Efficiencies drive greater mortgage interest in careful use of artificial intelligence for marketing and research compared to others in financial services.

Uneventful Monday Leaves Bonds Little Changed

It was a quintessential summertime Monday to start the new week.  Trading volumes were exceptionally light and volatility wasn’t far behind.  Most of the movement happened right at the 8:20am CME open with Treasuries quickly repairing some incidental overnight damage.  The 9:30am NYSE open saw a quick pop and drop, but from there, it was super sideways for Treasuries and especially MBS.  Both ended the day in effectively unchanged territory vs Friday.  Uneventful days become less likely from here on out due to Treasury auctions, Powell Testimony, but most importantly, Thursday’s CPI data.

Market Movement Recap

08:48 AM Initially weaker overnight, but bouncing back in early domestic trading.  MBS up 2 ticks (.06) and 10yr down 0.4bps at 4.277

11:58 AM Off the best levels slightly.  MBS now unchanged and 10yr up half a bp at 4.287

03:27 PM Very sideways with MBS up 1 tick (0.03) and 10yr down almost 1bp at 4.273

Apart from July 1st, mortgage rates have fallen every day so far this month.  The counterpoint is that only adds up to 4 business days so far.  The other counterpoint is that the improvements have been fairly modest over the past two days with the average borrower still likely to be quoted the same interest rate seen on Friday.  The average top tier conventional 30yr fixed rate remains just a hair over 7%.  If that’s to change in a meaningful way, it would likely involve this Thursday’s Consumer Price Index (CPI) data.  CPI has been the most important input for rates as far as economic reports are concerned.  Thursday’s is an exciting installment as it has a chance to confirm a promising shift seen in last month’s data. If confirmed, rates should move easily into the 6’s. Between now and then, there are other potential sources of volatility, including 2 days of Congressional testimony from Fed Chair Powell.  But CPI is ultimately a much bigger consideration than anything Powell might say.

During a recent password audit, it was found that a blonde was using the following password: “MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento”. When asked why such a long password, she said she was told that it had to be at least 8 characters long and include at least one capital. What’s today? It’s “change every password you have” day. Money is the focus of a lot of evil activity on the internet (look at credit union Patelco), but what about useful, constructive monetary activities? Location, location, location. What new home buyers get for their money varies by region. The median price and square footage of new single-family homes sold in 2023, according to the Census Bureau, was $760,700 and 2,430 square feet in the Northeast, $396,300 and 2,172 square feet in the Midwest, $388,800 and 2,335 square feet in the South, and $536,200 and 2,170 square feet in the West. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Candor’s Mark Hinshaw on expectation versus reality when it comes to AI in the mortgage industry.) Lender and Broker Software, Services, and Products With high interest rates keeping more people in their homes, new revenue opportunities will come from places that don’t fit the typical servicer playbook. ICE has identified four key areas where technology can help set servicers up for success in today’s low-movement housing market. Explore how you can retain customers, capitalize on your existing portfolio, and streamline your back office in ICE’s complimentary new white paper, Technology helps servicers find opportunities in unusual places.

Bonds are finding their range in a perfectly inoffensive way to begin the new week.  That’s a victory considering a bit of weakness is never a surprise at the start of Treasury auction weeks, but then again, current trading levels represent a modest amount of weakness versus the recent yield lows in late June.  The overnight session was indeed slightly weaker, but domestic traders quickly got things back to “unchanged” after the 8:20am CME open.  There are no big ticket economic reports on tap.  Apart from Fed Chair Powell’s semi-annual congressional testimony (Tue/Wed), there’s not much to do except wait for Thursday’s CPI.

The bank acquired these business purpose non-qualified mortgage loans originated by Civic Financial Services in the PacWest Bancorp deal.

June housing market data from Redfin found home prices hit a new all-time high. Fortunately, monthly mortgage payments decreased and new listings were up 10%.

Ongoing challenges from limited inventory levels and elevated prices likely spells little lending momentum this summer, Mortgage Capital Trading said in its latest report.

The central bank also noted that the banking system is sound but faces several challenges. The report precedes Federal Reserve Chair Jerome Powell’s upcoming appearances on Capitol Hill.

The overall Bureau of Labor Statistics number was a tad higher than expected but other indicators point to economic weakness that could lower mortgage rates.