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14th May, 26
Mortgage Rates Move Moderately Lower
May continues to be a more volatile month than the bulk of April when it comes to day over day mortgage rate movement. While the average day has seen that volatility play out in favor of higher rates, today was thankfully the opposite. Yesterday's latest levels left the average lender at 6 week highs with a top tier 30yr fixed rate of 6.57. The underlying bond market was already beginning to recover yesterday afternoon. Combined with additional, modest bond market improvement overnight, today's 30yr fixed rate fell to 6.52% on average. The Iran war remains the primary source of
Mortgage Rates Move Moderately Lower
May continues to be a more volatile month than the bulk of April when it comes to day over day mortgage rate movement. While the average day has seen that volatility play out in favor of higher rates, today was thankfully the opposite. Yesterday's latest levels left the average lender at 6 week highs with a top tier 30yr fixed rate of 6.57. The underlying bond market was already beginning to recover yesterday afternoon. Combined with additional, modest bond market improvement overnight, today's 30yr fixed rate fell to 6.52% on average. The Iran war remains the primary source of
14th May, 26
AI MBS Trading, AI Workflows, Sub-Servicing, eNote, Asset-Based Lending Tools; Colorado Revamps AI Law
How do you go about trying to run your company’s AI efforts without knowing the rules? Testing suggests Google's AI overviews tells millions of lies per hour. Colorado rewrote its landmark AI law: “Unpacking SB 26-189 and what it means for businesses” described by Ballard Spahr. AI, recapture, and capital markets were one of the topics in yesterday’s Capital Markets Wrap. Certainly, companies in our biz are grappling with the AI influence on the manufacturing process, and using it for guideline questions, is something on which many lenders are ruminating. (Today’s podcast can be
AI MBS Trading, AI Workflows, Sub-Servicing, eNote, Asset-Based Lending Tools; Colorado Revamps AI Law
How do you go about trying to run your company’s AI efforts without knowing the rules? Testing suggests Google's AI overviews tells millions of lies per hour. Colorado rewrote its landmark AI law: “Unpacking SB 26-189 and what it means for businesses” described by Ballard Spahr. AI, recapture, and capital markets were one of the topics in yesterday’s Capital Markets Wrap. Certainly, companies in our biz are grappling with the AI influence on the manufacturing process, and using it for guideline questions, is something on which many lenders are ruminating. (Today’s podcast can be
14th May, 26
Stronger Start. Ho Hum Data
A recovery toward lower oil prices paved the way for the bond market to recover yesterday morning's weakness and the same theme continued in the overnight session. 8:30am econ data represented a modest risk of volatility, but with Jobless Claims slightly higher and Retail Sales right on target, there was almost no detectable trading response. With that, we head into the rest of the session with markets on the lookout for any meaningful war-related headlines. More than a few hot takes are expecting the Trump/Xi meeting to yield some sort of breakthrough with respect to the war, but it's
Stronger Start. Ho Hum Data
A recovery toward lower oil prices paved the way for the bond market to recover yesterday morning's weakness and the same theme continued in the overnight session. 8:30am econ data represented a modest risk of volatility, but with Jobless Claims slightly higher and Retail Sales right on target, there was almost no detectable trading response. With that, we head into the rest of the session with markets on the lookout for any meaningful war-related headlines. More than a few hot takes are expecting the Trump/Xi meeting to yield some sort of breakthrough with respect to the war, but it's
13th May, 26
MBS Fully Recover After Initial Reaction to Inflation Data
MBS Fully Recover After Initial Reaction to Inflation Data There's no question that this morning's PPI data hit the bond market. The volume spike was easily higher than that seen with yesterday's CPI and the market movement left nothing to the imagination. In the big picture, a few bps of weakness in bond yields isn't that alarming, but if we consider PPI isn't usually a big deal and that yields were already pushing recent highs, things begin looking more meaningful. Despite the initial reaction, bonds found their footing after 11:30am. 10yr yields made it almost all the way back to pre-data
