The last time mortgage rates were moving with any sense of urgency was in the days surround the Fed’s rate cut on December 18th. Incidentally, that movement was sharply higher, which is just as likely as any other outcome when the Fed is cutting rates for a variety of reasons. The rate rise leveled off by the end of Fed week with the average lender offering top tier conventional 30yr fixed rates near 7.125.  The average is only modestly lower today (7.07) and hasn’t moved much at all since then.   This sort of ambiguity is the default game plan for winter holidays due to changes in bond market participation.  It’s also a byproduct of the available economic data.  In not so many words, the Fed was the last major input, and we won’t get to the next one until next Friday’s jobs report.   Between now and then, moderate movement in either direction is possible, but any significant changes will require a surprise in the data.

Bonds were steadily stronger overnight, both in Asia and Europe.  10yr yields and MBS had both fully erased Tuesday’s losses within the first 30 minutes of domestic trading.  That’s when Jobless Claims data came out.  It was only sligh…

Even as annual home value growth levels out and the pace slows, prices are still rising and reached new records in October, two separate tracking measures disclosed.

Central Mortgage Funding failed to adhere to an earlier consent order imposed for using unlicensed mortgage loan originators.

Products belonging to Amynta Group’s newly acquired Crum & Forster platform included coverage aimed at protecting mortgage loan portfolios from borrower default.

Newrez’s servicing arm approved an “obviously counterfeit” HELOC request from a bad actor totaling almost $500,000, a complaint claims.

A vast majority of the collateral pool balance, 82.6%, are mortgages used to purchase primary residences, and just 17.4% finance second homes.

The day begins with MBS in slightly weaker territory while Treasuries are slightly stronger.  The discrepancy isn’t really big enough to merit any urgent explanation, but either way, there are several.  First off, there was a group of after-the-bell trades in MBS last night (around 5:02pm) that set artificially high ‘previous close’ prices.  A quick look at the chart suggests MBS are slightly stronger than anything seen yesterday.

Still, if we had to justify legitimate underperformance it would be as easy as pointing to the general outperformance of MBS last week.  Treasuries were clearly making room for Treasury auctions and have had some room to recovery since then. 

Last but not least, since it’s the last day of the year, one could always say Treasuries are benefiting more from month/year/quarter-end positioning, but that’s overkill in this scenario. 

Besides being enthralled with Tiger King and My Octopus Teacher four years ago, what do AL, CA, CO, CT, FL, GA, MD, MA, NJ, NY, NM, NC, RI, SC, TN, VT, and VA have in common? First-cousin marriage remains completely legal in these 17 states. Demographics are of great interest to lenders and originators. As of 2024, there were 65 million Baby Boomers, accounting for 20 percent of the U.S. population and 36 percent of total homeowner households, and about 83 million Millennials (born between 1982 and 2000). Total household net worth has increased by approximately $44 trillion, or $332,000 per household since the pandemic (Q4 2019 to Q2 2024). Of that, Boomer overall wealth increased by $19 trillion, or $486,000 per household, half of which is due to house price appreciation. Don’t think for a second that these demographics and statistics have escaped the notice of every reverse mortgage company out there. (Today’s podcast can be found here and this week’s is sponsored by The BIG Point of Sale, which offers a highly configurable, easy to install point of sale solution. Its simplified consumer workflows and web-based portals allow for consumers and loan originators to collaborate with the back-office team to keep everyone informed throughout the loan process. Hear an interview with Rate’s Connie Lindsay on what the SVP of Lending role at a mortgage company entails and how customer experience continues to be an arms race in the mortgage industry.) Software, Products, and Services for Lenders

Major holidays typically involve a full day market closure along with an “early close” on an adjacent day.  This matters to rates because mortgage lenders decide what they can offer based on trading levels in the bond market.  Mortgage lenders also need a certain amount of activity in the market if they hope to set competitive rates. As you might imagine, those “early close” days don’t tend to have as much activity, so lenders aren’t making as many adjustments as normal.  In today’s case, that ended up being helpful as it limited the amount of negative adjustments. Specifically, the average lender began the day in roughly the same territory as yesterday, but the bond market took a turn for the worse a few hours later.  Based on the pace of the weakness in the bond market, the average lender would normally issue a negative reprice (increasing their rates for the day). As it happened, only a small handful of lenders repriced. On one hand, this could mean that Thursday’s rates start out higher.  On the other hand, there’s no way to know where the bond market will open up on Thursday.  Either way, the final or first trading day of any given year can see some excess volatility/momentum for reasons that have nothing to do with the normal motivations (economic data, news, policy changes).