With a scarcity of listings driving high home prices, both repeat and new purchasers are putting the most money down in decades, the report found.

Relationships with brokers will be terminated on Dec. 6, but company officials stressed there would be no impact to its loan servicing or other mortgage channels.

Analysts have been debating the impact on household finances and the economy as Americans resume student loan payments. There’s already a squeeze from higher interest rates, which are expected to slow consumer spending and economic growth.

Because the measure of the insurance fund’s soundness remained well above its target, trade groups asked whether the cost of coverage could be further reduced.

The departures of David Benson and Jeffrey Hayward means decades of internal experience are leaving the company, said David Stevens.

If you had to script out the most likely course of events after Tuesday’s big post-CPI bond rally, the safest expectation would be for a token pull-back that helps consolidate and solidify a majority of the gains.  In order for that baseline assumption to pan out, you’d need this morning’s data to come in neutral to slightly stronger and with 2 beats (retail sales and Empire State) and one miss (PPI), that’s exactly what we have.
All that having been said, let’s not give too much credit to PPI or Empire State as they pale in comparison to Retail Sales.  The latter is the reason for this morning’s moderate weakness, if we could only choose one.  We could also consider that the Empire State manufacturing data is the most recent (November data vs October for Retail Sales and PPI) and also the most bullish in terms of the result versus the forecast.
The most immediate implication is a strange combination of a concern and a victory as yields bounce at the 4.43 technical level in fairly obvious fashion.  Based on overnight trading, markets were already leaning in a bouncy direction before the data.

So why a victory?  Rate bulls, please be patient…  We don’t want to do the big rally all at once.  We need periodic consolidation  and current yields–even after this morning’s weakness–would make for the 2nd best closing level in more than 2 months.  When this party is officially underway, we will be seeing a clear move through the gap that currently exists between 2022’s high yields and the most recent lows.

Happy Thanksgiving From The Bond Market. See You in December

After Tuesday’s big CPI reaction, Wednesday brought the week’s only other top tier economic report.  Retail Sales may have been negative, but by coming in 0.2% higher than expected, the report paved the way for weakness in the bond market.  Actually, it’s probably more accurate to say that yesterday’s big rally paved the way for weakness in the bond market and today’s Retail Sales data confirmed that sellers need not fear a big, immediate extension of the rally.  Consider that 10yr yields rallied almost 50bps in just 2 weeks.  It makes sense to a moment to cool off.  Unfortunately, due to holiday timing, we may be in for a weird two weeks of “cooling off” with random volatility inside a moderate range–one that is ultimately broken by the first full week of data in December.

Econ Data / Events

Core m/m PPI

0.0  vs 0.3 f’cast, 0.2 prev

Headline PPI m/m

-0.5 vs 0.1 f’cast, 0.4 prev

Retail Sales

-0.1 vs -0.3 f’cast
prev month revised up to 0.9 from 0.7

Empire State Manufacturing

9.1 vs -2.8 f’cast, -4.6 prev

Market Movement Recap

09:16 AM Moderately weaker overnight with additional selling after AM data.  10yr up 7bps at 4.524 and MBS down 3/8ths

12:48 PM A bit weaker in Treasuries with 10s up 9bps at 4.543.  MBS down a quarter point.

02:46 PM Very flat!  MBS unchanged from last update.  10yr up 8.6bps on the day at 4.539

Besides Janet Yellen’s In-N-Out foray, it is a rough environment out there: Hope you don’t want a Wells Fargo HELOC. Or just ask Citizens who is exiting the wholesale channel; More below on that. Many lenders are reporting unit volumes dropping by 50-70 percent, in part due to higher rates caused by inflation expectations. Buying stuff in the holidays will be more expensive this year, and here’s a personal tale of inflation. I happened to be near a See’s Candy store recently. Knowing that my daughter enjoys a treat from time to time, we went in and, without looking at the prices, bought a can of Toffee-ettes and a small box of mixed chocolates. It turns out that Sees’ prices are up to $32/pound for the mixed and the can of toffee was $29. The total was $48.00. I may-as-well have been buying Kobe beef. Holy smokes! (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with LoanCare’s Eric Seabold on the current servicing market and what to be excited about as we close 2023 and move into 2024.) Lender and Broker Software, Products, and Services Earlier this month “Now and Then” became the first new Beatles song released in nearly three decades. The feat was accomplished with the help of machine learning technology that made it possible to extract clean vocals from a muddy recording John Lennon committed to cassette before his death. For examples of artificial intelligence in action that are more directly applicable to mortgage banking, be sure to sign up for nCino’s AI webinar taking place today, November 15, at 11 am EST. You’ll learn how financial institutions of all sizes are using AI to optimize operations, enhance risk assessments and foster personalized customer experiences.

Even though mortgage interest rates changed only slightly, the volume of mortgage applications moved higher for the second time in as many weeks. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 2.8 percent on a seasonally adjusted basis from one week earlier and was up 0.4 percent before adjustment. The Refinance Index gained 2.0 percent compared to the previous week and was 7 percent higher than the same week one year ago. Refinancing accounted for 31.9 percent of total applications, up from 31.4 percent the prior week. [refiappschart] Purchase applications rose 3.0 percent on a seasonally adjusted basis but slipped by 0.3 percent before adjustment. The Purchase Index was 12 percent lower than the same week one year ago. [purchaseappschart] “Although Treasury rates dipped midweek, mortgage rates were little changed on average through the week. The 30-year fixed mortgage rate remained at 7.61 percent, about 30 basis points lower than three weeks ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.  “Both purchase and refinance applications increased to the highest weekly pace in five weeks but remain at very low levels.  Despite the recent downward trend, mortgage rates at current levels are still challenging for many prospective homebuyers and current homeowners .”   Highlights from MBA’s Weekly Mortgage Applications Survey

At least two legal actions have been filed in a Texas federal court.