Company executives touted the immediate returns from its rebranding and Super Bowl advertising campaign, with February activity exceeding expectations.

Ryan Donovan, the Council of Federal Home Loan Banks’ CEO, foresees affordable housing mandates becoming more focused on home supply than demand.

Pending sales of existing US homes slumped to a record low in January as severe winter weather slowed activity and consumers balked at high prices and mortgage rates ahead of the vital spring selling season.

The grandson of the PulteGroup founder did not elaborate on plans for a much-anticipated government-sponsored enterprise exit from conservatorship.

Any rollback in property taxes would require enough signatures to place a question on the ballot and pass with at least 60% of support from Florida voters.

Trying to Shake Off Overnight Weakness After Mixed Bag of Data

Bonds came into the domestic session at slightly weaker levels after losing ground gradually in the overnight session. They morning’s economic data was basically a wash.  Durable goods came in hot, but the report has been volatile surrounding fiscal policy implementation. Quarterly PCE was revised up, but that’s stale data (Q4, 2024). On the rate-friendly side, Jobless Claims were much higher than forecast, but still not out of line with trend levels from the past few years. Tomorrow’s monthly PCE data should be less prone to “yeah buts.” That said, keep in mind that some of the positive reaction potential has already been traded after the PPI data 2 weeks ago.  In other words, core PCE might need to be lower than expected to see a rate-friendly reaction (as opposed to merely hitting the 0.3% month-over-month forecast).

Econ Data / Events

GDP 

2.3 vs 2.3 f’cast
PCE Price Index revised up 0.2

Jobless Claims

242k vs 221k f’cast, 220k prev

Durable Goods

3.1 vs 2.0 f’cast, -1.8 prev

Core Durable Goods

0.8 vs 0.2 f’cast, 0.2 prev

Market Movement Recap

09:03 AM Slightly weaker before data, and mostly choppy/sideways after that.  MBS down roughly an eighth of a point and 10yr up 2.9bps at 4.288

02:54 PM Broadly sideways after a modest recovery.  MBS down 1 tick (.03) and 10yr up 2.5bps at 4.285

04:11 PM MBS down 2 ticks (.06) and 10yr up 1.4bps at 4.272

Stop the presses! Mortgage rates actually moved HIGHER today! While it’s the first time we’ve been able to say such things since last Tuesday, the damage is almost imperceptible.  In fact, if we compare today’s rates to yesterday morning’s they’re identical to slightly lower.  Today’s rates are only worse when compared to the slightly lower rates seen after yesterday’s mid-day improvements.  In general, lenders prefer to set mortgage rates once per day and hope the underlying bond market doesn’t move enough to force a mid day reprice (a positive or negative adjustment). The bigger the bond market move, the more lenders will be inclined to reprice.  Today’s movements weren’t big enough for reprices, so the morning mortgage rate offerings stayed in effect throughout the day. Bonds were only modestly weaker, thus the minimal change in rates.  Bottom line, for all practical purposes, today’s rates are still the lowest since early December. Tomorrow brings this week’s best and final chance to see some volatility, for better or worse. The PCE Price Index for January will be released at 8:30am ET. This is the most important economic report of the week and one that began having an impact on rates 2 weeks ago when traders gleaned clues from other inflation reports that suggested PCE would look better than its more timely counterparts. If that was confusing, here’s a breakdown: CPI and PPI are the two other inflation indices that come out 2 weeks before PCE.  They’re more timely, but not as robust in terms of the data covered.  They also have a bearing on PCE if you know which details to include and ignore. When traders did that math, they concluded that PCE would paint a slightly better picture for inflation.  Because of that, rates were able to move lower on a week with higher inflation numbers.

The National Association of Realtors released its Pending Home Sales Index (PHSI) today, which measures home purchase contracts that have been signed, but not yet closed. The index typically correlates with existing home sales in the following month. While January’s contract signings were only down 4.6% versus December, that was enough for the index to inch down to the lowest levels since data-keeping began in 2001. “It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months,” said NAR Chief Economist Lawrence Yun. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.” To be sure, mortgage rates hit their highest recent levels in January but fell short of the levels seen in early 2024. At the time, Pending sales had fallen nearly as low as today’s report, thus adding some evidence for the negative impact from higher rates. [thirtyyearmortgagerates] The following bullet points show how each region changed from the previous month (and from the previous year).
Northeast

+0.3 (-0.5)

Midwest

-2.0 (-2.7)

South

-9.2 (-8.8)

West 

-1.2 (-4.5)

As of yesterday afternoon, bonds could seemingly do no wrong this week.  Every opportunity for traders to circle the wagons and push back against the persistent rally was instead met with more rallying.  Now today, we’re finally seeing the first somewhat legitimate selling pressure since the middle of last week (emphasis on “somewhat”). AM data created some indecision due to a combination of weaker jobless claims and stronger Durable Goods/PCE (notably, the PCE data was a revision to stale Q4 data, so taken with a grain of salt). 10yr yields have been fairly sideways since the data, but MBS have gradually improved.

AI is definitely a discussion topic among lenders: what is it, will it help the borrower, will it help the lender… How would you like every hand motion you make monitored by your boss through AI? Well, welcome to the new world order. SIFMA has created this 10-step guide to help streamline “gen AI” implementation, without compromising safety or compliance. In other artificial intelligence news, thousands of artists are calling for an AI art auction to be cancelled, calling it “mass theft.” In a combination of technology and housing, we have “foldable and shippable” houses, Last fall, Boxabl co-founder Galiano Tiramani shared his frustration of regulations and code setbacks that kept its homes from reaching the masses. Kicking off 2025 at a different pace, this year has brought some good news to Boxabl as it have gained official approval of their flagship product, the Casita, under the residential building code in Nevada, where the company’s three factories operate. Hey, if the Agencies will lend on them, why not? (Today’s podcast can be found here and this week’s is sponsored by Sagent. Sagent brings the modern experience customers now expect from loan originations to loan servicing, where lifetime customer relationships are managed and grown. Hear an interview with HomeLight’s Nick Friedman on findings from a survey of originators about borrower preferences and technology adoption.) Lender and Broker Products and Services Have you ever wanted to be in the room where servicing innovation comes to life? It’s all happening at ICE Experience 2025. Servicers joining ICE’s mortgage technology experts at the Wynn Las Vegas from March 10-12 will get a front-row seat as they explore how ICE is making servicing simple. ICE Experience includes demos of ICE’s latest, cutting-edge innovations and a variety of sessions where you’ll learn how ICE is creating efficiencies to support HELOCs, loan boarding, customer retention, loss mitigation and more. Review the ICE Experience agenda and make sure to add sessions to your calendar so you don’t miss out on one of the biggest mortgage industry conferences of the year.