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21st October, 24
Ratio of Weakness to Confirmed Explanations is Off The Charts
Ratio of Weakness to Confirmed Explanations is Off The Charts Every year there are a few days where bonds move as if obviously inspired in spite of a distinct absence of obvious inspiration. Monday was one of those days. Sure, there are a few "best guesses" making the rounds, but all of them are fairly easy to debate and none of them are worth the 11.5bp jump to the highest 10yr yields in almost 3 months. News articles pointing out "the economy" or "the deficit" are grasping at straws. These things are valid, but they wouldn't adequately account for today's sell-off.
Ratio of Weakness to Confirmed Explanations is Off The Charts
Ratio of Weakness to Confirmed Explanations is Off The Charts Every year there are a few days where bonds move as if obviously inspired in spite of a distinct absence of obvious inspiration. Monday was one of those days. Sure, there are a few "best guesses" making the rounds, but all of them are fairly easy to debate and none of them are worth the 11.5bp jump to the highest 10yr yields in almost 3 months. News articles pointing out "the economy" or "the deficit" are grasping at straws. These things are valid, but they wouldn't adequately account for today's sell-off.
21st October, 24
Rates Jump Quickly to Highest Levels Since July
By the smallest of margins, mortgage rates are back up to levels last seen in July. That means we've gone from being fairly close to 6% in mid-September to being nearly as close to 7% today when it comes to top tier 30yr fixed scenarios for the average lender. Today's jump was particularly quick and frustratingly lacking in satisfying explanations. It's not the explanations make bad news any more palatable, but it's always more frustrating to be confronted with unpleasantness that seems to be happening for no good reason. There are several theories, but nothing as obvious or
Rates Jump Quickly to Highest Levels Since July
By the smallest of margins, mortgage rates are back up to levels last seen in July. That means we've gone from being fairly close to 6% in mid-September to being nearly as close to 7% today when it comes to top tier 30yr fixed scenarios for the average lender. Today's jump was particularly quick and frustratingly lacking in satisfying explanations. It's not the explanations make bad news any more palatable, but it's always more frustrating to be confronted with unpleasantness that seems to be happening for no good reason. There are several theories, but nothing as obvious or
21st October, 24
Bonds Have a (Bad) Case of The Mondays
First off, there's no great explanation for the extent to which bonds are losing ground this morning. These days happen occasionally. Sometimes an elusive market mover becomes clearer later in the day. Other times, we're forced to rely on our best guesses. With that in mind, here's a quick catalog of usual suspects at times like this. 1. Mondays, liquidity greases the skids for higher volatility. This is a non-issue when there aren't any threatening market movers in play. Let's say illiquidity makes a move 2-3x bigger than normal. That doesn't matter if the
Bonds Have a (Bad) Case of The Mondays
First off, there's no great explanation for the extent to which bonds are losing ground this morning. These days happen occasionally. Sometimes an elusive market mover becomes clearer later in the day. Other times, we're forced to rely on our best guesses. With that in mind, here's a quick catalog of usual suspects at times like this. 1. Mondays, liquidity greases the skids for higher volatility. This is a non-issue when there aren't any threatening market movers in play. Let's say illiquidity makes a move 2-3x bigger than normal. That doesn't matter if the
21st October, 24
Broker Education, Reverse Mortgage, Credit Report, Warehouse Products; Disaster News
Sports have a lot of fans, and heroes. With only 10 days until Halloween, what a great time of year to be a sports fanatic. You never have to leave your den, or local sports bar, when football, baseball, basketball, and hockey are all on TV, and if you look around you can find golf and tennis! What isn’t a great time is if you’re either lending or borrowing in Florida on a condo. With Provident Funding announcing that it is bailing on condos, at some point it will be harder to finance condos than co-ops. It’s also the time of year when a) lenders and vendors are trying to forecast and
Broker Education, Reverse Mortgage, Credit Report, Warehouse Products; Disaster News
Sports have a lot of fans, and heroes. With only 10 days until Halloween, what a great time of year to be a sports fanatic. You never have to leave your den, or local sports bar, when football, baseball, basketball, and hockey are all on TV, and if you look around you can find golf and tennis! What isn’t a great time is if you’re either lending or borrowing in Florida on a condo. With Provident Funding announcing that it is bailing on condos, at some point it will be harder to finance condos than co-ops. It’s also the time of year when a) lenders and vendors are trying to forecast and
18th October, 24
Waiting Game Returns With Straightforward, Sleepy Friday
Waiting Game Returns With Straightforward, Sleepy Friday Bonds were technically a hair weaker in the overnight session, but even if they never improved from those levels, yields still would have been inside the prevailing range (4.0 to 4.12 in terms of the 10yr). As it stands, they did improve a bit, ultimately hitting 4.063 at the lows and holding near there through the close. MBS picked up a microscopic gain as well. All of the above is perfectly reasonable considering the lack of motivation in economic data. Today's only report (residential construction) hasn't moved
Waiting Game Returns With Straightforward, Sleepy Friday
Waiting Game Returns With Straightforward, Sleepy Friday Bonds were technically a hair weaker in the overnight session, but even if they never improved from those levels, yields still would have been inside the prevailing range (4.0 to 4.12 in terms of the 10yr). As it stands, they did improve a bit, ultimately hitting 4.063 at the lows and holding near there through the close. MBS picked up a microscopic gain as well. All of the above is perfectly reasonable considering the lack of motivation in economic data. Today's only report (residential construction) hasn't moved
