Industry veterans are wary of prospective borrowers who can’t pay for agents, and of compensation guidelines clashing with government mortgage lending programs.

Fannie Mae’s latest forecast now predicts rates to be half a percentage point higher, and volume to be $1.5 trillion lower than previously expected in 2024.

The change may open the door to an initial public offering for Figure Technologies’ origination division in the future.

Ceiling Survives But Wednesday is The Test

Any trading day without a big ticket economic report or Fed announcement faces an uphill battle on the road to relevance. Today was no exception with only Housing Starts on the data calendar and a 20yr bond auction rounding out the scheduled events.  The auction was relatively strong and helped facilitate the day’s modest gains.  That said, we were already green before the auction and the market seemed to simply be avoiding a break of the 4.32% ceiling.  It’s held up quite well now and we can assume Wednesday’s Fed events will either precipitate a clear breakout or bounce.

Econ Data / Events

Housing Starts

1.521m vs 1.425m f’cast, 1.374m prev

Building Permits

1.518m vs 1.495m f’cast, 1.489m prev

Market Movement Recap

09:43 AM Sideways to slightly stronger overnight.  10yr down 1.6bps at 4.312.  MBS up an eighth.

12:15 PM 10yr down 2bps at 4.308.  MBS still up an eighth.  Sideways and somewhat choppy.

01:17 PM Some friendly volatility after 20yr bond auction.  10yr briefly down to 4.289, but now back to 4.308 (down 2bps on the day).  MBS up 5 ticks (.16).

02:13 PM Best levels of the day now with MBS up a quarter point and 10yr down 3.2bps at 4.296

The top five depositories have a combined wholesale volume of more than $15 billion at the end of Q4 2023.

The head of the Consumer Financial Protection Bureau summarized his findings from a yearlong probe into the Appraisal Foundation. He says the “lawmaking body” is not accountable to the public or market forces.

Financial advisors and tax experts say HOA fees are usually not deductible, unless the home is used for a business or as a rental property.

Among opportunities to be offered to the program’s fifth class of startup entrepreneurs are bank-provided mentorships and sessions with technology leaders and regulatory experts within home finance.

The broker argues it did not break any agreement because it never signed an amendment to UWM’s ultimatum in 2022.

Uneventful Trading Day Despite Technical Test

For all that we’ve talked about the 4.32% technical level and considering yields hit the 3pm close at 4.338, one might expect today to have been important, interesting, or eventful.  In truth, it was none of those things as this magnitude of breakout is well within the margin of error typically applied to broad technical targets. Even then, what would a breakout really mean if we’re still waiting for Wednesday’s Fed events to confirm or reject a breakout?  In other words, Monday can’t be anything other than a placeholder.  

Market Movement Recap

09:31 AM Flat overnight and modestly weaker in early trading.  MBS down an eighth and 10yr up 1.2bps at 4.32.

12:22 PM Bouncing around the weakest levels of the day.  MBS down 5 ticks (.16) and 10yr up 2.8bps at 4.336.

02:02 PM Weakest levels of the day with MBS off 7 ticks (.23) and 10yr yields up 3.6bps to 4.344.