What's New in Real Estate!
MBS RECAP: Strong Showing For Longer-Dated Bonds
Posted To: MBS Commentary
Strong Showing For Longer-Dated Bonds With the Fed's dot plot in focus yesterday, the associated drama was heavily weighted toward the short end of the yield curve. Relative to recent stability, 2yr Treasuries got destroyed while 30yr Treasuries were barely touched. MBS lean a bit shorter in duration than 10yr benchmarks, so it's no surprise to see them underperform today. If we let them compete with 5yr Treasuries, different story (i.e. don't read too much into "MBS underperformance" when the yield curve is making such big moves). No data tomorrow and limited data next week. The week after that brings another jobs report, and thus another chance to see the next big flash of volatility. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Jobless Claims 412k vs 359k f'cast...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 17 Jun 2021 | 1:31 pm
No, Mortgage Rates Aren't Lower Today!
Posted To: Mortgage Rate Watch
It's Thursday on a volatile week for the bond market and thus time, once again, to play our favorite game: "no, rates didn't really do that." Sometimes, a majority of mortgage rate headlines say rates went higher when they're really lower. In today's case, rates are much higher than they were yesterday morning despite multiple headlines suggesting the opposite. Who's right? Who's wrong? And Why? First off, timing matters . Yesterday morning's rates were much lower than yesterday afternoon's rates. This morning's rates were higher still. Finally, this afternoon has brought some relief, but not enough to get the average lender back to yesterday morning's levels. In all cases, this week's rates are definitely not lower than last week's. The headlines that disagree with that assertion are invariably...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 17 Jun 2021 | 1:23 pm
MLO Jobs; Secondary Marketing, SaaS, Purchase Tools; Fannie Addresses NOO and 2nd Home Policy
Posted To: Pipeline Press
Fortunately for much of the rest of the United States, lumber prices have been falling since May, hopefully cutting the money required for new construction. Criminals often go to where the money is, and lenders must implement steps to stop wire fraud and to give their client comfort that large sums of money, often their life’s savings, are in good hands. The Securities and Exchange Commission (SEC) announced settled charges against First American Financial Corp. , one of the largest mortgage title and settlement services companies in the U.S., alleging cybersecurity breaches when the company exposed sensitive personal information of its customers and did not follow proper incident response when informing customers about the leak. Be careful out there! ( Today’s audio version of...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 17 Jun 2021 | 8:05 am
MBS Day Ahead: Bonds Building a Case For Resilience
Posted To: MBS Commentary
After Wednesday's Fed-inspired rout, bond yields have done a great job finding support in the 1.56-1.59% area overnight amid high volume trading. All other things being equal, and purely from a technical standpoint, this speaks to a good case for resilience. The 1.56-1.59 area has generally held up as the lower end of 2021's "intermission" range. Yields have moved below that on occasion, but not for long--not until last week anyway. By treating that same area as a sort of ceiling in the overnight session, bonds are telling us there's a chance that it will evolve into a friendly inflection point that offers support in the near term. "Near term" is a cop-out used by analysts and economists when they don't want to commit to too specific a time frame. I could...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 17 Jun 2021 | 7:55 am
Rates Jump After Fed Announcement
Posted To: Mortgage Rate Watch
Mortgage rates were already drifting higher in the first half of the week, but that was nothing compared to today. This afternoon's Fed Announcement was certainly on the radar as a potential source of volatility. Needless to say, it delivered. But how much did it deliver, exactly, and why? There's a fairly prevalent misconception that the Fed sets/changes mortgage rates directly. That's really only true when it comes to something like HELOCs (home equity lines of credit) and even then, the Fed is only changing its policy rate. HELOC lenders then set rates that use the Fed's rate as a baseline. On a somewhat similar note, there's another misconception about changes in the Fed Funds Rate correlating with mortgage rate movement. While that can be true over long time horizons, we don't need to...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 1:42 pm
MBS RECAP: Bonds Blasted By Fed's Salty Dots
Posted To: MBS Commentary
Fed's Salty Dots Rock Bonds As feared/anticipated, today was all about the "dots" (the dot plot that shows Fed members' views of the Fed Funds Rate over time). Even though Powell reminded markets, yet again, to take the dots with a big grain of salt, the sell-off was swift and severe for bonds. Powell's press conference did little to push back against the weakness and bonds moved right back to their worst levels of the day after Powell was done. There's just no other way for the Fed to say they're getting closer to tapering, and no other way for the market to react. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Housing Starts 1.572m vs 1.630m f'cast Building Permits 1.681 vs 1.73m f'cast Import prices 1.1 vs 0.8 f'cast Export prices 2.2 vs 0.8...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 1:18 pm
Differences Between Previous and Current FOMC Statements
Posted To: MBS Commentary
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The Progress on vaccinations has reduced the spread of COVID-19 pandemic is causing tremendous human and economic hardship across in the United States and around the world. States. Amid this progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 11:00 am
MLO, AE Jobs; Servicing, Sales, TPO, VOI Products; Fannie and Agency Shifts Continue: 3 Instead of 7 Percent NOO Cap?
