I was recently on a hike with a gal pal, and we were talking about her future. I asked, “You don’t have any kids. Who is going to take care of you when you get older?” She replied, “The sommelier.” The future should be on everyone’s minds. I met up with a friend last week at the MBA Annual, and, knowing that his son had worked summer jobs for a lender in our business, I asked him about his son entering the residential lending. He replied, “He was all set to become a loan officer assistant but then went to work for ICE due to its $50,000 signing bonus program.” Paying off a student loan should matter to recent college grads, and certainly impacts buying a home down the road. I hear plenty of rumors about student debt. It turns out that, among those who ever incurred debt for their education, 8 percent were behind on their payments at the time of the 2024 survey, and 33 percent had outstanding debt and were current on their payments. Fifty-nine percent had completely paid off their loans. (Today’s podcast can be found here and this week’s are sponsored by Optimal Blue, the only end-to-end capital markets platform built to power performance, precision, and profitability, helping lenders of all sizes operate more efficiently, manage risk more effectively, and maximize results. Today’s has an interview with Rob Chrisman on takeaways from MBA Annual, the mood of the industry, and what to look forward to as conference season winds down.) Services, Products, Software, and Tools for Lenders and Brokers

Mortgage rates fell to the lowest levels in a month last Tuesday and barely budged through the rest of the week. Now, at the start of the new week, the average lender is perfectly unchanged from last Friday. This means there are only a small handful of days with meaningfully lower rates going all the way back to late 2022. As the government shutdown continues, the bond market (which dictates rates) continues missing out on the bulk of relevant economic reports that normally help guide momentum throughout the month.  Depending on the day, however, there can be other sources of inspiration. In today’s case, the bond market took some solace from a well-received auction of US Treasuries. When it comes to auctions, when demand is stronger than expected, it can put some downward pressure on rates. This happened today, and it prompted a small handful of lenders to issue mid-day improvements, but it wasn’t enough to change the average rate.

The Arkansas-based company spent nearly four years on the M&A sidelines, grappling with asset quality issues and litigation tied to its 2022 acquisition of Texas-based Happy State Bank. Now it’s signed a letter of intent to buy an unnamed bank.

James is contesting charges brought earlier this month by a prosecutor whom President Donald Trump abruptly installed after her predecessor resigned under pressure.

The mortgage unit of Hilltop Holdings lost $7.2 million pretax in the third quarter with lower volume, following making a small profit three months prior.

The company cited efforts to improve profitability behind its decision, with Popular joining a line of other banks in ending mortgage operations in 2025.

The Federal Reserve Friday issued a set of proposed changes to its stress testing program for the largest banks that would disclose the central bank’s back-end stress testing models, a move that the Fed had long opposed out of fear of making the tests easier for banks to pass.

FHA loans accounted for about half of the annual rise in foreclosure starts and 80% of the rise in active foreclosures in September, according to ICE.

This morning brought the release of the much-anticipated Consumer Price Index (CPI). This is one of the two biggest inflation reports from the U.S. government, and the only government inflation report that’s coming out during the shutdown.  With big government data being a key consideration for interest rates, this special release got extra attention. Core monthly inflation was lower than expected (.227% vs 0.3 forecast) as was the annual level at 3.0% versus a median forecast of 3.1%. Inflation is the nemesis of interest rates, so the lower-than-expected result is rate-friendly at face value. The underlying bond market agreed to some extent.  The first reaction was stronger, thus implying lower mortgage rates. But mortgage lenders don’t tend to publish rates for the day until around 10am ET, 90 minutes after CPI came out.  In that time, bonds had second thoughts about how strong their reaction would be–possibly due to internal components of the data that suggested non-tariff-related inflation remains elevated outside after removing the impact from housing payments. Bonds remained in just barely stronger territory, but didn’t quite make it back to yesterday morning’s levels. As such, most mortgage lenders were just a hair higher in rate compared to yesterday–a completely logical outcome based on how bonds were trading. The best way to view today’s rate move (or lack thereof) in the context of the inflation data is to say that rates would have been more noticeably higher in the absence of CPI.

Decent Recovery After AM Backtracking

CPI data was a mixed bag for bonds.  Top-line numbers fueled a quick rally and digestion of the details brought us back to negative territory (albeit with help from stronger S&P PMI data). Bonds found their footing shortly after 10am at just slightly stronger levels and then stayed mostly sideways through the close.  Pretty ho-hum CPI day given all the anticipation…

Econ Data / Events

m/m CORE CPI (Sep)

0.227% vs 0.3% f’cast, 0.3% prev

m/m Headline CPI (Sep)

0.3% vs 0.4% f’cast, 0.4% prev

y/y CORE CPI (Sep)

3.0% vs 3.1% f’cast, 3.1% prev

y/y Headline CPI (Sep)

3.0% vs 3.1% f’cast, 2.9% prev

m/m SUPERCORE

.351 vs .330 prev

Market Movement Recap

09:51 AM Initially stronger after CPI data, but now turning red after PMI data.  MBS unchanged and 10yr up 1.2bps at 4.013

01:51 PM Crawling back into positive territory.  MBS up an eighth and 10yr down 1.2bps at 3.99

04:40 PM Heading out at just slightly stronger levels with MBS up an eight and 10yr yields down half a bp at 3.997