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 the market will remain willing to rally if it sees cracks in the next round of relevant data. Econ Data / Events Philly Fed 10.3 vs 3.0 f'cast Retail Sales 0.4 vs 0.3 f'cast Jobless Claims 241k vs 260k f'cast Industrial Production -0.3 vs -0.2 f'cast, 0.3 prev Builder Confidence 43 vs 42 f'cast, 41 prev Market Movement Recap 08:52 AM modestly weaker overnight with additional losses after data. MBS down 6 ticks (.19). 10yr up 5.3bps at 4.067 10:34 AM Slowly and steadily weaker. MBS down 10 ticks (.31) and 10yr up 7.4bps at 4.088 02:55 PM Treading water at weakest levels. MBS down just over 3/8ths and 10yr up 8.1bps at 4.095
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 the market will remain willing to rally if it sees cracks in the next round of relevant data. Econ Data / Events Philly Fed 10.3 vs 3.0 f'cast Retail Sales 0.4 vs 0.3 f'cast Jobless Claims 241k vs 260k f'cast Industrial Production -0.3 vs -0.2 f'cast, 0.3 prev Builder Confidence 43 vs 42 f'cast, 41 prev Market Movement Recap 08:52 AM modestly weaker overnight with additional losses after data. MBS down 6 ticks (.19). 10yr up 5.3bps at 4.067 10:34 AM Slowly and steadily weaker. MBS down 10 ticks (.31) and 10yr up 7.4bps at 4.088 02:55 PM Treading water at weakest levels. MBS down just over 3/8ths and 10yr up 8.1bps at 4.095
17th October, 24
Mortgage Rates Move Higher After Stronger Economic Data
Mortgage rates are driven by the bond market and bonds consistently take cues from economic data. Traders have been waiting on this Thursday's economic data ever since last Thursday, largely because there haven't been any major reports between now and then. The market constantly tries to adjust based on whatever it thinks it can know ahead of time. That means that the median forecast among hundreds of economists for any given report tends to be reflected in the bond market well before the report in question is released. Then on release day, the market reacts to deviations from the consensus. In today's case, all 3 of this morning's key reports were stronger than expected. Jobless Claims dropped to 241k for the week. Both last week's level and this week's forecasts were 260k. The Philly Fed Business Outlook Survey came in at 10.3 versus a median forecast of 3.0 and a previous reading of 1.7. Retail Sales rose 0.4% vs a 0.3% forecast and 0.1% in the last report. Immediately following the release of the data (all 3 hit at 8:30am ET), the bond market lost ground. That means bond prices fell and yields (aka "rates") rose. Mortgage lenders then base their rates for the day on the trading levels in the bond market. Unsurprisingly, that meant the average lender moved back near their highest recent levels for a top tier conventional 30yr fixed scenario. The silver lining is that rates are still technically in the same range seen over the past week and a half, but that range is quite a bit higher than September's.
Mortgage Rates Move Higher After Stronger Economic Data
Mortgage rates are driven by the bond market and bonds consistently take cues from economic data. Traders have been waiting on this Thursday's economic data ever since last Thursday, largely because there haven't been any major reports between now and then. The market constantly tries to adjust based on whatever it thinks it can know ahead of time. That means that the median forecast among hundreds of economists for any given report tends to be reflected in the bond market well before the report in question is released. Then on release day, the market reacts to deviations from the consensus. In today's case, all 3 of this morning's key reports were stronger than expected. Jobless Claims dropped to 241k for the week. Both last week's level and this week's forecasts were 260k. The Philly Fed Business Outlook Survey came in at 10.3 versus a median forecast of 3.0 and a previous reading of 1.7. Retail Sales rose 0.4% vs a 0.3% forecast and 0.1% in the last report. Immediately following the release of the data (all 3 hit at 8:30am ET), the bond market lost ground. That means bond prices fell and yields (aka "rates") rose. Mortgage lenders then base their rates for the day on the trading levels in the bond market. Unsurprisingly, that meant the average lender moved back near their highest recent levels for a top tier conventional 30yr fixed scenario. The silver lining is that rates are still technically in the same range seen over the past week and a half, but that range is quite a bit higher than September's.
