The megabank’s scale hasn’t made it immune from the deposit wars that have crimped bank profits. But the “stabilization” that Wells Fargo flagged is a positive sign as other banks start reporting earnings.

The megabank reported a big increase in credit costs for the third quarter, which included a reserve build of $1 billion.

With two major disasters striking the U.S. within weeks, awareness of insurance challenges many homeowners encounter is coming to the fore, and servicers find themselves caught in the middle.

While people are talking about supply, the former National Association of Realtors exec adds more attention must also be given to home insurance affordability.

Boring Week and Next Week Isn’t Much More Promising

It’s always a bit jarring to go from something like last Friday’s jobs report response to a subsequent week with very little movement, but in the grand scheme of things, it may as well have been a 9 day weekend.  Actually, make that a 10 day weekend with the upcoming Monday being a holiday closure.  Neither PPI nor Consumer Sentiment caused a stir today, but volume suggests traders were willing to react to PPI if it had fallen far from forecasts.  In general, we’ll need big ticket data to say bad things about the economy in order to recover any decent amount of what was recently lost.  To that end, we’re waiting all the way until next Thursday morning for the next round of reasonably relevant reports. 

Econ Data / Events

M/M Core PPI

0.2 vs 0.2 f’cast, 0.3 prev

Y/Y Core PPI

2.8 vs 2.7 f’cast, 2.4 prev

Consumer Sentiment

68.9 vs 79.8 f’cast, 70.1 prev

1yr inflation expectations

2.9 vs 2.7 prev

5yr inflation expectations

3.0 vs 3.1 prev

Market Movement Recap

08:59 AM slightly weaker overnight with some additional losses after data.  MBS down an eighth and 10yr up 3.7bps at 4.098

01:09 PM Back near unchanged in MBS, best levels of the day.  10yr up only 1.1bps at 4.072

03:51 PM Not far from previous update.  MBS down 2 ticks (.06) and 10yr up 1.8bps at 4.079

While this week’s rates were substantially higher than most of last week’s, if we remove a few flashes of volatility,  the average lender stayed very close to Monday morning’s levels.  Wednesday afternoon and Thursday mid-day definitely saw multiple negative reprices, but in each case, the bond market recovered enough to limit the volatility.  Compared to last week, it may as well have been a flat line. The following chart shows the mortgage backed securities (MBS) prices that directly dictate mortgage rate movement.  Higher prices = lower rates and vice versa. Today’s economic data included a wholesale inflation report that has occasionally caused some volatility, but today’s installment was not one of them.  The bond market improved a bit heading into the afternoon and traded calmly from there.  As such, mortgage lenders were not compelled to make any negative mid-day changes after setting this morning’s rates very close to yesterday’s latest levels.  The next time lenders have a chance to set mortgage rates for the day will be Tuesday due to the market closure on Monday for Indigenous Peoples’ Day.  

Preparing for the next hurricane in Florida? Or Louisiana? Or Texas? Call this really smart or really humorous, it’s up to you. (And no, I don’t know how it fared.) We do, however, know how lenders and vendors are faring. Sure, headlines blared that rates were going down, but as we all know they went up after the Fed’s 50 basis point cut a few weeks ago, and locks have not shot up much, if at all. Looking at September, according to Curinos’ new proprietary application index, refinances increased 62% in September; the purchase index increased 21% for September as a whole. September 2024 funded mortgage volume increased 21% YoY and decreased 3% MoM. The average 30-year conforming retail funded rate in September 2024 was 6.45, 30bps lower than August 2024 and 53bps lower than the same month last year. Purchase rates were 33bps lower MoM and 67bps lower YoY, while Refinance rates were 29bps lower MoM and 48bps lower YoY. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (Today’s podcast is found here and this week’s is sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries. Hear an interview with Figure’s Michael Tannenbaum on how borrowers are paying down debt and the ways in which his company is utilizing OpenAI GPT.)

When it comes to economic data with any real significance, today only offered two reports: PPI and Consumer Sentiment.  Neither have an especially stunning pedigree of market movement capability although both have inspired a decent amount of volatility on many occasions.  Today is not one of those occasions.  Both have come and gone.  Bonds remain right in line with opening levels.  With that, the week is essentially over and bonds are free to maintain their sideways-to-slightly-weaker drift as traders wait for data that actually makes a case for rates to move back down.

PBB earlier this year became one of the most prominent examples of European banks hit hard by fears that troubles in U.S. property markets are spreading.

Likely homeowners have two focuses when deciding on the gadgets they factor into property purchase decisions, according to the National Association of Home Builders.