MBS Fully Recover After Initial Reaction to Inflation Data
MBS Fully Recover After Initial Reaction to Inflation Data There's no question that this morning's PPI data hit the bond market. The volume spike was easily higher than that seen with yesterday's CPI and the market movement left nothing to the imagination. In the big picture, a few bps of weakness in bond yields isn't that alarming, but if we consider PPI isn't usually a big deal and that yields were already pushing recent highs, things begin looking more meaningful. Despite the initial reaction, bonds found their footing after 11:30am. 10yr yields made it almost all the way back to pre-data
13th May, 26
Mortgage Rates Officially at 6 Week Highs
Mortgage rates rose somewhat sharply yesterday to match the highest level since March 27th. They're just a hair higher today, thus officially at 6-week highs. Whereas yesterday's Consumer Price Index (CPI) didn't have an obviously negative impact on rates, today's Producer Price Index (PPI) did. Both are big inflation reports. CPI is typically much more likely to cause a reaction in rates, but PPI showed a much bigger surge in inflation this morning. Even then, the underlying bond market wasn't too much worse by the end of the day and the mortgage-specific bond market actually made a
Mortgage Rates Officially at 6 Week Highs
Mortgage rates rose somewhat sharply yesterday to match the highest level since March 27th. They're just a hair higher today, thus officially at 6-week highs. Whereas yesterday's Consumer Price Index (CPI) didn't have an obviously negative impact on rates, today's Producer Price Index (PPI) did. Both are big inflation reports. CPI is typically much more likely to cause a reaction in rates, but PPI showed a much bigger surge in inflation this morning. Even then, the underlying bond market wasn't too much worse by the end of the day and the mortgage-specific bond market actually made a
13th May, 26
AI, CRM, Verification, DSCR, HELOC Products; Gov't Programs; Rates and Inflation, Borrower Psychology
The April FOMC Meeting concluded with the Fed leaving interest rates unchanged, and it was the last under Jerome Powell's chairmanship. Chair Powell is the first Fed Chairman to step down and remain on the Board since 1948 due to a) the Federal investigation regarding the cost of renovating the Fed's Headquarters, and b) he probably wants to have a voice in keeping the Fed independent from presidents. Kevin Warsh is slated to be the next Fed Chairman, taking the helm on May 15th, and at this point most expect no changes from Fed policy until 2027. (Today’s podcast can be found here and this
AI, CRM, Verification, DSCR, HELOC Products; Gov't Programs; Rates and Inflation, Borrower Psychology
The April FOMC Meeting concluded with the Fed leaving interest rates unchanged, and it was the last under Jerome Powell's chairmanship. Chair Powell is the first Fed Chairman to step down and remain on the Board since 1948 due to a) the Federal investigation regarding the cost of renovating the Fed's Headquarters, and b) he probably wants to have a voice in keeping the Fed independent from presidents. Kevin Warsh is slated to be the next Fed Chairman, taking the helm on May 15th, and at this point most expect no changes from Fed policy until 2027. (Today’s podcast can be found here and this
13th May, 26
PPI Hit Even Harder Than CPI, But Damage is Minimal
The Producer Price Index (PPI) is much more volatile and, on average, much less of a market mover than the Consumer Price Index (CPI), but occasionally, it swings for the fences. Today's release is a clear example with the monthly headline coming in at 1.5 vs 0.5 forecast. In annual terms, headline inflation is a whopping 6.0% versus a 4.9% forecast--up sharply from last month's 4.3% (itself upwardly revised from 4.0%). This is easily the most onerous spike since the pandemic. Even though PPI hit the market harder than CPI, that's not saying much. Bonds are only 2bps weaker at 10am ET--a
PPI Hit Even Harder Than CPI, But Damage is Minimal
