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31st July, 26
Esoteric Forex Drama Blasts Bonds, Maybe
Esoteric Forex Drama Blasts Bonds, Maybe Friday was very much NOT on the beaten path of typical bond market considerations with most of the selling arguably stemming from Japanese currency intervention. We've seen similar episodes in the past, but today's installment came with a twist. In addition to Japan confirming it was selling foreign bonds to prop up Yen values, the U.S. Treasury also apparently got involved. It warned dealers that it could make trades to support the Yen. No one but those involved knows if that means anything beyond using the ESF to execute currency trades, but the
Esoteric Forex Drama Blasts Bonds, Maybe
Esoteric Forex Drama Blasts Bonds, Maybe Friday was very much NOT on the beaten path of typical bond market considerations with most of the selling arguably stemming from Japanese currency intervention. We've seen similar episodes in the past, but today's installment came with a twist. In addition to Japan confirming it was selling foreign bonds to prop up Yen values, the U.S. Treasury also apparently got involved. It warned dealers that it could make trades to support the Yen. No one but those involved knows if that means anything beyond using the ESF to execute currency trades, but the
31st July, 26
Mortgage Rates Back Near Long-Term Highs
To be fair, mortgage rates haven't been far from their long-term highs in over a week, but today's 30yr fixed index level of 6.83% is functionally equivalent to the actual long-term high of 6.85% seen on July 23rd. Higher rates are driven by weakness in the bond market. The latter can happen for many reasons. Sometimes those reasons are as simple as an economic report showing stronger job growth or higher inflation. Other times, the reasons are more esoteric. Today's bond market weakness may have been modestly influenced by this morning's Employment Cost Index, but the bigger issue
Mortgage Rates Back Near Long-Term Highs
To be fair, mortgage rates haven't been far from their long-term highs in over a week, but today's 30yr fixed index level of 6.83% is functionally equivalent to the actual long-term high of 6.85% seen on July 23rd. Higher rates are driven by weakness in the bond market. The latter can happen for many reasons. Sometimes those reasons are as simple as an economic report showing stronger job growth or higher inflation. Other times, the reasons are more esoteric. Today's bond market weakness may have been modestly influenced by this morning's Employment Cost Index, but the bigger issue
31st July, 26
Regional Divide Persists as Home Price Growth Edges Higher in May
Home price appreciation remained modest in May, according to data from both FHFA and the S&P Cotality Case-Shiller Home Price Indices . Although both reports showed annual price growth improving slightly from April, appreciation continued to trail inflation, underscoring a housing market where elevated mortgage rates, affordability pressures, and uneven regional performance continue to limit broader price gains. FHFA reported that U.S. house prices increased 0.3% on a seasonally adjusted basis in May, reversing April's 0.1% decline. On an annual basis, home prices were 2.2% higher than a
Regional Divide Persists as Home Price Growth Edges Higher in May
Home price appreciation remained modest in May, according to data from both FHFA and the S&P Cotality Case-Shiller Home Price Indices . Although both reports showed annual price growth improving slightly from April, appreciation continued to trail inflation, underscoring a housing market where elevated mortgage rates, affordability pressures, and uneven regional performance continue to limit broader price gains. FHFA reported that U.S. house prices increased 0.3% on a seasonally adjusted basis in May, reversing April's 0.1% decline. On an annual basis, home prices were 2.2% higher than a
31st July, 26
Mortgage Applications Fall 6.4% as Rates Continue Upward March
Mortgage application activity pulled back last week as higher borrowing costs weighed on both home purchase and refinance demand. The Mortgage Bankers Association (MBA) reported a 6.4% decrease in total application volume on a seasonally adjusted basis for the week ending July 24. Purchase applications decreased 4% from the previous week on a seasonally adjusted basis but remained 3% higher than the same week one year ago. While housing inventory has improved in some markets, elevated mortgage rates continue to challenge affordability for many prospective buyers. Refinance activity weakened
Mortgage Applications Fall 6.4% as Rates Continue Upward March
Mortgage application activity pulled back last week as higher borrowing costs weighed on both home purchase and refinance demand. The Mortgage Bankers Association (MBA) reported a 6.4% decrease in total application volume on a seasonally adjusted basis for the week ending July 24. Purchase applications decreased 4% from the previous week on a seasonally adjusted basis but remained 3% higher than the same week one year ago. While housing inventory has improved in some markets, elevated mortgage rates continue to challenge affordability for many prospective buyers. Refinance activity weakened
31st July, 26
Verification, CRA Tracking, State-Level Tax and MGIC Webinars, Non-Agency Product Developments
I am no numerologist, but Freddie Mac’s announcement yesterday, that 30-year mortgage rates are averaging 6.66, caught my attention. Unlike rumors, like the one going around about a Texas IMB buying California IMB, hard, provable numbers are hard to argue with… Like the hundreds of thousands of people every month turning 62. Setting up a reverse division at your company isn’t as difficult, say, parachuting beavers into Idaho. Why should lenders have a reverse mortgage division? Housing wealth among homeowners aged 62 and older rose in Q1 2026 to a record $14.92 trillion, according to the
Verification, CRA Tracking, State-Level Tax and MGIC Webinars, Non-Agency Product Developments
I am no numerologist, but Freddie Mac’s announcement yesterday, that 30-year mortgage rates are averaging 6.66, caught my attention. Unlike rumors, like the one going around about a Texas IMB buying California IMB, hard, provable numbers are hard to argue with… Like the hundreds of thousands of people every month turning 62. Setting up a reverse division at your company isn’t as difficult, say, parachuting beavers into Idaho. Why should lenders have a reverse mortgage division? Housing wealth among homeowners aged 62 and older rose in Q1 2026 to a record $14.92 trillion, according to the
