Year-over-year consumer dollars for home remodeling projects should drop 0.5% by 2Q25, after a 3% decline for the trailing 12 months, said the Joint Center for Housing Studies of Harvard University.

The Dallas-based company, whose earnings per share fell short of consensus by 6 cents, lowered its revenue forecast and raised its expense outlook. Its stock price fell more than 8% on Thursday.

Gow’s addition is the latest major leadership development at the firm, which also named a new chairman and CEO this year but saw the recent departure of its chief technology officer.

Morning Volatility, Afternoon Drift

Bonds began the day in modestly weaker territory before undergoing a bit of volatility after the morning economic data.  The two reports in question were Jobless Claims, which voted in favor of lower yields, and the Philly Fed Index, which made the opposite case. Bonds wend both ways before the bulls ultimately took control and got yields back to unchanged levels just before 11am.  After that, it was a slow grind to the weakest levels of the day, but all of the above played out in a range that was just as narrow as the last few days.

Econ Data / Events

Jobless Claims

243k vs 230k f’cast, 223k f’cast

Continued Claims

1867k vs 1860k f’cast, 1847k prev

Philly Fed Index

13.9 vs 2.9 f’cast, 1.3 prev

Philly Fed Prices Paid

19.8 vs 22.5 prev

Market Movement Recap

08:53 AM Initial gains after Jobless Claims data, but pulling back a bit now.  10yr up over 2bps at 4.18+.  MBS down 3 ticks (0.09)

11:05 AM Back into positive territory in MBS, up 1 tick (.03).  10yr still up 1.2bps at 4.17, but well off the highs.

02:43 PM slightly weaker over the past few hours.  MBS down 2 ticks (.06) and 10yr up 2.3bps at 4.18

04:39 PM heading out at the weakest levels.  MBS down 6 ticks (.19) and 10yr up 4.4bps at 4.201

Thursday’s mark the release of Freddie Mac’s weekly mortgage rate survey.  It’s the longest running and most widely cited measure of mortgage rates, but it’s not always the most accurate when it comes to tracking day to day changes. In today’s case, the survey showed a sharp drop from 6.89 to 6.77.  In actuality, the drop was a bit bigger than that, but it happened last week following Thursday’s Consumer Price Index (CPI).  Today’s rates are almost perfectly unchanged since the end of last week. At issue is Freddie’s methodology which reports a trailing 5 day average of rates each Thursday.  That means that neither Thursday nor Friday’s sharply lower rates made it into the calculation last week.  Instead, they’re in today’s number, and today’s mortgage rates won’t be counted until next Thursday.  Thanks to the extremely flat trend in rates so far this week, we can agree with Freddie that rates are currently near 6.8% for top tier conventional 30yr fixed scenarios and that these rates are the lowest seen in many months. [thirtyyearmortgagerates]

Today’s Jobless Claims report is for the week ending July 13th.  This is important because the establishment survey for the big jobs report (nonfarm payrolls) is conducted on the week that includes the 12th of the month.  In other words, if claims were elevated last week, the implications would more readily transfer to NFP.  Claims were elevated, coming in at 243k vs 230k forecast.  Normally, the strength in today’s Philly Fed Index would have offset the higher claims number, but extra relevance (as described above) helped the claims data punch above its weight.
The net effect is that bonds managed to push back against overnight weakness, despite some 2-way volatility immediately following the data.

It’s not just Americans who can’t afford U.S. homes. International purchases of U.S. homes over the past year declined 36 percent to 54,300 properties ($42 billion), hitting a record low as foreign buyers balked at the dollar’s strength and a lack of available properties with owners continuing to cling to pandemic-era cheap mortgages. If those buyers are looking for somewhere affordable, maybe they should look at Detroit (MI), which has the most affordable housing as determined by median house price divided by median annual household income. The city is 10.4 times cheaper than in Santa Barbara (CA), the city with the least affordable housing. Or if they’d prefer to rent until rates drop, Flint (MI) has the highest rent-to-price ratio, which is 14.2 times higher than in Santa Monica (CA), the city with the lowest. By the time they are ready to submit a mortgage application, many in our industry are hoping that Senate Amendment 2358 (which includes the Homebuyers Privacy Protection Act of 2024) passes, curtailing the practice of firms seeking to confuse mortgage applicants by inundating them with phone calls, texts, or direct mail solicitations. Aka “trigger leads.” More on that below. (Today’s podcast is found here and is sponsored by Calque. Calque provides a binding backup offer on a borrower’s departing residence, which empowers lenders to provide a bridge-like experience with easier qualification and less risk. Today’s episode features an interview with Blue Sage’s Carmine Cacciavillani on building software platforms for the mortgage industry.)

For at least the fifth consecutive quarter, the Providence, Rhode Island, company increased its allowance for credit losses on general office loans, which continue to be a problem area for banks.

Acting Comptroller of the Currency Michael Hsu said the OCC will review its 2020 interpretation of preemption under the Dodd-Frank Act and explore more direct engagement, tailored federal regulation and supervision of nonbank fintechs.

The proposal would add reforms aimed at broadly prioritizing owner-occupant access and end the “test” or “demonstration” mode these sales have been in since 2002.