The Producer Price Index (PPI) is much more volatile and, on average, much less of a market mover than the Consumer Price Index (CPI), but occasionally, it swings for the fences. Today's release is a clear example with the monthly headline coming in at 1.5 vs 0.5 forecast. In annual terms, headline inflation is a whopping 6.0% versus a 4.9% forecast--up sharply from last month's 4.3% (itself upwardly revised from 4.0%). This is easily the most onerous spike since the pandemic. Even though PPI hit the market harder than CPI, that's not saying much. Bonds are only 2bps weaker at 10am ET--a
12th May, 26
Highest Yields in 10 Months on War Headlines and Auction Concessions
Highest Yields in 10 Months on War Headlines and Auction Concessions Because CPI came out slightly higher today and because of its status as a bigger potential market mover, many rate watchers will assume that's the reason 10yr yields closed at their highest level since last July. But bond yields were actually lower in the first 40 minutes post-CPI. It wasn't until newswires cited Trump saying he's in no hurry to end the war that yields began spiking (and stocks began selling). It's also worth noting that yields were already up to 4.44% ahead of CPI and only moved 2bps higher by the close (i.e
Highest Yields in 10 Months on War Headlines and Auction Concessions
Highest Yields in 10 Months on War Headlines and Auction Concessions Because CPI came out slightly higher today and because of its status as a bigger potential market mover, many rate watchers will assume that's the reason 10yr yields closed at their highest level since last July. But bond yields were actually lower in the first 40 minutes post-CPI. It wasn't until newswires cited Trump saying he's in no hurry to end the war that yields began spiking (and stocks began selling). It's also worth noting that yields were already up to 4.44% ahead of CPI and only moved 2bps higher by the close (i.e
12th May, 26
Mortgage Rates Match Highest Level Since March
When the Iran war was in its initial escalation phase, the initial surge in markets took the top-tier 30yr fixed rate to 6.64% for the average lender by March 27th. Rates moved more than 0.30% lower by mid April as peace prospect improved. The third phase of rate movement began in late April and has generally involved a jump back up toward 6.5% with the first 2 days of the present week accounting for a move from 6.42% to 6.56%. That matches the highest level seen since March 27th. Bonds yields (which underlie rates) have followed longer-term oil prices to their highest recent levels as
Mortgage Rates Match Highest Level Since March
When the Iran war was in its initial escalation phase, the initial surge in markets took the top-tier 30yr fixed rate to 6.64% for the average lender by March 27th. Rates moved more than 0.30% lower by mid April as peace prospect improved. The third phase of rate movement began in late April and has generally involved a jump back up toward 6.5% with the first 2 days of the present week accounting for a move from 6.42% to 6.56%. That matches the highest level seen since March 27th. Bonds yields (which underlie rates) have followed longer-term oil prices to their highest recent levels as
12th May, 26
Best Ex, Equity, Servicing, AI, Valuation Tools; Job Market's Mixed Signals; Purchase Market Dragging?
If you’re hoping that the summer is going to bring a trend of purchase market prosperity, I hope you’re right but there are indications otherwise. Rocket Companies’ CEO reported its highest profit in four years, but CEO Varun Krishna told investors that the company’s real-time data shows the spring homebuying season is not delivering the volume increase that historical patterns would suggest. The cost of war, oil prices, and homebuyer psychology are heavy (let’s hope temporary) weights. And Optimal Blue’s latest Market Advantage report finds mortgage lock activity cooling in April
Best Ex, Equity, Servicing, AI, Valuation Tools; Job Market's Mixed Signals; Purchase Market Dragging?
If you’re hoping that the summer is going to bring a trend of purchase market prosperity, I hope you’re right but there are indications otherwise. Rocket Companies’ CEO reported its highest profit in four years, but CEO Varun Krishna told investors that the company’s real-time data shows the spring homebuying season is not delivering the volume increase that historical patterns would suggest. The cost of war, oil prices, and homebuyer psychology are heavy (let’s hope temporary) weights. And Optimal Blue’s latest Market Advantage report finds mortgage lock activity cooling in April