17th October, 24
Trifecta of Unfriendly Economic Reports For Bonds
Ever since last Thursday's econ data failed to cause a stir in financial markets, we knew we'd be waiting until today for big, data-driven volatility potential. Volatility goes both ways depending on the tone of the data. Unfortunately for bonds, all three of this morning's economic reports were stronger than expected. The resulting move in bonds has been logical and unpleasant with yields quickly moving back toward last week's highs. Perhaps it's some small victory that yields remain several bps below those highs, or simply an indication that this is only bush league data compared to the jobs report.
Trifecta of Unfriendly Economic Reports For Bonds
Ever since last Thursday's econ data failed to cause a stir in financial markets, we knew we'd be waiting until today for big, data-driven volatility potential. Volatility goes both ways depending on the tone of the data. Unfortunately for bonds, all three of this morning's economic reports were stronger than expected. The resulting move in bonds has been logical and unpleasant with yields quickly moving back toward last week's highs. Perhaps it's some small victory that yields remain several bps below those highs, or simply an indication that this is only bush league data compared to the jobs report.
17th October, 24
Correspondent, SMS, Social Media Compliance Offerings; Vendors Raising Money; STRATMOR on Loan Repurchases
Today would have been the 65th birthday of comedian Norm Macdonald. And while that may make your head shake, here’s something else that definitely will: Hurricane Milton will result in an estimated $36 billion in insurance claims due to damage from wind, storm surges, and flooding, following Hurricane Helene’s $19 billion. For those without an HP-12C, that’s $55 billion. No, I don’t know, compared to that cost, how much insurance companies earned in premiums in those areas since the last loss. Making money, spending money… To make more money in lending, or even survive, you need to figure out where the money is being spent. Freddie Mac has a report on the cost to originate that you should either skim through or print and read. Speaking of Freddie, the ex-head of the FHFA is being interviewed today, and you can bet that he’ll be talking about possible election-related Agency moves. Mark Calabria is the former director of the Federal Housing Finance Agency, which regulates and supervises Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. He laid the groundwork for a removal of Fannie Mae and Freddie Mac from government conservatorship. (Today’s podcast can be found here, and this week’s is sponsored by Aidium. Your leads are showing signs of intent to buy or refinance a home far before traditional triggers like pulling credit. Aidium's AI Lead Prioritization helps you sift through bad leads and focus on the ones that are ready to transact. Spend your time where it matters most with Aidium. Hear an interview with Tavant’s Sundeep Mathur on providing AI-powered tools that build better borrowers by enabling and empowering consumers with the knowledge, tools, and data needed to make sound financial decisions.)
Correspondent, SMS, Social Media Compliance Offerings; Vendors Raising Money; STRATMOR on Loan Repurchases
Today would have been the 65th birthday of comedian Norm Macdonald. And while that may make your head shake, here’s something else that definitely will: Hurricane Milton will result in an estimated $36 billion in insurance claims due to damage from wind, storm surges, and flooding, following Hurricane Helene’s $19 billion. For those without an HP-12C, that’s $55 billion. No, I don’t know, compared to that cost, how much insurance companies earned in premiums in those areas since the last loss. Making money, spending money… To make more money in lending, or even survive, you need to figure out where the money is being spent. Freddie Mac has a report on the cost to originate that you should either skim through or print and read. Speaking of Freddie, the ex-head of the FHFA is being interviewed today, and you can bet that he’ll be talking about possible election-related Agency moves. Mark Calabria is the former director of the Federal Housing Finance Agency, which regulates and supervises Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. He laid the groundwork for a removal of Fannie Mae and Freddie Mac from government conservatorship. (Today’s podcast can be found here, and this week’s is sponsored by Aidium. Your leads are showing signs of intent to buy or refinance a home far before traditional triggers like pulling credit. Aidium's AI Lead Prioritization helps you sift through bad leads and focus on the ones that are ready to transact. Spend your time where it matters most with Aidium. Hear an interview with Tavant’s Sundeep Mathur on providing AI-powered tools that build better borrowers by enabling and empowering consumers with the knowledge, tools, and data needed to make sound financial decisions.)