18th October, 24
Mortgage Rates Mostly Steady This Week After Uneventful Friday
There hasn't been much day to day movement in mortgage rates after the big jump caused by the jobs report earlier in the month. That jump ended on Monday the 7th and the average 30yr fixed rate hasn't moved more than 0.06% since then. For context, we wouldn't consider a short term move to be significant unless it was at least twice as big (the jobs report reaction was 6 times bigger at +0.36%). Today was the smallest move of the week with Friday's average rate holding perfectly in line with Thursday's and only 0.04% above last Friday's latest levels. In other words, it was a
Mortgage Rates Mostly Steady This Week After Uneventful Friday
There hasn't been much day to day movement in mortgage rates after the big jump caused by the jobs report earlier in the month. That jump ended on Monday the 7th and the average 30yr fixed rate hasn't moved more than 0.06% since then. For context, we wouldn't consider a short term move to be significant unless it was at least twice as big (the jobs report reaction was 6 times bigger at +0.36%). Today was the smallest move of the week with Friday's average rate holding perfectly in line with Thursday's and only 0.04% above last Friday's latest levels. In other words, it was a
18th October, 24
Mixed Signals in New Home Construction Data
While this technically signals some cooling in new construction potential, it wasn't much more of a drop than investors expected. Moreover, there has been a gradual cooling trend intact for more than 2 years. That's not as ominous as it sounds considering construction activity is still higher than it was in mid-2019. Housing starts, which measure groundbreakings for new home construction, actually came in just slightly higher than forecasts, barely declining month-over-month. Here too, there is a general cooling trend over the past few years, but a flatter trend
Mixed Signals in New Home Construction Data
While this technically signals some cooling in new construction potential, it wasn't much more of a drop than investors expected. Moreover, there has been a gradual cooling trend intact for more than 2 years. That's not as ominous as it sounds considering construction activity is still higher than it was in mid-2019. Housing starts, which measure groundbreakings for new home construction, actually came in just slightly higher than forecasts, barely declining month-over-month. Here too, there is a general cooling trend over the past few years, but a flatter trend
18th October, 24
Digital LOS, Marketing Automation, Realtor Strategy Tools; FHA and VA News; Partner Opportunity
A while back I parked my car outside a government office building in Sacramento. "Sir, you can't park here," said a cop. "This is where our politicians work." "Don't worry, I've locked it." Here at the Banner Bank sales conference in Vancouver, someone suggested that if it weren’t for the presidential election (don’t expect to have an answer the day after) or Israel, the mainstream press would have nothing to talk about. Remember the “old days” when a winner would be declared election night? It appears that we won’t have an answer the morning after the election, or for days, with
Digital LOS, Marketing Automation, Realtor Strategy Tools; FHA and VA News; Partner Opportunity
A while back I parked my car outside a government office building in Sacramento. "Sir, you can't park here," said a cop. "This is where our politicians work." "Don't worry, I've locked it." Here at the Banner Bank sales conference in Vancouver, someone suggested that if it weren’t for the presidential election (don’t expect to have an answer the day after) or Israel, the mainstream press would have nothing to talk about. Remember the “old days” when a winner would be declared election night? It appears that we won’t have an answer the morning after the election, or for days, with
18th October, 24
In The Absence of Data, No Need For More Selling
While the recent trend has been unpleasant for the bond market, at least it's logical. Apart from some uncertainty related to the election and forthcoming Fed meeting, data drives all (to be fair, data drives the Fed as well). Thursday brought the week's biggest supply of data with all the big reports being stronger than expected. Bonds logically tanked. Now today, there is no significant data so bonds have no reason to tank. For those wondering why we'd say there's no data today despite the release of Housing Starts/Building Permits, that's because the new residential
In The Absence of Data, No Need For More Selling
While the recent trend has been unpleasant for the bond market, at least it's logical. Apart from some uncertainty related to the election and forthcoming Fed meeting, data drives all (to be fair, data drives the Fed as well). Thursday brought the week's biggest supply of data with all the big reports being stronger than expected. Bonds logically tanked. Now today, there is no significant data so bonds have no reason to tank. For those wondering why we'd say there's no data today despite the release of Housing Starts/Building Permits, that's because the new residential
17th October, 24
Fairly Big Sell-Off, But Last Week's Range is Intact
Fairly Big Sell-Off, But Last Week's Range is Intact Bonds dealt with a trifecta of unfriendly economic data today with slightly stronger Retail Sales leading the charge. Jobless claims and Philly Fed certainly didn't help. In the desert of data that exists between each month's jobs reports, only a handful of days stand out as potential sources of course correction. Today was one of them and the 8bp sell-off in 10yr yields confirms it. Despite that reasonably big jump, yields are still under last week's highs. That's a decent consolation prize--one that suggests
Fairly Big Sell-Off, But Last Week's Range is Intact
Fairly Big Sell-Off, But Last Week's Range is Intact Bonds dealt with a trifecta of unfriendly economic data today with slightly stronger Retail Sales leading the charge. Jobless claims and Philly Fed certainly didn't help. In the desert of data that exists between each month's jobs reports, only a handful of days stand out as potential sources of course correction. Today was one of them and the 8bp sell-off in 10yr yields confirms it. Despite that reasonably big jump, yields are still under last week's highs. That's a decent consolation prize--one that suggests
