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21st November, 25
Bonds Hold Gains Despite Ongoing Recovery in Stocks
Bonds Hold Gains Despite Ongoing Recovery in Stocks The stock market factored into the bond market's performance on Friday. In pre-market trading stocks managed a big bounce after NY Fed's Williams spoke favorably about December's rate cut potential. Bonds benefited from that comment initially, but the stock rally quickly forced bonds to find a floor for the day. From then on, stocks continued putting upward pressure on rates, but the net effect was that bonds simply held sideways whereas they might have otherwise continued to rally. Econ Data / Events Non Farm Payrolls (Sep) 119K vs 50K
Bonds Hold Gains Despite Ongoing Recovery in Stocks
Bonds Hold Gains Despite Ongoing Recovery in Stocks The stock market factored into the bond market's performance on Friday. In pre-market trading stocks managed a big bounce after NY Fed's Williams spoke favorably about December's rate cut potential. Bonds benefited from that comment initially, but the stock rally quickly forced bonds to find a floor for the day. From then on, stocks continued putting upward pressure on rates, but the net effect was that bonds simply held sideways whereas they might have otherwise continued to rally. Econ Data / Events Non Farm Payrolls (Sep) 119K vs 50K
21st November, 25
Mortgage Rates Nudge Lower to Remain In The Same Old Range
Recent stock market losses have gotten a lot attention in the news recently. While there's no reliable correlation between stocks and interest rates, when stock losses are as big as they have been recently, it increases the tendency for rates to move in the same direction. That was definitely the case today. Bonds (which dictate rates) improved overnight as stocks sank further. But as early as 7am, a reversal began to take shape. The catalyst was a comment from NY Fed Pres Williams who said he sees a good case for a rate cut at the upcoming December meeting. On one hand, improved rate
Mortgage Rates Nudge Lower to Remain In The Same Old Range
Recent stock market losses have gotten a lot attention in the news recently. While there's no reliable correlation between stocks and interest rates, when stock losses are as big as they have been recently, it increases the tendency for rates to move in the same direction. That was definitely the case today. Bonds (which dictate rates) improved overnight as stocks sank further. But as early as 7am, a reversal began to take shape. The catalyst was a comment from NY Fed Pres Williams who said he sees a good case for a rate cut at the upcoming December meeting. On one hand, improved rate
21st November, 25
Small Steps Higher, Same Stubbornly Low Territory for Existing Home Sales
Existing-home sales posted another modest gain in October, rising 1.2% to a seasonally adjusted annual rate of 4.10 million , according to the National Association of Realtors (NAR). Sales are now 1.7% higher than a year ago as lower mortgage rates helped offset the drag from the government shutdown. Demand continues to run stronger than it did through most of 2023 and early 2024, even if the overall pace remains historically subdued. “Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” said NAR Chief Economist
Small Steps Higher, Same Stubbornly Low Territory for Existing Home Sales
Existing-home sales posted another modest gain in October, rising 1.2% to a seasonally adjusted annual rate of 4.10 million , according to the National Association of Realtors (NAR). Sales are now 1.7% higher than a year ago as lower mortgage rates helped offset the drag from the government shutdown. Demand continues to run stronger than it did through most of 2023 and early 2024, even if the overall pace remains historically subdued. “Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates,” said NAR Chief Economist
21st November, 25
Rising Rates Pull Applications Lower, but Year-Over-Year Gains Hold Firm
Mortgage applications moved lower last week as rates continued drifting higher for a third straight week. MBA’s Weekly Applications Survey for the week ending November 14 showed a 5.2% drop in total volume on a seasonally adjusted basis and a 7% decline unadjusted. The Refinance Index fell 7% from the previous week but is still running 125% above last year’s levels. Even with the pullback, refi activity remains firmly in recovery territory compared to the past two years. That said, the recent rate bump pushed the average refinance loan size to its lowest reading since August, underscoring
Rising Rates Pull Applications Lower, but Year-Over-Year Gains Hold Firm
Mortgage applications moved lower last week as rates continued drifting higher for a third straight week. MBA’s Weekly Applications Survey for the week ending November 14 showed a 5.2% drop in total volume on a seasonally adjusted basis and a 7% decline unadjusted. The Refinance Index fell 7% from the previous week but is still running 125% above last year’s levels. Even with the pullback, refi activity remains firmly in recovery territory compared to the past two years. That said, the recent rate bump pushed the average refinance loan size to its lowest reading since August, underscoring
21st November, 25
Builders Slash Prices at Record Pace Despite Slight Sentiment Improvement
Builder confidence levels are still kicking the same sad little can down the road, just with slightly more enthusiasm. The November National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) inched up to 38 from 37 in October, marking the 19th straight month below the 50 line that separates expansion from contraction. Looking at the underlying components, we find the same deck of cards shuffled in a slightly different order. The component for current sales conditions improved two points to 41 and the buyer traffic index ticked up one point to 26—still firmly in “
Builders Slash Prices at Record Pace Despite Slight Sentiment Improvement
Builder confidence levels are still kicking the same sad little can down the road, just with slightly more enthusiasm. The November National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) inched up to 38 from 37 in October, marking the 19th straight month below the 50 line that separates expansion from contraction. Looking at the underlying components, we find the same deck of cards shuffled in a slightly different order. The component for current sales conditions improved two points to 41 and the buyer traffic index ticked up one point to 26—still firmly in “
21st November, 25
Hedging, Broker Database, Distributed Meeting AI Tools; Experian on Renter's Thoughts; Director Pulte a Liability?
