The average top tier 30yr fixed rate is set to end the week just a few hundredths of a percent higher than last Friday at 6.92%.  That’s a victory–albeit a small one–after hitting 6.99% on Wednesday. As always, these rates refer to an index representing broad industry averages for best-case scenarios. Individual lenders and scenarios can be quite a bit different for a variety of reasons. Today’s rate change is a bit misleading because it left us in slightly better shape versus yesterday. The bond market (which is directly responsible for mortgage rate changes) disagrees. Whether we’re talking about mortgage-specific bonds or their more popular older sibling US Treasuries, bonds were just a hair weaker across the board. Weaker bonds = higher rates, all other things being equal. The discrepancy comes down to timing and the rate setting practices of mortgage lenders. Specifically, bonds improved late enough in the day yesterday that many lenders didn’t fully adjust their mortgage rates to reflect the gains.  Then this morning, bonds signaled even lower rates before ultimately moving back to more neutral levels.  Some lenders bumped rates slightly higher as a result, but the average lender is still slightly below yesterday’s rates and bond market levels are still slightly better than they were when most lenders released their last rate update yesterday. If this is all a bit confusing, remember that mortgage rates only change once or twice a day, apart from extremely volatile trading days. Meanwhile, the bond market is changing every second. Lenders have to decide where to set rates based on that moving target.  Here’s how the past two days looked to the average lender:

One of the tools introduced is a voicebot, dubbed Mia, which helps with consumer retention by making calls to check on clients for UWM broker partners.

The move was necessary for Dark Matter in order for it to align the size of its workforce with current mortgage market realities, CEO Sean Dugan said.

The government-sponsored enterprise is retiring a technology platform used for loan workout reporting and giving mortgage companies a deadline for leaving it.

A growing supply of unsold inventory applied downward pressure on prices, offering home buyers some relief, the Mortgage Bankers Association said.

The title insurance industry, highly dependent on mortgage origination volume, recovered after watching volume fall 31% in 2023 and 16% in 2022.

Today’s Gains Help Us Understand Yesterday’s Losses

Wednesday’s weakness was severely lacking in the scapegoat department. In other words, there were not big, obvious justifications for the spike in bond yields. Today’s rally had a suggestion: perhaps the market was nervous about a potential update to the inflation framework in today’s Powell speech.  After all, it was the previous inflation framework update in 2020 (which basically concluded that rates could stay “lower for longer,” even if inflation was elevated) that was responsible for a lot of drama over the past 3 years. Although the 8:30am economic data helped a bit, most of today’s gains followed the 8:40am Powell speech.  The absence of stock losses makes the Powell explanation all the more plausible (i.e. if bonds were rallying on weak data, we’d expect to see stocks lose some ground, and they didn’t).

Econ Data / Events

Retail Sales

0.1 vs 0.0 f’cast

Retail Sales Control Group

-0.2 vs 0.3 f’cast, 0.5 prev

Core PPI Monthly

-0.4 vs 0.3 f’cast, 0.4 prev

Core PPI Annual

3.1 vs 3.1 f’cast, 4.0 prev
big revision from 3.3 last month

Jobless Claims

229k vs 229k

Philly Fed 

-4 vs -11 f’cast, -26.4 prev

Market Movement Recap

09:28 AM Modestly stronger overnight and catching a “no whammies” bid early.  MBS up 9 ticks (.28) and 10yr yield down 6 bps at 4.475

12:10 PM Best levels of the day with MBS up nearly half a point and 10yr down 8.5bps at 4.45

02:59 PM Still near best levels.  MBS up 3/8ths and 10yr down 8bps at 4.456

Houses in 85% of the nation’s metropolitan areas are considered overvalued, with more than half of those by 10% or above, Fitch Ratings found.

US corporations with over a trillion in assets snapped up an unprecedented amount of short-term Treasuries when President Donald Trump announced a 90-day delay for most of his “Liberation Day” tariffs, according to Clearwater Analytics.

The plaintiff is asking for a Seattle federal court to postpone the Redfin shareholder vote, scheduled for June 4, until the company disseminates supplemental information curing the alleged omissions in the proxy filing.