While what they get for their money is important, it was not the leading reason why home buyers decided to relocate, the National Association of Realtors said.

The perpetrators conspired to manipulate the short-sale process following the Great Financial Crisis, allowing them to renovate and flip homes for well above the original selling price and leading to millions in losses for lenders and government insurers.

Last Monday, mortgage rates were near the highest levels in more than 3 months.  A week later, and the average lender is right in line with the lowest levels in more than a month.  There are two reasons for this, or rather, one reason and one caveat. The caveat is that the range has been fairly narrow since the end of October.  Most of the recent rate spike took place by October 24th, so we didn’t have to traverse much ground to get back to those rates.  Additionally, those rates are still substantially higher than the beginning of October.  The specific reason for today’s improvement is the bond market’s reaction to Trump’s Treasury Secretary appointment.   Bonds dictate rates, and bonds are relieved to see a more fiscally conservative pick. To oversimplify the underlying dynamic, it’s easier for rates to move lower when the Treasury department isn’t issuing debt at a record pace.  That goal is seen as more achievable under Bessent. The average top tier 30yr fixed mortgage rate fell back below 7% with today’s move, but not by much.  This means many borrowers will still be seeing rates in the low 7s, even for top tier scenarios. 

Come For The Big Rally, Stay For The Staying Power

Bonds rallied sharply on Monday.  It wasn’t the first time we’ve seen some decent gains in the past few months, but it was definitely the first time we didn’t need to grease the skids with the highest yields in several months in the previous session.  In other words, it was a rally that arrived after a string of already fairly decent days–the first we’ve seen since September 10th. Credit goes to the announcement of Scott Bessent as Treasury Secretary who’s seen as a more fiscally conservative option–something bonds have been longing for.

Market Movement Recap

08:41 AM Stronger start with most of the gains hitting immediately at the overnight open.  MBS up a quarter point and 10yr down 9bps at 4.318

01:19 PM Gains continue.  MBS up 15 ticks (.47) and 10yr down 12.8bps at 4.279

03:01 PM Steady near best levels.  MBS up half a point and 10yr down 13.8bps at 4.269

“Pro tip” to start the week: Be sure to bring up politics at your family’s Thanksgiving dinner. You’ll save a lot of money on Christmas gifts. A tip that I posted last week received a lot of thanks: If your business is an LLC or corporation, including a single member LLC, you must fill out this form by the end of 2024. Many companies are thankful for home equity loans, and here’s another tip: know your customer. TD Bank released two surveys: its 2024 HELOC Trend Watch Survey, which looks at how homeowners are using their equity, and 2024 Merry Money Survey, which examines shopping and money management habits around the holidays. To the surprise of no LO, 66 percent of homeowners view their homes as a source of generational wealth, and 73 percent of Gen Zers and 66 percent of Millennials indicated they’re likely to apply for a HELOC or home equity loan in the next 18 months. 41 of adults are saving for a major life event this holiday season, with retirement (13%) and buying a home (11%) being the most prevalent savings buckets. (Today’s podcast can be found here and this week’s are sponsored by Truework. By connecting every verification method into one platform, Truework helps lenders eliminate process disruptions, maintain a competitive borrower experience, and reduce the fiscal impact of verifying income. Hear an interview with Polunsky Beitel Green’s Marty Green on why the Fed is still maintaining a restrictive monetary policy but acknowledging that the need for drastic measures is over.)

Of all of Trump’s political appointees, Treasury Secretary is the most consequential for the bond market (“Treasury” is right in the title, after all!). Bessent got the nod on Friday night after the close, so there was no opportunity to witness a market reaction.  When Treasuries opened in Tokyo last night, the reaction was clear: bonds like Bessent.  This is logical considering several of his comments regarding the need for fiscal restraint as well as the gradual layering of tariffs. Bottom line: this isn’t a big picture game changer but it’s solid contribution to a fiscal policy backdrop that can coexist with lower rates in the future, assuming economic growth and inflation allow for lower rates.

Hedge fund manager Scott Bessent had been the betting favorite to take the reins at Treasury. Scott Turner, a former congressman and NFL player, will lead the housing agency.

Turner served as executive director of the White House Opportunity and Revitalization Council previously.

Freddie Mac is offering a municipal bond option for investors in its ML multifamily securitization offerings starting with its December issuance.

In its latest financial stability report, the Federal Reserve warned high equity valuations and low levels of liquidity could leave the financial system vulnerable to shocks.