Posted To: Pipeline Press
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Source: Mortgage News Daily | 16 Jun 2021 | 7:31 am
May Housing Starts Post Modest Recovery from April's Slump
Posted To: MND NewsWire
Housing starts recovered in May after falling more than 9 percent in April but permitting had another lackluster month. The U.S. Census Bureau and Department of Housing and Urban Development report that residential units were started at a seasonally adjusted annual rate of 1.572 million, a 3.6 percent improvement on the revised (from 1.569 million) rate of 1.517 million in April. Starts are running 50.3 percent ahead of the rate in May 2020. May's results were slightly lower than expected. Analysts polled by Econoday had a consensus estimate of 1.630 million. The forecasts ranged from 1.500 to 1.735 million. Construction was begun on single-family houses at an annual rate of 1.098 million, a 4.2 percent gain from April's revised rate of 1.054 million and up 49.8 percent year-over-year. The...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 7:22 am
MBS Day Ahead: Fed Day! What's at Stake? (Hypothetical Dot Plot Included)
Posted To: MBS Commentary
There are 8 Fed announcements per year (barring emergencies). Today's announcement is one of the 4 that include updated economic projections (the "dots" are part of that). While the Fed downplays the dots, markets tend to have more volatile reactions. Major policy decisions are definitely on hold for now, so markets will be left to read the tea leaves from minor verbiage changes in the announcement, Powell's press conference, and of course, the dots. The net effect could certainly be relevant, with a move back up toward the previous range (red lines in chart below), or an extension of the recent run toward early 2021's low yields (green lines in the chart). To be clear, today would only be the catalyst for beginning of such moves. There are only 3 hours of trading following...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 6:52 am
Rising Lumber and Material Costs Put a Dent in Builder Confidence
Posted To: MND NewsWire
The latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) dropped 2 points in June. The Index, a measure of home builders' confidence in the market for newly built homes, fell to 81, its lowest reading since last August. There was no change in the Index from April to May. "Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June," said NAHB Chairman Chuck Fowke, himself a custom home builder. "These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building. Policymakers need to focus on supply-chain issues in order to allow the economic recovery to continue." Derived from a monthly survey that NAHB has been conducting...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 5:13 am
How Second Home Sales are Driving Price Gains
Posted To: MND NewsWire
A new report from the National Association of Realtors® (NAR) says that the demand for and sale of vacation homes soared during the pandemic. While that impetus may be winding down, we wonder if we are about to see an example of "push comes to shove" if the demand continues given the new constraints on GSE lending. NAR's 2021Vacation Home Counties Report says vacation home says in 2020 rose by 16.4 percent against growth in existing home sales of 5.6 percent. Vacation home sales made up 5.5 percent of all existing home purchases, up from 5.0 percent in 2019. Most of the increase in activity came in the second half of the year. The boom, however, did not end with the new year. From January to April 2021, the share of vacation home sales to total existing-home sales rose to 6.7 percent and...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 5:10 am
Mortgage Application Volume Rises After Three Straight Losses
Posted To: MND NewsWire
Mortgage application activity bounced back from the Memorial Day holiday week with a seasonally adjusted increase of 4.2 percent in the Mortgage Bankers Association's (MBA's) Market Composite Index. On an unadjusted basis the index rose 15 percent. The prior week's results included an adjustment to account for the holiday. The Refinance Index for the week ended June 11 was up 6 percent from the prior week but was 22 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 61.7 percent of total applications from 60.4 percent the previous week. The seasonally adjusted Purchase Index gained 2 percent and was 11 percent higher on an unadjusted basis. Activity was down 17 percent compared to the same week in 2020. Refi Index vs 30yr Fixed Purchase Index...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 16 Jun 2021 | 5:07 am
Rates Moving Higher Ahead of Fed
Posted To: Mortgage Rate Watch
Mortgage rates had a great week last week, ultimately getting very close to the lowest levels since March. One of the main sources of motivation was the market phenomenon known as a "short squeeze." In not so many words, this means that too many traders were betting on rates moving higher for them to all be right, so the market self-corrected with a quick move back toward lower rates. The problem with short squeezes is that they don't serve as a good foundation for sustained low rate momentum--a tendency that's proving to be true so far this week . In other words, last week's rate-friendly trend has run its course and markets are now gearing up for tomorrow's policy announcement from the Fed. In today's case, that took the form of a moderate move back toward higher rates. While the Fed is not...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 15 Jun 2021 | 1:15 pm
MBS RECAP: Pre-Fed Paralysis Despite Some Interesting Data
