The top five lenders have a combined retail home loan volume of more than $20 billion at the end of Q1 2024.

The mortgage veteran will oversee all operational aspects at Kind, a post published by the multichannel lender said.

Concocting a Narrative to Fit The Market Movement

There are certain days and even weeks where the bond market could reasonably do whatever it wants without one outcome being more surprising than the other.  This is one of those weeks.  Yields began on the doorstep of the 4.50% technical level.  If markets treated it as breakout selling cue, the result is today’s closing levels over 4.60%.  But if the market opted to maintain the range, it would be just as reasonable to see yields trading under 4.40%.  Either way, we’re left to examine the bottom shelf market movers and explain how those outcomes fit a higher/lower yield narrative.  In this case, it’s higher, but the point is that nothing has really changed and nothing is really being decided in the bigger picture.

Market Movement Recap

09:48 AM Losing ground after opening flat.  MBS down 5 ticks (.16) and 10yr up 2bps at 4.612

11:13 AM Fairly flat at weaker levels.  MBS down 5 ticks (.16) and 10yr up 3bps at 4.622

01:07 PM More losses after 7yr auction.  10yr yields up 6+bps at 4.654 and MBS down the better part of a quarter point. 

03:18 PM Off the weakest levels and sideways in the PM.  MBS down 5 ticks (.16) and 10yr up 4.1bps at 4.634

“I just saw three people jogging outside, and it inspired me to… get up and close the blinds.” Are you inspired to fly somewhere on vacation this summer? Hopefully your ride is smooth, unlike the recent Singapore Airlines flight; here is a riveting interview with one of the passengers about what it was like. In terms of your travel, good luck: Airlines are cutting back on routes across the U.S. even as consumer demand grows due to plane shortages, recalls, and the lack of financial viability for low-cost carriers like Spirit and Frontier Airlines. Atlanta and Orlando saw some of the biggest cuts in the number of seats available: about 860,000 fewer seats are available on routes flying out of Atlanta this summer. Bloomberg reports that Delta cut about 2.3 million total seats from its plans for the summer. Maybe you’ll be traveling to Mt. Everest, as Goldman Sach’s managing director and senior client investment strategist Elizabeth Burton recently did. She is the guest today at 11AM PT for “Mortgage Matters: The Weekly Roundup” presented by L1. (Found here, this week’s podcasts are sponsored by American Financial Resources, the mortgage lender that’s shaking things up by streamlining processes, bringing on the best humans in the business, and putting the customer experience front and center. Register here for a webinar on June 6th with Robert Pieklo and Rob Chrisman, and today’s features an Interview with Mr. Pieklo on the rationale behind private money entering the mortgage space and why the fund managed by Proprietary Capital chose AFR for investment.)

Mortgage rates most recently bottomed out on May 15th with the average top tier conventional 30yr fixed scenario being quoted just a hair under 7.0%.  It’s been a fairly consistent march higher since then, slowly at first, but more abruptly in the present week. Between yesterday and today alone, rates rose 0.18% on average.  All told the 6.99% average from May 15th was up to 7.34% at the close of business. The pace of the movement continues to belie the fundamental motivations.  Over the past few years, it’s most common to see the biggest rate volatility in response to key inflation reports, jobs reports, or Fed announcements.  None of the above have been present during the recent uptrend. The bond market (which underlies and ultimately dictates rate momentum) may have been a bit nervous to underwrite the most recent round of U.S. Treasury auctions which finally concluded this afternoon.  Bonds could also be apprehensive about the forthcoming inflation data in Friday’s PCE report.  Last but not least, the final trading days of any given month can always generate some of their own directional influence. Bottom line: the recent pain isn’t necessarily a sign of things to come.  It will ultimately depend on the tone of the new economic data in the coming days.

Higher interest rates helped to wipe out three weeks of gains in mortgage application activity. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that activity, decreased 5.7 percent on a seasonally adjusted basis and 6.3 percent before adjustment during the week ended May 24. The Refinance Index plummeted by 14.0 percent from the previous week’s level but stayed 12.0 percent higher than during the same week one year ago. The refinance share of mortgage activity decreased to 31.3 percent from 34.0 percent. [refiappschart] The seasonally adjusted Purchase Index declined for the third straight week, slipping 1.0 percent on a seasonally adjusted basis and 3.0 percent on an unadjusted basis. Purchase loan applications were down 10.0 percent compared to the same period in 2023.   [purchaseappschart] “Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05 percent and all other loan types also seeing increases. The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.  “Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels. There continues to be limited levels of existing homes for sale and many buyers are struggling to find listings in their price range that meet their needs.”

While US bonds were busy holding inside a narrow sideways range through the end of last week, pressure was building in the European bond market.  When US yields merely returned to the top of their range after Thursday’s econ data, EU yields were breaking their comparable highs.  Additionally, EU yields are now easily above their highs from April 25th while US yields still have above 10bps to go.

We would stop well short of making the case that US bonds are fundamentally informed by EU bond momentum in any major way.  Rather, the idea is that US bonds are more open to suggestion during the recent lull in relevant data and events.  One could certainly argue that the path of least resistance has been to follow the market with big-ticket inflation data releases (regional German inflation reports came out this morning).
The following chart has EU and US yields on separate axes, but with an equal range.  In other words, EU yields are moving more, and more directionally so far this morning.

If approved by the Federal Housing Finance Agency, the program will not lead to large amounts of home equity being extracted, nor is it mission creep, wrote Keefe, Bruyette & Woods analyst Bose George.

Over 54% of borrowers with a mortgage say they only got one mortgage offer, a LendingTree survey said.

Amid numerous late payment improvements, foreclosure sales and prepayments ticked up.