After 139 consecutive months of rising values, a change in the pattern could slowly emerge.

In a case challenging the funding of the Consumer Financial Protection Bureau, justices across the political spectrum questioned where — and whether — the Constitution placed limits on Congress’ power to delegate funding for federal agencies outside of annual appropriations.

Mortgage rates were already close to the highest levels in more than 20 years yesterday–an unpleasant milestone that was easily surpassed after today’s Job Openings data came in much higher than expected. Interest rates are always dependent on the economy and inflation–sometimes more than others.  Even without the Federal Reserve, rates would still need to pay attention to these things and stronger econ data would still imply higher rates, all other things being equal. But the Fed’s role as short-term rate setter only amplifies the volatility produced by key economic data.  This is especially true in recent months as the Fed reiterates a “data dependent” stance time and again.  It is also especially true for reports the Fed has specifically called out.  Today’s report is one of only a handful. Job openings have been declining since March, and that’s a good thing for rates, technically, but the decline hasn’t been as quick as expected.  Then days like to day cast doubt on the decline.  Openings jumped to 9.61m from 8.92m previously.  They’d need to be under 8m for the Fed to feel that its policies were having the desired impact on the labor market (and thus, on inflation prospects).  Much of the rapid rise in rates over the past two weeks has been in anticipation of this week’s economic data.  Traders were bracing for bad news.  Today delivered. And now the market is bracing for more of the same in the remainder of the week.  Risks are biggest on Friday morning when the Employment Situation (the bigger, more timely jobs report) comes out.

A tempest in a teapot or the start of an uprising? Redfin, the publicly owned Seattle-based real estate company with 50 offices nationwide, announced on Monday it is walking away from the National Association of Realtors (NAR). The company, in a letter published on its website, said it was moving to end its association with NAR. The letter, signed by CEO Glenn Kelman and seven other members of Redfin’s leadership team, said it was making the change because of NAR policies requiring a commission be paid to the buyer’s agent on every listing and “a pattern of alleged sexual harassment.”  In August, the New York Times reported that a number of NAR employees had come forward with claims of sexual harassment, discrimination and retribution at the association’s Chicago headquarters and local offices. Many of the complaints involved former NAR president Kenny Parcell. Both NAR and Parcell denied the allegations. Parcell quit shortly after the article was published.   Redfin said it had resigned its national board seat in June, before the alleged sexual harassment came to light, because of NAR’s policies on commissions and its prohibition on websites like Redfin.com from showing for-sale-by-owner homes. “Removing these blocks would be easy, and it would make our industry more consumer-friendly and competitive,” the letter said. Redfin said it will now require its brokers and agents to leave NAR wherever possible but because of the independent agent nature of most brokerages “they don’t want to impose a policy that could alienate any of the people who generate its revenue.” However, NAR rules require that Redfin also leave local and state associations even though its beef is only with the national group. In about half of Redfin’s markets, losing membership will mean loss of access to listing databases, lockboxes, and industry-standard contracts. “It’s impossible to be an agent if you can’t see which homes are for sale, or unlock the door to those homes, or even write an offer.”

“Higher For Longer” Fears Becoming a Reality After JOLTS

The Job Openings and Labor Turnover Survey (JOLTS) is not a report we paid much attention to as a market mover until the past year or two.  Since then, it has increasingly been mentioned by the Fed.  That alone is reason enough to pay attention, but it’s also able to teach investors things about the labor market that don’t show up as readily in other data. It had been trending lower (and arguably, still is), but as was the case in February and June, total job openings popped higher into a position where a subsequent increase would break the downtrend.  Bonds were nearly unchanged before the data, but sold off abruptly in its wake.  Both 10yr yields and mortgage rates hit new long-term highs. 

Econ Data / Events

Job Openings

9.61m vs 8.8m f’cast, 8.92m prev

“Quits” 

3.638 vs 3.549 prev (lower is better for rates)

Market Movement Recap

08:36 AM Another rout overnight. 10yr up 3.9 bps at 4.724 (overnight high = 4.752).  MBS down just over a quarter point.

11:08 AM Weaker after JOLTS.  10yr up 7.7bps at 4.762.  MBS down 5/8ths.

03:06 PM Steady selling all day.  10yr up 12.1bps to new highs of 4.806.  MBS down more than 5/8ths.  

In the wake of the Fed announcement from 2 weeks ago, one key component of our bearish thesis was that bonds had to brace for the potential impact that would result from data being strong in the first week of October.  It is now the first week of October and data has been stronger.  This morning’s JOLTS (job openings and labor turnover survey) is the biggest, baddest confirmation so far this week, and it’s pushing yields to fresh long-term highs.  Pretty simple stuff, actually, even if unpleasant and unfortunate for fans of low rates…

How will you always know that this Commentary is not produced by some AI thingy? Because of mistakes like yesterday, leaving Illinois off the list of top pumpkin growing states as several folks pointed out (thank you). Here are pumpkin stats out the proverbial wazoo. What autumn would be complete without this map of when fall foliage is peaking across the nation? While we’re on maps, the U.S. Census Bureau released an interactive map illustrating 2020 Census data about homeownership by the age, race, and ethnicity of the householder. The map provides data at the national, state and county levels and data from the 2010 Census for comparison. The Census Bureau also released the brief Housing Characteristics: 2020, which provides an overview of homeownership, renters, vacant housing and other 2020 Census housing statistics previously released through the 2020 Census Demographic and Housing Characteristics File (DHC). (Today’s podcast can be found here and this week’s is sponsored by TRUE. TRUE creates accurate data that powers automation and optimizes every step of the lending lifecycle, helping lending organizations rapidly process loans, dramatically cut costs and risk, and radically improve the customer experience. Interview between Robbie and Rob Chrisman on chatter from the capital markets and why people should tune in to their weekly Mortgage Matters video show each Wednesday.) Lender and Broker Software, Programs, and Services Not many lenders know this, but you can buy down points with down payment assistance (DPA). DPA has evolved over the years, and there are 2,373 to choose from today according to Down Payment Resource’s Q2 HPI report. What’s more, consumer interest in DPA is savage, and lenders who offer it have a competitive edge. Just ask anyone who originated one of the 2,300 CalHFA programs that disappeared in just 11 days. DPA is one of the best tools lenders have in today’s market and for the foreseeable future. Want to know how many homebuyer assistance programs are offered in your markets or to learn more about how Down Payment Resource makes it easy to support DPA? Schedule a demo with the Down Payment Resource team today.

More than a week ago, the consortium of deep-pocketed investors offered a figure higher than an earlier bid of $12.76 a share, but the specific amount was unknown.

The transaction was scheduled to be completed in the first half of this year, and a “substantial first close” was already announced in February.

The class action case, first brought up in 2020, alleged Lakeview Loan Servicing and LoanCare of violating the Texas Debt Collection Act through the collection of such “junk” fees.