It’s day 6 of the increasingly famous 11-day weekend (1 normal weekend plus the 3 day Memorial Day weekend and the 5 days in between without any big ticket market movers on the calendar).  There was no way to know for sure that this week would be as flat and uninspired as it has been, but here on Thursday morning, we have yet to see any other indication.  This morning’s Jobless Claims data was one of the only scheduled reports this week.  It typically doesn’t move the needle and today is no exception.  Yields were mostly flat overnight with a bit of volatility in sympathy to European bond market volatility, but the domestic session is underway at almost perfectly unchanged levels.

CasteLine Risk, a homeowners insurance shop, and Insurance Services, an automobile company, are the two participating organizations on Lenders One’s marketplace.

Fannie Mae called out AI’s potential to end defects as Freddie Mac sought to spur current loan-quality tool use by quantifying benefits at an industry meeting.

Fannie Mae economists suggest home sales will remain resilient amid anticipated dips in both home loan volume and consumer spending.

Contract closings decreased 1.9% from a month ago to a 4.14 million annualized rate, according to National Association of Realtors data released Wednesday.

Others have also expressed dissatisfaction over the lack of information about the second lien program, a Freddie Mac executive said during a recent MBA conference.

No Major Reaction to Fed Minutes

Today’s only event that has any precedent of inspiring rate volatility was the release of the minutes from the Fed meeting that took place 3 weeks ago.  The fact that 10yr Treasury yields held roughly inside a 1bp trading range after the release tells us everything we need to know.  It was every bit as uneventful as we expected.  Even so, was there anything to learn?  Not really…  The Minutes were wholly unsurprising to anyone who’s seen most of the recent Fed newswires.  Bonds were slightly weaker in the overnight session due to UK inflation coming in hot, but mostly in the shorter end of the curve.  That meant modest underperformance for MBS (mortgages’ average life span is still seen as being quite a bit lower than 10 years, so they take cues from shorter-term bonds as well).

Market Movement Recap

11:23 AM Moderately weaker overnight, led by UK inflation.  Mostly back to unchanged now with MBS down 2 ticks (.06) and 10yr up half a bp at 4.422

01:57 PM Off the strongest levels ahead of Fed Minutes.  MBS down an eighth.  10yr unchanged at 4.417

03:10 PM Minimal reaction to Fed minutes.  MBS down 5 ticks (.16) and 10yr up 0.9 bps at 4.427.

The inventory of existing homes for sale increased from March to April, but the increased availability didn’t bolster sales. The National Association of Realtors® (NAR) said pre-owned single-family homes, townhomes, condominiums, and cooperative apartments sold at a seasonally adjusted annual rate of 4.14 million. This was a decline of 1.9 percent from sales in both March of this year and April 2024. At the end of April, there were 121 million units of housing available for sale, an increase of 9 percent from March and 16.3 percent year-over-year. This equates to a 3.5-month supply at the current rate of sales compared to 3.2 percent and 3.0 percent at the two earlier points in time. NAR says a six-month supply is typically necessary for a balanced real estate market. There was a big increase in higher-priced homes. The inventory of available homes listed at $1 million or more was 34 percent larger than a year earlier and sales in that tier increased 40 percent. Properties typically remained on the market for 26 days in April, down from 33 days in March but up from 22 days in April 2023. NAR’s chief economist Lawrence Yan said overall home sales changed little, but the upper end of the market is benefiting from the increase supply of homes. Single-family home sales fell 2.1 percent to a seasonally adjusted annual rate of 3.74 million, down from 3.82 million in March. Sales were 1.3 percent lower year-over-year.  Condo and co-op sales remained at their March level of 400,000 units, 30,000 fewer than the previous April.

It was another slow day for the mortgage market and one that joins a list of several other relatively inconsequential days in the past few weeks.  This is a byproduct of the bond market (bonds dictate rate movement) being tuned in to only a few key economic reports and events.  When these reports actually come out, rates move a lot.  But for the rest of the time, the vibes are drifty and sideways. Today’s version of “sideways” involved a drift to levels that were just barely higher than yesterday’s.  The average mortgage borrower won’t see much of a difference either way. Top tier 30yr fixed scenarios are still just over 7% for the average lender, but it’s worth keeping in mind that actual quotes will exist in a reasonably wide range round those levels depending on particulars.

As many from the conference fly home, there was a lot of information flying around the conference this week. (Check out the climate and catastrophe notes below). My son Robbie and I had the pleasure of sitting with the co-founders of nonprofit CapitalW Collective, Amy Creason, Pat Peters, and Leslie Winick, while in New York this week for the MBA Secondary. They’re on a mission to create a more inclusive and dynamic mortgage capital market through the Collective, looking to engage with everyone in our industry. But all is not peachy. The CFPB is very interested in more details on the rising costs associated with obtaining credit reports, per Director Chopra. “In many cases, a handful of firms have cornered the market, allowing those companies to levy a tax on every mortgage application or transaction in the country… The result is that mortgage lenders can evaluate fewer applicants, and homeowners end up eating higher costs, typically at closing.” No one wants to hear the term “price gouging” regarding their product, but credit folks heard it. (Found here, this week’s podcasts are Sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Today’s features an interview with new Figure Technology Solutions CEO Michael Tannenbaum on the evolution of the HELOC and 2nd Lien space in mortgage.) Lender and Broker Software, Products, and Services Industry Update: Usherpa, the original mortgage enterprise CRM technology, has enhanced its strategic partnership with MortgageFlex, one of the industry’s original mortgage technology developers and creator of the MortgageFlexONE LOS. Usherpa’s SmartCRM is the exclusive marketing automation and Relationship Engagement Platform to be connected to MortgageFlex Loan Origination System (LOS). MortgageFlex offers the industry’s only cloud-native unified technology platform for both origination and servicing. When combined with Usherpa’s sophisticated Relationship Engagement Platform, the partnership is a perfect pairing that wins lenders more business. Read the official press release here.