Fathom Holdings acquired START Real Estate to expand its first-time homebuyer program, the company announced Thursday.

Noninterest income at the Minneapolis-based company jumped more than 10% during the third quarter, while asset quality improved and expenses held steady. “Our focus is very much on organic growth,” said CEO Gunjan Kedia.

Observers believe the government shutdown and lack of data is keeping mortgage rates in the same narrow range, as investors have issues reading the tea leaves.

The Detroit-based mortgage bank’s announcement trailed competitors’ by over two weeks, but is taking a more aggressive risk-reward stance on the limit.

Components of the index all rose, including the highest reading for sales expectations in the next six months since the start of the year.

Seriously… No One Seems to Know

Today’s most prominent feature was a large, rapid move in Fed Funds Futures and other short-term rate metrics.  Longer term rates benefited as well, but short term rates clearly led the rally. The issue is that there was no obvious catalyst.  Some reports suggested “regional bank fears,” but it’s hard to document that with the timing of market movement. Other considerations may include comments from Fed’s Waller, but those were over 2 hours before the bond rally.  To be sure, regional banks had a terrible day, but there too, the biggest volume and volatility transpired about 2 hours before the move in Fed Funds Futures. Whatever the truest, most nitty-gritty catalyst, we’ll take it! 

Econ Data / Events

NY Fed Manufacturing 

10.7 vs -1.0 f’cast, -8.7 prev

Market Movement Recap

08:59 AM Slightly stronger overnight and limited reaction to Philly Fed.  MBS up 1 tick (.03) and 10yr down 1.3bps at 4.016

09:11 AM Quick reversal after 10s hit 4.0%.  Now up half a bp to 4.034.  MBS down a quick 3 ticks (.09) and just over an eighth from AM highs.

11:43 AM Bouncing back a bit now.  MBS unchanged and 10yr down nearly 1bp at 4.019

01:12 PM Big mystery rally from 12:15 to 12:45.  10yr down 3.8bps at 3.991.  MBS up and eighth.

03:53 PM Near best levels. MBS up 6 ticks (.19) and 10yr down 5.6bps at 3.973

Despite a stark absence of any truly inspiring events, interest rates have managed to put in two fairly serious days of movement. In today’s case specifically, there was an obvious intraday surge in the underlying bond market. While that surge wasn’t readily attributable to any data or news headline, it prompted many mortgage lenders to reissue lower rates in the afternoon. As conventional 30yr fixed rates move down from the 6.3’s toward the 6.1’s, this is a zone that can see larger than normal movement for reasons laid out back in early September (A Quick Note on Why Rates Seem to Drop More Quickly as They Approach Certain Thresholds). We’re beginning to see some of that slippery slope behavior in our rate index over the past few days as 6.125% comes closer to be being a more widespread top-tier rate quote. As ever, the real question is whether we continue heading in that direction or if we’re due a bounce. As ever, there’s no way to know ahead of time.  The level of improvement seen over the past week is already arguably surprising.

“I was gambling in Las Vegas; I took a little risk. Send lawyers, guns, and money, Dad, get me out of this!” Hopefully, no one heading to LV tomorrow or this weekend runs into that kind of trouble. Did you know… The difference between an American roulette wheel and a European wheel? The American version has “00.” Fans of Lucifer, and numerology, know that, for both, the numbers add up to 666! Homeowners in Las Vegas are not typically big gamblers, unless you consider their housing values which, historically, are subject to big swings. Home prices in Southern Nevada have edged slightly lower in the last year, as the number of properties on the market continued to climb, “signaling a cooling but stabilizing housing market.” Las Vegas has its share of commercial buildings… Do the office markets and residential markets correlate? In Chicago, Walgreen’s is closing its Old Post Office location. In New Orleans, two landmark skyscrapers are in default. In New York, a building was just purchased for $25 million for conversion to residential. Nothing is constant but change. (Today’s podcast can be found here and this week’s are sponsored by Floify, an industry-leading point of sale platform. With Floify’s new Dynamic AI feature, lenders can modify applications with no coding required and rely on AI to autofill key application fields, allowing borrowers to fill out only a few fields relevant to their needs. Hear an interview with Floify’s Sydney Barber on how Dynamic AI is built into its POS to automate tasks like document handling and income verification, speeding up approvals, improving compliance, and enhancing the borrower experience while freeing lenders to focus on relationships.)

There were quite a few economic reports that would have been released this morning were it not for the gov shutdown.  OK, well only 3 notable absences, but there would have been a 3 week backlog of jobless claims in addition to typically spicier Retail Sales and PPI data. As it stands, Philly Fed was the only scheduled data released at 8:30am and it had no impact.  Instead, it was a glut of block trades (read all about them here) just after 9am that sent 10yr yields lurching higher.  With that, yields have rejected the 4.0% floor yet again and are now up modestly on the day.  MBS are following suit, down just under an eighth of a point. 

The next chair is likely to be named to a 14-year Fed governor term which opens up in early 2026.