Mortgage Rates Mostly Maintain Wednesday’s Strength

Yesterday was notable for being the first day in more than a week to offer any excitement for rates.  More notably, that excitement was the good kind.  The average lender moved back under 7.00% for top tier conventional 30yr fixed rates for the first time since December 17th, even if only by a scant 0.01%.   Today’s rates are effectively right in line with that, but officially 0.01% higher, and not for any interesting reasons.  The only major economic data consisted of weekly Jobless Claims–not to be confused with tomorrow’s immensely more important jobs report–coming in fairly close to forecasts. Tomorrow’s jobs report will be released at 8:30am ET, which is well before mortgage lenders update their rate offerings for the day.  As such, rates could once again see more meaningful movement as they did on Wednesday.  As always, major economic data doesn’t carry any connotation as to the direction of the impending movement.  Markets have already adjusted for their best guess on the results.  If the report is much stronger, rates would likely jump.  If it’s much weaker, rates would likely move back below 7%.

MSR, Servicing, Customer Retention, Equity Tools; Non-Agency News

“Nothing says, ‘I mean business’ than using a shopping cart at the liquor store.” We’re already 10 percent through with 2025, and residential lenders and vendors don’t know whether “meaning business” is spending their time watching Washington DC or trying to help their borrowers. Or both. Trump fired CFPB head Rohit Chopra and appointed Treasury Secretary Scott Bessent as Interim Head. Certainly there is this school of thought: Consumer ‘watchdog’ hounded US businesses, let’s shut it down. Bessent’s first action was to suspend everything the CFPB is doing. The agency suspended the effective dates for all rules that have yet to go into effect, pause all litigation (they are only allowed to file for continuances), and stop rule-making. They also were told to cease public comment. Meanwhile, yesterday it seemed like every trade group congratulated Scott Turner on his confirmation to serve as HUD Secretary. Ginnie Mae, for example, into which most FHA and VA loans are placed, is a government-owned corporation of the United States Federal Government within the Department of Housing and Urban Development. (Today’s podcast can be found here and this week’s is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Hear an interview with Experian’s Joy Mina and David Fay on reducing pipeline fallout and improving loan pull-through rate.)

Consolidation Ahead of Jobs Report (Which Still Matters)

Coming off yesterday’s solid rally, the bond market underwent a modest correction in the overnight session.  Most of the gains remain intact, but the bounce makes a case for a short term yield floor at 4.415–a level that saw multiple bounces yesterday and another one just this morning after the jobless claims data.  With no other big ticket data on tap, it wouldn’t be a surprise for bonds to opt for “consolidation” ahead of tomorrow’s big jobs report.  On that note, keep in mind that despite the recent shift in focus in favor of inflation data, that the jobs report still matters and will always be a big ticket market mover for bonds.  The increased focus on CPI simply means that it is once again competing in roughly the same league as NFP as opposed to being a competent understudy.