16th October, 24
Thursday Morning is This Week's Biggest Volatility Risk
Thursday Morning is This Week's Biggest Volatility Risk While there was certainly a bit of an upward drift in Treasury yields through the end of last week, mortgage rates and MBS saw it as a bit more of a sideways grind. Last Thursday's data had a chance to create some momentum, but ultimately failed. Thursday is also this week's most active day for potentially significant econ data with Retail Sales likely getting the most attention. That said, "attention" has a lot to do with the size of beat/miss. As always, the market is already priced to reflect the median forecast, so there's no way to know if one outcome is more likely than another. What we do know is that Thursday's data is not in the same league as the big jobs report or several other events in early November. It's just the best we have this week. Market Movement Recap 08:51 AM Stronger overnight but losing some ground early. MBS unchanged. 10yr down 1.1bps at 4.022 12:34 PM modest gains into the noon hour. MBS up 2 ticks (.06) and 10yr down 2.3bps at 4.01 03:19 PM Very sideways. MBS up 3 ticks (.09) and 10yr down 1.5bps at 4.018
Thursday Morning is This Week's Biggest Volatility Risk
Thursday Morning is This Week's Biggest Volatility Risk While there was certainly a bit of an upward drift in Treasury yields through the end of last week, mortgage rates and MBS saw it as a bit more of a sideways grind. Last Thursday's data had a chance to create some momentum, but ultimately failed. Thursday is also this week's most active day for potentially significant econ data with Retail Sales likely getting the most attention. That said, "attention" has a lot to do with the size of beat/miss. As always, the market is already priced to reflect the median forecast, so there's no way to know if one outcome is more likely than another. What we do know is that Thursday's data is not in the same league as the big jobs report or several other events in early November. It's just the best we have this week. Market Movement Recap 08:51 AM Stronger overnight but losing some ground early. MBS unchanged. 10yr down 1.1bps at 4.022 12:34 PM modest gains into the noon hour. MBS up 2 ticks (.06) and 10yr down 2.3bps at 4.01 03:19 PM Very sideways. MBS up 3 ticks (.09) and 10yr down 1.5bps at 4.018
16th October, 24
Mortgage Rates Hold Steady Ahead of Retail Sales Data
Mortgage rates have been holding in a fairly narrow range since the middle of last week and today was one of the least interesting additions to the trend. The average lender is essentially unchanged versus yesterday, up a mere 0.01%, but down 0.02% from last Friday. Mortgage rates are primarily a function of trading levels in the bond market. Bonds respond to a variety of motivations, but the biggest risks and opportunities are tied to major economic reports. With that in mind, it's no surprise to see a general lack of movement recently as last week's only major economic data was inconclusive. Tomorrow morning brings the first potentially significant data of the week with several reports being released at 8:30am ET with Retail Sales being the headliner. This is well before most any mortgage lender updates its rate offerings for the day. There's never a guarantee that economic data will move the needle. All we can know is that potential volatility is higher. The data would have to come in much higher or lower than forecast in order to cause a big move in rates. Even then, Retail Sales and tomorrow's other reports are not in the same league as the mighty jobs report that sent rates screaming higher 2 weeks ago.
Mortgage Rates Hold Steady Ahead of Retail Sales Data
Mortgage rates have been holding in a fairly narrow range since the middle of last week and today was one of the least interesting additions to the trend. The average lender is essentially unchanged versus yesterday, up a mere 0.01%, but down 0.02% from last Friday. Mortgage rates are primarily a function of trading levels in the bond market. Bonds respond to a variety of motivations, but the biggest risks and opportunities are tied to major economic reports. With that in mind, it's no surprise to see a general lack of movement recently as last week's only major economic data was inconclusive. Tomorrow morning brings the first potentially significant data of the week with several reports being released at 8:30am ET with Retail Sales being the headliner. This is well before most any mortgage lender updates its rate offerings for the day. There's never a guarantee that economic data will move the needle. All we can know is that potential volatility is higher. The data would have to come in much higher or lower than forecast in order to cause a big move in rates. Even then, Retail Sales and tomorrow's other reports are not in the same league as the mighty jobs report that sent rates screaming higher 2 weeks ago.
