the South and West offset declines in the Northeast and Midwest. The National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI), which tracks signed contracts on existing homes, increased 0.3% from July but was down 4.7% from a year earlier. The modest increase came despite another period of elevated mortgage rates. NAR Chief Economist Lawrence Yun said income growth has been outpacing home price growth, but higher borrowing costs continue to limit the resulting improvement in buying power and housing demand. Pending sales…
Residential construction was mixed in August as housing starts recovered in the single-family sector, while building permits declined from July levels and completions fell sharply. The latest Census Bureau data points to continued unevenness in residential construction, with builders pulling back somewhat on new authorizations even as single-family construction picked up. Privately owned housing starts fell 2.6% to a seasonally adjusted annual rate of 1.275 million , down 1.2% from the August 2025 pace. Single-family starts, however, increased 7.6% to 918k , while starts for buildings…
Builder sentiment took a meaningful step backward in September, with higher mortgage rates, rising construction costs and worsening labor shortages weighing on the market for newly built homes. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell three points to 32 , matching September 2025 as the lowest level in over 3 years. Breakdown of various component indices: HMI Component August September Change Current sales conditions 39 35 -4 Sales expectations 43 37 -6 Prospective buyer traffic 23 23 Unchanged “Buyer traffic has weakened across much of…
Mortgage application activity weakened again last week, with higher mortgage rates weighing on both purchase and refinance demand. The Mortgage Bankers Association (MBA) reported a 4.1% decrease in total application volume on a seasonally adjusted basis for the week ending September 11. The results include an adjustment for the Labor Day holiday. Purchase applications fell 1% from the previous week on a seasonally adjusted basis. The unadjusted Purchase Index dropped 13%, although that figure was heavily affected by the holiday. More notably, purchase activity was 19% lower than the same week…
A big thrust by many lenders and originators is helping homeowners use the equity in their home or offering a shared equity product. And why not: there’s $36 trillion in home equity out there. And in an industry where we’ll be lucky to hit $2 trillion this year, it’s a juicy target. Jim Riccitelli, CEO of Unlock Technologies, sent me a recent study titled, “How Shared Equity Products Work, Who Is Using Them, and Regulatory Recommendations”. (Today’s podcast can be found here. This week’s ‘casts are sponsored by FirstClose, which provides fintech solutions to HELOC and mortgage lenders…
After Thursday's rather triumphant trading session in the bond market, today's moderate losses may be unpleasant or surprising to some. But they should be neither. Thursday was a bit exuberant in a good way, and Fridays often see position squaring. A bit of a pull-back is not only survivable but arguably more logical this morning, especially with oil prices being modestly higher. Bottom line: if MBS manage to hold this line without losing much more than a quarter point, and if 10yr yields end below 5%, compare today's closing levels to Tuesday's, consider that the Fed hiked this week and…
Even More Confirmation Throughout The Day It was heartening to see bonds erase yesterday's losses by the time domestic trading got underway today. Unmitigated victory would have required flat/higher oil prices. Instead, we were forced to wonder how much credit to give lower oil prices versus the expectation that longer-term rates would paradoxically appreciate a more hawkish Fed stance. This uncertainty increasingly vanished throughout the day. Oil prices steadily rose more than $3 between 8:30am and 1pm, but bonds were sideways to stronger the entire time. There's still some caution…
We love it when a plan comes together. Heading into yesterday's Fed announcement, the hope was that a rate hike would reassure investors in longer-term bonds (like those that underlie mortgage rates). We also didn't expect that benefit to necessarily play out on the day of the hike itself (it didn't). In fact, Fed day threw rates a bit of a curveball--not because the Fed hiked, but rather, due to the implications for additional hikes in Fed Chair Warsh's press conference. Thankfully, as of today, Warsh's unexpected hawkishness proved to be a temporary inconvenience for the market and…
Headlines and excerpts are sourced from Mortgage News Daily. All rights remain with the original publisher.
