Mortgage rates are based on bonds and bonds take their most important cues from big ticket economic reports. But such reports have been in short supply so far this week. Instead, the market has been left to focus mainly on speeches from various Federal Reserve officials. Fed speeches can certainly have an impact, but it depends on the specifics. Today’s most important comments came from Fed Chair Powell, but they didn’t represent any major departure from his press conference following last week’s Fed announcement. Still, some traders were relieved that he didn’t use the opportunity to reiterate several of last week’s topics that pushed rates higher. Today’s Powell appearance helped the underlying bond market, but mortgage rates were still getting caught up with yesterday’s market movement. The net effect is an average 30yr fixed mortgage rate that moved just a hair higher from yesterday, but it’s just as fair to say rates have been broadly unchanged since last Thursday.

At recent conferences I’ve attended, including here in Atlanta at the Loan Vision Innovation Conference, talk of federal government partisanship, posturing, and shutdowns has crept into discussions. Lenders would definitely be impacted, and this month’s STRATMOR piece is titled, “No Lender Wants a Government Shutdown, but Just in Case…”. Accurately measuring and monitoring business and trends is always a focus, and interestingly, the number of foreign buyers buying homes in the U.S. has risen. Speaking of which, in the real estate world, brokerage giant Compass is set to become the largest residential real estate firm in the world after announcing a deal to acquire major rival Anywhere for $1.6 billion. Compass, which also operates Christie’s, will take control of Anywhere’s subsidiary brands, including Century 21, Sotheby’s, and Coldwell Banker. The all-stock deal values the combined companies at roughly $10 billion and will create what is by far the largest residential real estate brokerage in the world. One industry vet wrote to me saying, “If one company owned 67 percent of all the fuel oil in the U.S., or a bank controlled 67 percent of all deposits, I’m guessing the DOJ might ask questions, right?” (Today’s podcast can be found here and this week’s podcasts are sponsored by BeSmartee, the most innovative mortgage technology platform for banks, credit unions, and non-bank mortgage lenders. Hear an interview with FutureWave Finance’s Steve Thomas on the capital markets landscape, focusing on mortgage rate dynamics, policy transmission, shifting market share between CFIs and non-banks, and the impact of demographic trends amid a pause in product innovation.)

Fed Chair Powell speaks today at a chamber of commerce luncheon in Providence. While the venue may not possess the gravitas of last week’s press conference, any opportunity for Q&A with the Fed Chair is an opportunity for markets to evolve their understanding of Powell’s playbook. Past examples of such a Q&A sessions in the week following a Fed press conference with a clearly hawkish bias have tended to see Powell push back toward a more balanced takeaway. On rarer occasions, he’s doubled down on the hawk talk. With S&P PMI data failing to inspire, Powell’s Q&A (beginning at 12:35pm ET) is the day’s biggest potential source of volatility.
Bonds are broadly consolidating after last week’s sell-off with 10yr yields asymptotically finding support in the 4.15-4.19 range, which has been a stark dividing line between strength and weakness since last summer.

The move will lead the New Jersey-based bank to eliminate over 100 employees, primarily within its mortgage lending operations, according to a state filing.

The bipartisan bill, previously brought up in Congress’ lame duck session, got the Mortgage Bankers Association and Broker Action Coalition’s support.

Shares of the online mortgage company known as Better rose, triggering multiple halts for volatility. They’ve gained more than 450% so far this year.

In the mortgage business, Rate has the biggest upside in the Compass-Anywhere M&A as it has joint ventures with both Guaranteed Rate Affinity and Originpoint.

There were 35.2% more sellers than buyers in the market last month. June and July were the only routine months since at least 2013 with a greater percentage.

Slow Burn With Little to Blame

Bonds started out sideways and lost a minimal amount of ground very gradually throughout the day. While there were multiple Fed speakers on tap, none of the comments garnered any clear reaction. In terms of timing, the losses only really line up with the start of the 9:30am NYSE open–something that can sometimes create tradeflow dynamics that impact bonds–especially when we’re only talking about the sort of modest move seen today.

Market Movement Recap

10:49 AM Slightly weaker after opening flat.  UMBS down 3 ticks (.09) and 10yr up 1bp at 4.136

02:46 PM 10yr yields are up almost 2bps at 4.415 and MBS are down 6 ticks (.19) on the day

Many participants promoted AI-backed products aimed at promoting engagement and retention of existing customers, with features from deepfakes to voice agents.