Posted To: MBS Commentary
Pre-Fed Paralysis Despite Some Interesting Data Retail Sales down 1.3% and last month revised up to 0.9%? Core Producer Prices rising 0.7% in a single month (versus 0.5% forecasts). How about the eye-watering year-over-year Core PPI number at 4.8%? While there was perhaps a brief reaction to the 8:30am econ data, it was small and--well, brief. Bonds spent the entire day trading almost perfectly flat. We're left to conclude the market has taken its proverbial seat in advance of tomorrow's Fed announcement. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Retail Sales -1.3 vs -0.8 f'cast, +0.9 prev Core Producer Prices y/y 4.8 vs 4.8 f'cast, 4.1 prev NY Fed Manufacturing 17.4 vs 23.0 f'cast, 24.3 prev Builder Confidence 81 vs 83 f'cast, 83 prev NY Fed manufacturing...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 15 Jun 2021 | 1:10 pm
AE Jobs; Sec. Marketing, Training, Processing, Due Diligence, TPO Products
Posted To: Pipeline Press
I was spending a little time yesterday evening at the local cannabis club with my favorite bud-tender (an ombudsman!), and she was telling me about how businesses are seeing a labor shortage, not a job shortage. There are “help wanted” signs everywhere, but service and hospitality businesses are having trouble attracting employees back to work. And the economic rebound is being hamstrung by it. If you want to go to the local diner and spend money on lunch, but they don’t have the staff to be open for lunch, you might opt for the PB&J at home. And that scenario is being carried out everywhere. Want to buy a car, but there are none due to a chip shortage? Want to buy a house but no one is selling? The list goes on. But good LOs are good at adapting to different economic...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 15 Jun 2021 | 8:40 am
MBS Day Ahead: You'll Be Tired of Hearing About the Fed Soon
Posted To: MBS Commentary
On weeks that close out with the big jobs report, an inordinate amount of headlines include a reference to the impending data. The same is true with Fed announcements. Please forgive those of us who stick to this predictable formula. It's born of necessity because these events are almost always 800lb gorillas with some unknown level of aggression. Sometimes they leave peacefully. Sometimes they smash the place up. At any rate, you'll know we've run out of creative ways to make the same point when you see the classic "All Eyes on The Fed." But seriously... all eyes are on the Fed. Eyes may occasionally be on other things too, but Fed's policy course has been a hot topic--and logically so--ever since the economy began doing things it needs to do in order for the Fed...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 15 Jun 2021 | 6:00 am
MBS RECAP: New Week, New Sense of Urgency
Posted To: MBS Commentary
New Week, New Sense of Urgency The new week wasted no time in differentiating itself from the previous week as bonds sold off somewhat briskly this morning. This was a known risk given the motivation for the recent gains. Specifically, short-covering rallies leave themselves open to these little reversals. The bigger question of "where do we go from here" may depend on the incoming data and especially Wednesday afternoon's Fed announcement/forecasts. Despite the early selling pressure, bonds offered some reassurance in the afternoon by holding calmly under 1.50%. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Consumer Sentiment 86.4 vs 84 f'cast 1yr Inflation expectations down 0.6% 5yr Inflation expectations down 0.2% Market Movement Recap 09:22 AM Roughly unchanged overnight...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 14 Jun 2021 | 1:19 pm
Ops, MLO, AE Jobs; Servicing, Dashboard, FHA Pricing, VOA Products; Agency Shifts Continue; Events This Week
Posted To: Pipeline Press
Elaine F. reminded me of a quote from Hemingway: “Never mistake motion for action.” And basketball coach John Wooden said, “Never mistake action for achievement.” The FHFA is certain taking action, and moving toward achieving its goals, although those don’t necessarily match those of many borrowers or lenders. Why every originator should care is spelled out in “The Secondary Market’s Presence in the Primary Markets” . By raising gfees (as lenders saw last Friday) to one borrower at a time, will Freddie Mac and Fannie Mae reach the hundreds of billions of dollars of retained capital that many believe are required to exit conservatorship ? Of course not. And it appears that TPO business (correspondent and wholesale) is being hit much harder than...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 14 Jun 2021 | 7:44 am
MBS Day Ahead: Have Bonds Found Their Pre-Fed Range?
Posted To: MBS Commentary
Last week was relatively impressive and perhaps somewhat surprising in terms of bonds' ability to rally in the absence of overt fundamental motivation. As we discussed, the covert motivation was/is largely one of trading positions (i.e. shorts covering). Speaking of things "we discussed," there's also that post-NFP conversation about rally momentum setting the bond market up for a selling opportunity. If short positions have covered and trading levels are starting the week confirming a bounce at recent low yields, is this the selling opportunity? That may depend on the Fed. We're less worried about what they change in terms of policy and more interested in verbiage changes, dot plots, and the invariable update on whether or not the tapering discussion has evolved. Is it...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: Mortgage News Daily | 14 Jun 2021 | 6:20 am