“Six cows were smoking joints and playing poker. That's right: The steaks were pretty high.” The steaks, uh, stakes, are high when changes to our housing finance system occur, or actions are taken that are negatively impact borrowers or reputations. In a typical organization, the CEO reports to the board of directors. The FHFA oversees Freddie Mac and Fannie Mae, and with FHFA Director Bill Pulte, he pretty much appointed the boards of Freddie and Fannie but they are ultimately responsible for his actions and statements. So is President Trump who nominated him to his post. The Department
Hedging, Broker Database, Distributed Meeting AI Tools; Experian on Renter's Thoughts; Director Pulte a Liability?
“Six cows were smoking joints and playing poker. That's right: The steaks were pretty high.” The steaks, uh, stakes, are high when changes to our housing finance system occur, or actions are taken that are negatively impact borrowers or reputations. In a typical organization, the CEO reports to the board of directors. The FHFA oversees Freddie Mac and Fannie Mae, and with FHFA Director Bill Pulte, he pretty much appointed the boards of Freddie and Fannie but they are ultimately responsible for his actions and statements. So is President Trump who nominated him to his post. The Department
21st November, 25
Modestly Stronger With Bonds Tracking Stock Losses
It was a pretty straightforward overnight session with a very high degree of correlation between bond yields and stock prices. The final leg of the rally arrived on comments from NY Fed Pres Williams who said he sees room for a December cut. As a reminder, apart from Powell, Williams is the most important voice at the Fed and his comments carry more predictive weight than others. While the initial reaction was favorable for bonds, it was also favorable stocks--so much so that it put an end to bonds' rally momentum for now. The relative impacts of recent events on Fed rate cut expectations is
Modestly Stronger With Bonds Tracking Stock Losses
It was a pretty straightforward overnight session with a very high degree of correlation between bond yields and stock prices. The final leg of the rally arrived on comments from NY Fed Pres Williams who said he sees room for a December cut. As a reminder, apart from Powell, Williams is the most important voice at the Fed and his comments carry more predictive weight than others. While the initial reaction was favorable for bonds, it was also favorable stocks--so much so that it put an end to bonds' rally momentum for now. The relative impacts of recent events on Fed rate cut expectations is
20th November, 25
Decent Gains Remain Intact; Stock Market Contribution is a Wild Card
Decent Gains Remain Intact; Stock Market Contribution is a Wild Card The rescheduled release of the September jobs report played out exactly as we expected in terms of bond market impact. Volumes surged to the highest levels since the late October Fed announcement and bonds managed a clear response in spite of arguably mixed results. That said, the response was still logical given the Fed's stated preference for the unemployment rate over the payroll count. One could imagine an even more decisive rally if NFP was low or negative (or if the unemployment rate was another 0.1% higher). The
Decent Gains Remain Intact; Stock Market Contribution is a Wild Card
Decent Gains Remain Intact; Stock Market Contribution is a Wild Card The rescheduled release of the September jobs report played out exactly as we expected in terms of bond market impact. Volumes surged to the highest levels since the late October Fed announcement and bonds managed a clear response in spite of arguably mixed results. That said, the response was still logical given the Fed's stated preference for the unemployment rate over the payroll count. One could imagine an even more decisive rally if NFP was low or negative (or if the unemployment rate was another 0.1% higher). The
20th November, 25
Mortgage Rates Hold Steady Thanks to Jobs Report
Yesterday, we discussed the fact that mortgage rates were heading into Thursday with a disadvantage (for most lenders, anyway). This had to do with the fact that lenders prefer to avoid changing rates in the middle of the day (unless bond market movement is big enough to force their hands) and the fact that bonds had weakened just enough for lenders to begin considering changing rates by the end of the day. In other words, lenders either had to increase rates yesterday afternoon or this morning, all other things being equal. The only thing that would have mitigated that necessity would have
Mortgage Rates Hold Steady Thanks to Jobs Report
Yesterday, we discussed the fact that mortgage rates were heading into Thursday with a disadvantage (for most lenders, anyway). This had to do with the fact that lenders prefer to avoid changing rates in the middle of the day (unless bond market movement is big enough to force their hands) and the fact that bonds had weakened just enough for lenders to begin considering changing rates by the end of the day. In other words, lenders either had to increase rates yesterday afternoon or this morning, all other things being equal. The only thing that would have mitigated that necessity would have
20th November, 25
Servicing, Default, Remote Office, Verification Tools; Pennymac CEO on Servicing; IMB Profits; Cash-Strapped CFPB?
“Here we are, a week away from Thanksgiving, and I’m in Kansas City. My family told me to stop telling Thanksgiving jokes, but I said I couldn’t quit cold turkey.” The CFPB isn’t going away “cold turkey” but yesterday’s personnel move was a reminder that there are clever people in Washington DC. It was a follow up to Trump Administration court filings last week that said the CFPB was on track to run out of money to operate at the beginning of next year and argued that it was legally prohibited from seeking an infusion of funding from the Federal Reserve, which is the bureau’s
Servicing, Default, Remote Office, Verification Tools; Pennymac CEO on Servicing; IMB Profits; Cash-Strapped CFPB?
“Here we are, a week away from Thanksgiving, and I’m in Kansas City. My family told me to stop telling Thanksgiving jokes, but I said I couldn’t quit cold turkey.” The CFPB isn’t going away “cold turkey” but yesterday’s personnel move was a reminder that there are clever people in Washington DC. It was a follow up to Trump Administration court filings last week that said the CFPB was on track to run out of money to operate at the beginning of next year and argued that it was legally prohibited from seeking an infusion of funding from the Federal Reserve, which is the bureau’s