16th October, 24
Correspondent, Fraud Reporting, Compliance, Default Servicing Products; Fairway Responds to CFPB/DOJ's Action
An attorney will tell you, “Never miss a good chance to shut up.” Today I head to the Portland/Vancouver area for a few days with Banner Bank. Oregon has 12,000 licensed attorneys, Washington 27,000; number of regulators and administrators unknown. (Hear Mark Calabria interviewed tomorrow.) Banking Law 360 reported that, “At a tough-talking appearance in Utah on Friday, Consumer Financial Protection Bureau Director Rohit Chopra said he doesn't sweat potential legal challenges to his agency's rules and suggested some industry-side attorneys can be ‘leeches’ who relish compliance uncertainty if it boosts their billable hours.” Some will counter with, “Make the regulations clearer and there won’t be any uncertainty.” Still others will tell you that the CFPB, fearing a change in presidential administration, will be ramping up enforcement actions and fines. The CFPB is rumored to be cutting deals on settlements now, because regulators are worried they will all be undercut if Trump wins. Yesterday the CFPB announced that it and the Department of Justice took action against Fairway Independent Mortgage Corporation. More below. (Today’s podcast can be found here, and this week’s is sponsored by Aidium. Aidium's CRM and Business Intelligence platform is the go-to system for lenders and enterprises serious about embracing technology to drive progress. Aidium boasts hundreds of integrations, a simple-to-use automation builder, reporting suite, and true AI for lead prioritization. Hear an interview with Aidium’s Spencer Dusebout on how technology is helping lenders increase margins, improve operational efficiency, and better serve clients.)
Correspondent, Fraud Reporting, Compliance, Default Servicing Products; Fairway Responds to CFPB/DOJ's Action
An attorney will tell you, “Never miss a good chance to shut up.” Today I head to the Portland/Vancouver area for a few days with Banner Bank. Oregon has 12,000 licensed attorneys, Washington 27,000; number of regulators and administrators unknown. (Hear Mark Calabria interviewed tomorrow.) Banking Law 360 reported that, “At a tough-talking appearance in Utah on Friday, Consumer Financial Protection Bureau Director Rohit Chopra said he doesn't sweat potential legal challenges to his agency's rules and suggested some industry-side attorneys can be ‘leeches’ who relish compliance uncertainty if it boosts their billable hours.” Some will counter with, “Make the regulations clearer and there won’t be any uncertainty.” Still others will tell you that the CFPB, fearing a change in presidential administration, will be ramping up enforcement actions and fines. The CFPB is rumored to be cutting deals on settlements now, because regulators are worried they will all be undercut if Trump wins. Yesterday the CFPB announced that it and the Department of Justice took action against Fairway Independent Mortgage Corporation. More below. (Today’s podcast can be found here, and this week’s is sponsored by Aidium. Aidium's CRM and Business Intelligence platform is the go-to system for lenders and enterprises serious about embracing technology to drive progress. Aidium boasts hundreds of integrations, a simple-to-use automation builder, reporting suite, and true AI for lead prioritization. Hear an interview with Aidium’s Spencer Dusebout on how technology is helping lenders increase margins, improve operational efficiency, and better serve clients.)
16th October, 24
Mixed, Slightly Stronger Start, But Still Waiting For Thursday's Data
The market was hungry for data before the jobs report week and has been even hungrier since then. Unfortunately, there haven't been many compelling reports and, more importantly, no results that have been far enough away from expectations to cause much drama. Last week's Jobless Claims number could have been the only exception, but it was mitigated by hurricane related distortions. The same will likely be said of Tomorrow's installment, thus leaving Retail Sale as the week's only big to-do. As for today, it's just another placeholder in the choppy, sideways drift that's been intact since the jobs report.
Mixed, Slightly Stronger Start, But Still Waiting For Thursday's Data
The market was hungry for data before the jobs report week and has been even hungrier since then. Unfortunately, there haven't been many compelling reports and, more importantly, no results that have been far enough away from expectations to cause much drama. Last week's Jobless Claims number could have been the only exception, but it was mitigated by hurricane related distortions. The same will likely be said of Tomorrow's installment, thus leaving Retail Sale as the week's only big to-do. As for today, it's just another placeholder in the choppy, sideways drift that's been intact since the jobs report.
