The number of properties sold over the past year was the fewest since 2009, the National Association of Realtors said.

The system update planned for July 20 will allow users to have one login to access all their NMLS accounts, among other modernization initiatives.

More Data Defiance. Maybe It’s All About Claims?

Bonds have been trending gently stronger after last week’s CPI numbers, which is notable considering the headwinds presented by Tuesday’s Retail Sales.  Wednesday’s data didn’t suggest a recovery from overnight weakness, but we got one nonetheless–perhaps with some help from Fed speakers adding to the sense of a September rate cut. While the modestly bullish bias has been able to defy the data seen so far, the Fed’s focus on the labor market may mean that Thursday’s Jobless Claims number is a better headliner for the week than Retail Sales.  After all, this is the installment that lines up with survey week for the forthcoming jobs report.  

Econ Data / Events

Housing Starts

1.353m vs 1.330m f’cast

Building Permits

1.446m vs 1.40m f’cast

Industrial Production

0.6 vs 0.3 f’cast, 0.9 prev

Market Movement Recap

09:15 AM Sideways to slightly weaker overnight with no major movement so far.  MBS down 6 ticks (.19) and 10yr up 2.3bps at 4.182.

12:55 PM Gradually moving to best levels of the day with 10yr now unchanged and MBS nearly unchanged.

03:07 PM Slightly deeper into today’s lowest yields with 10yr down 1.2bps at 4.147.  MBS up 1 tick (.03).

Despite an active calendar of events that had the potential to cause volatility, average mortgage rates managed to remain unchanged in the morning and to move slightly lower in the afternoon.  Last Thursday’s inflation data helped 30yr fixed rates drop to 5 month lows and there hasn’t been much movement since then. Technically, today’s rates aren’t quite back to Monday’s levels, but the average borrower would be seeing the same note rate in either case.  The only potential difference would be in terms of upfront costs and even that would be minor. While the economic data so far this week has failed to inspire major rate movement, the forthcoming data still presents some amount uncertainty.  Thursday brings weekly Jobless Claims data.  This typically doesn’t have a big influence, but there’s heightened focus on labor market reports right now because signs of labor market weakness would further tip the scales in favor of a Fed rate cut. The Fed is currently expected to cut rates for the first time this cycle in September.  There’s a very high bar for them to consider a July rate cut–almost certainly too high for any of the scheduled economic data to make a difference between now and then.  Nonetheless, the Fed Funds Rate doesn’t directly dictate day to day changes in other rates.  If the data increases the case for September’s cut or if it strengthens the case for additional cuts after that, we could still see a favorable response in the short term. Conversely, if the data improves, rates could undergo a modest correction as they wait for the next big jobs report in early August.

Is anyone else seeing those sensational, “yellow journalistic” headlines saying that real estate is plummeting? Think again. The American Enterprise Institute’s (AEI) latest housing market analysis echoes what NAR’s numbers show, Case-Shiller’s numbers show, and the FHFA’s numbers show: A notable 6.5 percent national annual appreciation rate, despite the backdrop of high mortgage rates. The Sun Belt states, like Florida and Texas, lead in home price gains. I’ll admit that it is hard to know what to believe, because yesterday we learned that the NAHB Housing Market Index fell again in July to the lowest level since last December. I have also heard that the combination of elevated mortgage rates and high home prices has pushed house builders to lower prices. That latest NAHB survey revealed that 31 percent of builders cut home prices to bolster sales in July, higher than June’s 29 percent. The nation needs more houses built, but there isn’t much incentive for builders to build them, and many borrowers are waiting for lower interest rates before purchasing. Fortunately, the overall housing market is much stronger than in 2008, given the tremendous equity that is out there. (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 Barry Sturner and Richard Horn on the CFPB v. Townstone case.)

Just because an economic calendar is full doesn’t mean it’s of any major importance to the bond market.  Today fits the bill with the two economic headliners being Housing Starts and Industrial Production.  Both have already come and gone without any reaction.  The market has been more interested in trading a single comment from Fed’s Waller, who said the time to cut rates is getting closer based on the most likely policy scenario.  Yes, that’s a bit cryptic, but he basically described 3 bowls of porridge and then said the warm one was the most likely.  Bonds rallied for a moment and then went back to the prevailing trend from the overnight session.

Mortgage application activity staged a moderately strong recovery from the previous holiday-shortened week, although the recovery was attributable solely to the refinance side of the business. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, increased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index was up 30 percent. The Refinance Index surged by 15.0 percent compared to the previous week and was 37 percent higher than the same week one year ago. The refinance share of mortgage activity jumped to 38.8 percent of total applications from 34.9 percent and was the largest since mid-December 2023. [refiappschart] Purchasing on the other hand declined 3.0 percent after seasonal adjustment although it was up 22 percent before it. The Purchase Index was 14 percent lower than during the same week one year ago. [purchaseappschart] “Mortgage rates declined last week, as recent signs of cooling inflation and the increased likelihood of Fed rate cuts later this year pulled them lower. The 30-year fixed rate declined to 6.87 percent, the lowest rate since March 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “ Application activity was up 4 percent, driven by a 15 percent jump in refinances to the highest level since August 2022. While FHA and VA refinance applications accounted for a significant share of the increase, these are likely recently originated loans with even higher than current offered rates. Even with last week’s rate decline, purchase applications continue to lag, down 14 percent compared to last year’s pace.”

Rocket Mortgage relied on a biased appraisal when it denied a borrower’s refinance application in Denver three years ago, the housing agency claims.

Amid a rocky re-election campaign, the president announced the Biden-Harris Housing Plan, calling on Congress to incentivize landlords to cap rents and enable the construction of two million homes.

Further efficiencies could aid servicers, and improved performance may be a reason for lenders to open the credit box, experts at an Urban Institute event said.