The income needed to afford a typical apartment is the highest since 2022.

No Major Data, No Major Movement

It was a snoozer of a day for bonds with yields and MBS prices holding well inside last Friday’s ranges for the entirety.  An “inside day” isn’t much of a surprise when the calendar is completely empty in terms of major economic data.  In fact, it was devoid of all manner of economic data.  That left only a few Fed speeches and as is the recent norm, Fed speakers are all saying the same things (thus, no surprises for bonds). At the 3pm close, both Treasuries and MBS were perfectly unchanged. 

Market Movement Recap

09:59 AM Modestly weaker overnight but bouncing back to unchanged.  MBS unchanged and 10yr up 0.3bps at 4.256.

11:12 AM Treasuries slightly weaker with 10yr up 1.1bps at 4.264.  MBS up 1 tick (.03).

03:03 PM MBS and Treasuries both perfectly unchanged.  10yr at 4.253

Most mortgage lenders offer mortgage rates in increments of 0.125% (i.e. 6.875, 7.0, 7.125, 7.25, etc.).  As such, a particularly notable day of mortgage rate movement is one in which we see close to a 0.125% change.  After all, that’s what it would take for the average borrower to see a significant change in the prevailing rate quote. This doesn’t mean smaller moves don’t hurt, only that they tend to impact implications for upfront costs rather than the quoted rate itself.  Specifically, last Monday, when rates jumped from 6.99% to 7.04%, the average borrower would be quoted a rate of 7.00% in both cases, but on the 7.04% day, closing costs would have been higher, all other things being equal.  With all of the above in mind, ever since last Monday, the average top tier conventional 30yr fixed rate hasn’t moved mover than 0.02% on any single day and for the past 3 days, not more than 0.01%.  That’s a staggering level of “sideways-ness.”  It hasn’t been for a lack of potential motivations either.  During that time, several economic reports were released that have managed to cause much bigger reactions in the past.  If they didn’t this time, it’s because the market is eagerly waiting for confirmation (or lack thereof) that the most recent round of inflation data is signaling a shift that allows rates to continue moving lower.   That data only comes out every so often, and only once a month in the case of the most important inflation report: the consumer price index (CPI).  We’re still several weeks away from that one, but some of the other data is up to the task of causing some volatility between now and then.  The only catch is that almost all of it arrives next week.

“I saved a bunch of money on my car insurance by… switching to reverse and leaving the scene.” The word on the street is that Guaranteed Rate is changing its name to “Rate,” but of greater concern to lenders is insurance. Homeowner’s insurance costs are no joke, nor are insurance companies stopping business entirely in states and counties. If you have a current homeowner whose bill just went up by $500 per month, know that this is $500 a month that won’t be spent in the general economy buying meals, going to movies, going on vacation… Not only that, but LOs and AEs and capital markets staffs do their darndest to get the best rates for their clients, and saving $50 or $100 a month are a victory, only to have the deal blown out of the water by monthly insurance costs. Insurance, of course, is a state-level issue; certainly, the CFPB does not oversee it. Some state groups are doing something about it. For example, the California MBA would like to point to real-life examples of the consequences across California: Here is a link to a fillable form to enter any helpful information or examples.) Today’s podcast is found here and this week’s is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a warranty, eliminating repurchase worries. Hear an interview with Move Concierge’s Sajag Patel and Gabe Abshire on the home services set up industry. Software, Products, and Services for Lenders and Brokers

With last Friday’s range in 10yr yields of roughly 4.22 to 4.27, there was narrow window for today being an “inside day” (i.e. when the previous sessions highs were higher and lows were lower).  And with Friday afternoon’s range being 4.25-4.27, there was an even narrower window to be able to refer to today as “sideways.” Bonds were clearing both windows for the first few hours, but are thinking about expanding the intraday range after 10am (on the happy side).

The move allows Freddie Mac to start purchasing certain second lien mortgages, but establishes limits on how much volume it can do.

The nation’s leading brokerages have agreed to rule changes and settlements with consumers totalling over $900 million.

Michael Saleh, former senior vice president at Rocket, opened up Zoom Home Lending in early June.

The inclusion of policy addressing potential bias or discrimination in AVM models drew both support and criticism, with some stakeholders calling for the creation of an independent nonprofit to help ensure compliance.

The increase in total home sales will be slower than prior projections and that should lead to less growth in purchase originations, Fannie Mae’s June forecast said.