15th October, 24
Uneventful Day, But That's a Victory These Days
Uneventful Day, But That's a Victory These Days Last week's bond market action offered some glimmers of hope that the most recent jobs report wouldn't cause ongoing momentum toward higher rates, but yields nonetheless hit their highest levels on Thu/Fri. Today is a victory in that context as bonds moved back into the lower half of last week's trading range and all without any major market movers in play. To be fair to the NY Fed Manufacturing index, it was a market mover and it did help set a rate-friendly tone out of the gate. That said, the move looked more like a yield curve adjustment as opposed to a widespread bond rally (i.e. 30yr yields dropped 9bps while 2yr yields were basically unchanged). Thursday AM's data is higher consequence. Econ Data / Events NY Fed Manufacturing -11.90 vs 3.8 f'cast 11.5 prev Market Movement Recap 08:34 AM Moderately stronger overnight with a slight additional improvement after data. MBS up an eighth. 10yr down 4.1bps at 4.059 11:32 AM Holding near best levels in Treasuries (most gains in longer durations). 10yr down 5.7bps at 4.044. MBS up 5 ticks (.16). 02:13 PM MBS still up an eighth, but down 3 ticks (.09) from AM highs. 10yr down 6.5bps at 4.036 04:15 PM Heading out at essentially the same levels as the previous update. MBS up an eighth and 10yr down 6.7bps at 4.035
Uneventful Day, But That's a Victory These Days
Uneventful Day, But That's a Victory These Days Last week's bond market action offered some glimmers of hope that the most recent jobs report wouldn't cause ongoing momentum toward higher rates, but yields nonetheless hit their highest levels on Thu/Fri. Today is a victory in that context as bonds moved back into the lower half of last week's trading range and all without any major market movers in play. To be fair to the NY Fed Manufacturing index, it was a market mover and it did help set a rate-friendly tone out of the gate. That said, the move looked more like a yield curve adjustment as opposed to a widespread bond rally (i.e. 30yr yields dropped 9bps while 2yr yields were basically unchanged). Thursday AM's data is higher consequence. Econ Data / Events NY Fed Manufacturing -11.90 vs 3.8 f'cast 11.5 prev Market Movement Recap 08:34 AM Moderately stronger overnight with a slight additional improvement after data. MBS up an eighth. 10yr down 4.1bps at 4.059 11:32 AM Holding near best levels in Treasuries (most gains in longer durations). 10yr down 5.7bps at 4.044. MBS up 5 ticks (.16). 02:13 PM MBS still up an eighth, but down 3 ticks (.09) from AM highs. 10yr down 6.5bps at 4.036 04:15 PM Heading out at essentially the same levels as the previous update. MBS up an eighth and 10yr down 6.7bps at 4.035
15th October, 24
Mortgage Rates Sideways to Slightly Lower
The average mortgage lender is quoting rates that are just a fraction of a hair lower today compared to last Friday. Lenders were either closed or otherwise not able to update rates yesterday due to the Federal holiday. Anything other than "higher" is a victory recently. Rate jumped at the 2nd fastest pace of the year after the jobs report that was released on Friday, October 4th, and continued moving higher through last Wednesday. They've calmed down since then, but they haven't made any meaningful progress back toward the lower levels seen a few weeks ago. Context matters. In the short term, it would be easy to lament the fact that rates are up about 0.50% in about a month. But if we merely look back to early April, rates are still down the better part of 1 percent. In year over year terms, the improvement is about 1.4%. That's a very solid pace under any circumstances, but especially in the absence of the onset of a recession. Today was uneventful in terms of bond market movement and intraday rate changes from mortgage lenders. Bigger swings will likely depend on bigger economic reports and there are only a few heavy hitters on the calendar each month. This week's only notable contender is the Retail Sales report on Thursday morning at 8:30am ET. This doesn't mean rates can't move at all between now and then--simply that Retail Sales has the best chance to inspire bigger movement.
Mortgage Rates Sideways to Slightly Lower
The average mortgage lender is quoting rates that are just a fraction of a hair lower today compared to last Friday. Lenders were either closed or otherwise not able to update rates yesterday due to the Federal holiday. Anything other than "higher" is a victory recently. Rate jumped at the 2nd fastest pace of the year after the jobs report that was released on Friday, October 4th, and continued moving higher through last Wednesday. They've calmed down since then, but they haven't made any meaningful progress back toward the lower levels seen a few weeks ago. Context matters. In the short term, it would be easy to lament the fact that rates are up about 0.50% in about a month. But if we merely look back to early April, rates are still down the better part of 1 percent. In year over year terms, the improvement is about 1.4%. That's a very solid pace under any circumstances, but especially in the absence of the onset of a recession. Today was uneventful in terms of bond market movement and intraday rate changes from mortgage lenders. Bigger swings will likely depend on bigger economic reports and there are only a few heavy hitters on the calendar each month. This week's only notable contender is the Retail Sales report on Thursday morning at 8:30am ET. This doesn't mean rates can't move at all between now and then--simply that Retail Sales has the best chance to inspire bigger movement.