The news on mortgage rates has been frustratingly mixed recently, depending on the source. This is a factor of the various time frames and methodologies employed by different purveyors of rate data. If you’re reading this, however, none of that matters because the following is as timely as it gets: the average mortgage lender is now at the lowest level since April 7th. Improvements versus yesterday vary depending on the lender.  Some of them made friendly adjustments yesterday afternoon in response to stronger trading in the bond market. Others waited to make those adjustments until this morning.   In the bigger picture, rates are still slightly elevated compared to their recent stint calmly holding the lowest levels since December. But they’re not looking nearly as panicked as they did in the week following the big tariff announcements earlier this month.  The coming week brings an active slate of economic data and events with the power to whip up some additional volatility. As always, we can only know about the potential for volatility. The actual direction and magnitude of rate movement will depend on the outcome of the economic reports as well as any other relevant headlines that emerge throughout the week.

As is the case for the monthly data on New Home Sales from the Census Bureau, the National Association of Realtors (NAR) Existing Home Sales report does not make for exciting news these days. It’s not that the news is tragic or alarming either.  It just sort of… is. Whereas New Home Sales have been able to hold sideways near their pre-covid highs, Existing Sales continue to languish near the lowest levels in decades.  Apart from the great financial crisis in 2008-2010, you’d have to go back to 1995 to see lower levels. “Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” said NAR Chief Economist Lawrence Yun. “Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society.”

The Census Bureau released March New Home Sales data this week, and it was near the best levels seen since early 2022.  Before you get too excited about that, a caveat is in order.  Simply put, when it comes to housing market data, nothing has been more uneventful than new  home sales over the past few years.  The chart tells the story. It’s tough to make an entire news article interesting when it comes to this data, so we won’t waste your time.  Instead, here are some bullet-pointed highlights that showcase some of the departures from the status quo (these are common, and they tend to come out in the wash in the longer term):
Sales fell 22.2% in the Northeast region, but had risen just as sharply in the previous month.
Sales jumped nicely in the South for the 2nd straight month (13.6% this time) and are now at their highest levels since April 2021.
The South accounts for 483k of the 724k national total.

The trend is not the norm but there are growing opportunities to buy for less in some areas many people gravitate to, real-estate brokerage Redfin found.

While the 30-year rate landed near its level of a week ago, it ended up there only after political developments led to up-and-down swings in Treasurys.

It is quite likely March’s drop in the Purchase Application Payment Index will be transitory as mortgage rates have increased since the start of April.

Sales of previously owned US homes fell in March by the most since 2022 as buyers remained constrained by high mortgage rates and prices.

Small-business owners will be given the option to tap into anywhere from $50,000 to $500,000 in financing.

Solid Bond Rally For Debatable Reasons

Bonds improved moderately well overnight and added to those gains steadily during the domestic session.  Ask 10 traders why and you might not get 10 different answers, but it would be at least 5. Improvement in the tariff outlook is a common refrain, but forex markets suggest that’s not a huge motivation.  Still, one could argue that a more sober approach is restoring some confidence for bond traders. One could also argue that traders are positioning for economic fallout with next week being the big week for econ data. Then there’s the notion that moving through the Treasury auction cycle was helpful, but it’s not as if traders didn’t know that ahead of time. Last but not least, a comment from Fed’s Hammack (saying the Fed could move in June) did align with some of this morning’s improvement, but not in a way that accounts for an entire day’s worth of gains. Perhaps we’ll have to dust off the “no news is good news” thesis and simply conclude it makes sense for bonds to be consolidating in the pre-tariff range until we get a clearer sense of policy and the economy’s response to it.

Econ Data / Events

Jobless Claims

222k vs 222k f’cast, 216k prev

Continued Claims

1841k vs 1880k f’cast, 1878k prev

Durable Goods

9.2 vs 2.0 f’cast, 0.9 prev

Core Durable Goods

0.1 vs 0.2 f’cast, -0.3 prev

Market Movement Recap

08:58 AM Stronger overnight with additional gains after uneventful data.  MBS up a quarter point and 10yr down 6+bps at 4.32

01:09 PM No major reaction to ho-hum 7yr auction.  10yr yields down 7.7bps at 4.312 and MBS up 3/8ths of a point. 

03:33 PM Best levels of the day.  MBS up nearly half a point and 10yr down 8bps at 4.31