Mortgage rates dropped again today, and at a much faster pace than yesterday's decline. Top tier 30yr fixed rates are now down to 7.33% for the average lender, a drop of more than 0.25% from the long-term highs seen just last week. There are a lot of moving parts behind the scenes so let's focus on what we can know or at least reasonably conclude. [thirtyyearmortgagerates] Is this the big shift in rates we've been waiting for? The kind that sometimes follows sustained spikes to long-term highs? While there's a chance the past 5 days COULD serve as the early indication of a broader rate…
Exciting Times, But Don't Get Too Excited There's no question that the past 5 days have been the best 5 days that we've seen in a long time in terms of direction movement in rates. They're made all the more miraculous because the past 2 days included much higher inflation readings. In a vacuum, inflation data was bad for rates. But the opposing forces are/were stronger in this case. There are two to consider: AI/tech correction and bond seller exhaustion. We've said for a while that yields would eventually be high enough to prompt some value buying and that 5.34-5.35% may be 2026's version of…
“My coworker asked me how I’m doing this morning. Yet another third party trying to steal my data!” Data travels at the speed of light. Mickey D’s is reportedly using artificial intelligence to “dynamically” price its burgers. Imagine a lender trying that! AI filled the exhibition hall at the MBA’s conference this week. I don’t use AI to write this Commentary, but perhaps I should tack “AI” onto the end of it in case I want to raise money or attract more readers. On second thought, nah, we’re good as it is. But along those lines, AI is the focal point in today’s Chrisman LLC Demo Day, the…
Core PPI was up 0.7 vs 0.3 forecast this morning. That's something that would normally send yields much higher. But everything is different this morning. Bonds rallied sharply in the overnight session and added a bit more to the gains after the 8:30am data. This is on top of yesterday's stunning comeback after getting rocked by higher CPI. To a small extent, the "control group" Retail Sales number may have helped, but the 8:30am gains have more to do with investors waiting to see PPI and finding it would add less than 0.1% to PCE in 2 weeks. This allows the market to maintain its focus…
You won't see too many days like today when it comes to mortgage rates and the underlying bond market that drives them. Bonds were eagerly awaiting this morning's Consumer Price Index (CPI), a key inflation report and an important source of guidance for the Fed rate outlook. Reminder: while the Fed Funds Rate itself does not control mortgage rates, Fed rate EXPECTATIONS tend to correlate much better. Fed rate expectations leapt higher this morning after inflation came in hotter than expected. The rest of the interest rate world followed in lock step. When lenders released their…
What percentage of the industry is shifting credit policies? Yesterday the industry learned that Fairway Independent and Movement are “now implementing VantageScore 4.0 (owned by Experian, Equifax, and TransUnion)… The VantageScore 4.0 credit scoring model is offered through Experian, Equifax and TransUnion, as well as mortgage technology providers including Xactus, Calyx, and Optimal Blue. Its use in mortgage was pioneered by Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks, FHA, and the VA. Keeping up on things can be a full-time job, and Chrisman Demo Day returns…
Unrounded core CPI came in at 0.335, which nearly rounds to 0.4% versus an expectations of 0.2%. This is a big surprise when it comes to inflation data, and it matters more at the moment given the rapidly evolving Fed rate hike outlook. Recent Fed speeches caused a significant pull-back in rate hike expectations. Today's inflation data undoes most of that progress. It may not cause rates to break into new highs, but it makes a strong case for this week's lows being the floor until further notice. Confused about the market reaction? Let's talk more. For those wondering why…
Light Volatility and Modest Gains Ahead of CPI Bonds were modestly stronger in the overnight session in a move that is easiest to attribute to ongoing supportive buying in response to recently higher yields in the long end of the market. Fed Funds Futures were also in play as implied Fed Funds tracked fairly well with 10yr yields in terms of movement. Oil prices did little to explain the AM gains, but correlated well with an insignificant pull-back between 8:30-10:00am ET. Afternoon comments from Williams (who only sees the need for 1 more rate hike and then no hikes in 2027) helped the short…
It was an uneventfully good day for mortgage rates. Unlike the average day over the past several weeks, there was minimal intraday volatility in the underlying bond market. This allowed the average lender to issue rates once this morning and avoid intraday rate changes. Fortunately, the overnight market movement was in our favor today as traders continued finding value in recently higher bond yields. Rates are based on the bond market where higher yields increasingly create demand among investors. In 2023, when the 10yr Treasury yield hit 5%, we saw a solid show of support from…
If you want privacy, you may not want to buy a new car: Many new cards share your data with third-party companies via technology. Here at the MBA National, tech is not only a popular topic, but, thanks to AddyAI, there is an Agentic registered “attendee” named Adele. The robot’s job is roaming the halls. Are you doing your “dream” job? They vary by country, by the way, and here’s a map. Some jobs are “unsung,” and one of the topics at the MMLA event in Michigan, the MBAC event in South Carolina, and here at “The National” in Chicago is how lenders need to focus on some of these roles as they…
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