31st July, 26
Japan Currency Intervention, Oil, and Data Causing Some Selling
Japan's Ministry of Finance (MOF) and central bank (BOJ) are a bit more closely linked than Treasury and the Fed. For example, the MOF can instruct the BOJ to sell a bunch of securities to pop up the value of domestic currency. They did this in relatively grand fashion yesterday, but the selling didn't appear to involve Treasuries (as it sometimes does). Now in today's overnight session, there was another Yen-specific spike and this time, it lines up with the start of selling pressure in Treasuries. It's not extreme, and it correlated with Iran headlines causing oil prices to rise. If
Japan Currency Intervention, Oil, and Data Causing Some Selling
Japan's Ministry of Finance (MOF) and central bank (BOJ) are a bit more closely linked than Treasury and the Fed. For example, the MOF can instruct the BOJ to sell a bunch of securities to pop up the value of domestic currency. They did this in relatively grand fashion yesterday, but the selling didn't appear to involve Treasuries (as it sometimes does). Now in today's overnight session, there was another Yen-specific spike and this time, it lines up with the start of selling pressure in Treasuries. It's not extreme, and it correlated with Iran headlines causing oil prices to rise. If
30th July, 26
Bullets Dodged
Bullets Dodged We've seen our fair share of bonds punishing the market on occasions where bond traders were forced to worry about a significant change in a fiscal or monetary regime (or the absence of a desired change). Wednesday's reaction to the Fed ran the risk of setting the stage for similar momentum. While it did technically continue, it was far less forceful on Thursday. Additionally, the evidence was limited to curve steepening rather than outright losses (apart from 30yr bonds). In short, bonds fired a warning shot, but they're not going to obsess about it unless given additional
Bullets Dodged
Bullets Dodged We've seen our fair share of bonds punishing the market on occasions where bond traders were forced to worry about a significant change in a fiscal or monetary regime (or the absence of a desired change). Wednesday's reaction to the Fed ran the risk of setting the stage for similar momentum. While it did technically continue, it was far less forceful on Thursday. Additionally, the evidence was limited to curve steepening rather than outright losses (apart from 30yr bonds). In short, bonds fired a warning shot, but they're not going to obsess about it unless given additional
30th July, 26
Mortgage Rates Sideways to Slightly Lower
It's not at all uncommon for mortgage rates to experience microscopic movement in either direction on any given day. In fact, it's probably the most common eventuality over time. In that sense, today was unremarkable with the average lender moving just a hair lower versus yesterday's latest levels. But in another sense, it's very good news. After yesterday's market reaction to the Fed press conference, there was a risk that bonds (which dictate rates) would continue their protest. The absence of additional drama suggests the reaction was "one and done." This morning's economic data had a
Mortgage Rates Sideways to Slightly Lower
It's not at all uncommon for mortgage rates to experience microscopic movement in either direction on any given day. In fact, it's probably the most common eventuality over time. In that sense, today was unremarkable with the average lender moving just a hair lower versus yesterday's latest levels. But in another sense, it's very good news. After yesterday's market reaction to the Fed press conference, there was a risk that bonds (which dictate rates) would continue their protest. The absence of additional drama suggests the reaction was "one and done." This morning's economic data had a
30th July, 26
UAD 3.6, Reverse, AI, Co-Issue Products; Freddie Clocks in at $3.8 Billion; Morgan Stanley Did What in Mortgages?
I was recently doing some bike riding in the Napa Valley and spent some time speaking with a wine maker. She told me that because of the increase in temperatures, growers are buying land to the south and planting vineyards there, nearer the San Francisco Bay where it is cooler. Their livelihood is at stake “up Valley.” In addition, this year’s harvest is a full month earlier than historical harvests as the grapes ripened quickly. Other fruit growers are seeing the same thing: products are ripening earlier in the year. One state over, Phoenix’s high temperatures this weekend will be
UAD 3.6, Reverse, AI, Co-Issue Products; Freddie Clocks in at $3.8 Billion; Morgan Stanley Did What in Mortgages?
I was recently doing some bike riding in the Napa Valley and spent some time speaking with a wine maker. She told me that because of the increase in temperatures, growers are buying land to the south and planting vineyards there, nearer the San Francisco Bay where it is cooler. Their livelihood is at stake “up Valley.” In addition, this year’s harvest is a full month earlier than historical harvests as the grapes ripened quickly. Other fruit growers are seeing the same thing: products are ripening earlier in the year. One state over, Phoenix’s high temperatures this weekend will be
30th July, 26
Sideways Start is a Victory
This morning could have been much worse. The bond market could have continued spiraling on fear that it is now responsible for conducting monetary policy--something that sounds weird when you first read it, but is actually central to the discussion based on Warsh's comments in yesterday's press conference. In short, bonds tightened policy yesterday and acknowledged that the Fed did not (2yr lower, 10/30yr much higher). That theme is continuing this morning, but thankfully is only playing out in curve trading as 30yr bonds are flat while 2yr yields continue dropping. Ho-hum econ data helped by
Sideways Start is a Victory
This morning could have been much worse. The bond market could have continued spiraling on fear that it is now responsible for conducting monetary policy--something that sounds weird when you first read it, but is actually central to the discussion based on Warsh's comments in yesterday's press conference. In short, bonds tightened policy yesterday and acknowledged that the Fed did not (2yr lower, 10/30yr much higher). That theme is continuing this morning, but thankfully is only playing out in curve trading as 30yr bonds are flat while 2yr yields continue dropping. Ho-hum econ data helped by