The market could find out next year how well foreclosure prevention innovations and home equity protect borrowers from growing strains on affordability.

Median housing costs came in higher in every region of the country, but several cities that saw the most growth two years ago continue to see declining values, the National Association of Realtors said.

While it’s possible to accuse mortgage rates of experiencing volatility over the past few days, this week was exceptionally calm compared to last week.  So “everything’s relative,” and relatively speaking, that’s a win. Here’s a snapshot of the action as told by 10yr Treasury yields, which tend to be moving in the same direction as mortgage rates: As the chart points out, Thursday’s 30yr bond auction brought this week’s only instance of excess volatility.  This refers to The Treasury Department’s regularly scheduled auctions of US debt–some of the only interesting items on this week’s event calendar as far as rates were concerned. In general, Treasuries are the tour guides for the bonds that drive mortgage rates (MBS or mortgage-backed securities).  They tend to hang out closer to the tour bus while MBS go off in search of adventure, but everyone is generally moving to the same places at the same time. In other words, a big, volatile jump in Treasury yields often suggests the same for mortgage rates.  Fortunately, this particular jump wasn’t that big, and the 30yr Treasury bond is less correlated with mortgage rates than 5 or 10yr Treasuries.  The result was only a modest increase in rates on Thursday and not one that erased too much of the recent improvements. Of course we should remember that everything’s relative… The chart above is not intended to rain on any parades, but merely to put them in context.  It shows 3 previous instances of rates appearing to top out and push back against long term highs only to be persistently dragged higher.  All that to say: it’s promising to see rates mostly holding last week’s improvement, but as far as long journeys go, it’s best viewed a solid first few steps.

Also, lenders Click n’ Close, Lower add c-level executives, Southern Bancorp embarks on expansion of mortgage division and Formfree finds new director of marketing.

All of the loans were originated by CrossCountry Mortgage, which previously had a relationship for this product with Starwood.

Mike Cagney, the fintech’s CEO, said Tuesday the project came about in reaction to an industry need for a private capital market.

Broader economic factors, including growing household debt, are also likely to keep the housing market stagnant, Freddie Mac said.

Its strong balance sheet opens up opportunities for the mortgage lender to bring more companies under its helm, executives during the earnings call said.

30yr Auction Draws a Line Under The Range

The day began with nominal, inconsequential weakness in bonds.  10yr yields were barely up to yesterday morning’s levels and MBS were doing even better.  Neither saw any drama in the first half the day, but both tanked hard after an incredibly weak 30yr bond auction.  Powell offered some hawkish reminders an hour later, but if that had any impact on longer-term bonds, it was only to keep yields in the post-auction range (short-term bonds definitely didn’t like it).  The auction and the resulting sell-off were significant enough to draw a fairly clear line under the recent trading range in Treasury yields for now.  Mark it around 4.50% in 10s.  Barring surprises, this likely means the range is the range until next Tuesday’s CPI.  The lower boundary is clear.  The upper boundary has a few candidates to consider over the next 2 trading days.

Econ Data / Events

Jobless Claims

217k vs 218k f’cast, 220k prev

Continued Claims

1834k vs 1820k f’cast, 1812k prev

Market Movement Recap

09:52 AM Modestly weaker overnight, but holding ground.  10yr up 6.3bps at 4.555.  MBS down a quarter point. 

12:44 PM Weakest levels of the day for Treasuries. 10s up 8.3 bps at 4.575. MBS holding more sideways with 6.0 coupons down just over a quarter point.

01:25 PM Much weaker after the auction.  10yr up 11.6bps at 4.608.  MBS down just under half a point. 

02:21 PM Modest rebound, but now weaker again after Powell comments.  10yr up 14 bps at 4.634.  MBS down just over half a point.

04:29 PM Fairly flat in the final hours.  10s roughly unchanged from last update.  MBS just a bit weaker (down 19 ticks or .59).

It was a great run for mortgage rates over the last 2 weeks with a sharp decline last week followed by very respectable ground-holding in the present week.  But things got less respectable today.  Bonds (which underlie day to day rate momentum) began the day in only moderately weaker territory before tanking hard in the afternoon.  Said tankage was the result of an appallingly weak 30yr Treasury auction. We discussed Treasury auction implications a bit yesterday, but the gist is that a bad Treasury auction is bad for rates.  It’s that simple and today’s Treasury auction was very bad.  There’s nothing too dramatic underlying the bad showing.  If anything, it’s just confirmation that rates have managed to come a long way (lower) very quickly and that it’s time for them to cool off and consolidate before the next move. Anything can happen on any given day, but the “next move” stands the best chance of getting some guidance after next week’s Consumer Price Index (CPI) on Tuesday morning.  This is a key inflation report that has been responsible for some of the biggest moves we’ve seen in rates in the past 2 years. As for today, the average mortgage lender was only moderately higher in the morning, but most lenders made mid-day adjustments that left them sharply higher compared to yesterday afternoon.