The program is even lower than Freddie Mac’s best of 3%, with Zillow offering to pay 2% of the down payment at closing, according to a statement Thursday.

The 30-year average jumped for the fifth week in a row and is likely to continue trending upward, economists say..

Wednesday proved to be one of the 3 best days for mortgage rates in months.  The catch? Those “great” days are most likely to be seen in the wake of a steady run up to long term highs.   The other catch is that there was no follow-through today.  In fact, the average lender was just a hair higher when quoting top tier conventional 30yr fixed scenarios. How about a third catch?  This one is more of a double edged sword.  It has to do with the anticipation surrounding tomorrow’s speech from Fed Chair Powell at the annual Jackson Hole symposium.  While it’s not entirely clear what the market expects Powell to say that would be very different from anything he’s recently said, there’s nonetheless lots of talk about the market being ready to make a bigger move as a result.  Sometimes we see those sorts of big moves simply because everyone thinks everyone else is about to take part in them. What does it mean for you?  Long story short, whereas rates didn’t move much today, there’s a better chance of bigger movement tomorrow, for better or worse. 

With the morning economic data having come and gone with little fanfare, the most significant role today can fill is as a placeholder.  It offers the bond market an opportunity to vote on whether or not yesterday’s rally was a token “oversold correction” (the ayes have it) and to position for tomorrow’s Jackson Hole speech from Fed Chair Powell.  Surely someone has informed him of the buzz surrounding R-star since his last speech, so odds are greater for volatility tomorrow.  Today is uneventful so far with modest losses overnight and a small chance for a reaction to today’s 30yr TIPS auction.  Normally, TIPS aren’t worth mentioning, but given the current preoccupation with “real yields” in financial circles, this one could be an exception. 
That said, it wouldn’t be an exception in a bigger picture sense.  In other words, it wouldn’t create any lasting momentum or a big enough reaction to change anything at all.  TIPS yields are actually fairly uninteresting relative to the current level of buzz.  They’ve almost perfectly mirrored and matched their non-TIPS counterparts all year.

Moreover, they’ve done a pretty good job of capturing the inflation implications.  If we subtract TIPS yields from cash yields, we can see “market-based inflation.”  Traders also refer to this is “TIPS Breakevens.”  In general, it should simply convey the bond market’s inflation assumptions.  Bottom line: looks pretty similar to actual inflation.

Bonds Opt to Avoid Exuberance Ahead of Powell

After Wednesday’s big rally ended with bonds near their best levels of the day, there was some small chance that the bond market would take a more exuberance approach to Thursday with a bit of a follow-through rally.  That said, there was a better chance that Wednesday’s rally was a limited-time engagement to blow off the oversold steam.  It would have made slightly better sense for bonds to hunker down today ahead of Powell’s Jackson Hole appearance on Friday, and that’s exactly what happened.  

Econ Data / Events

Jobless Claims

230k vs 240k f’cast, 239k prev

Durable Goods

-5.2 vs -4.0 f’cast, 4.7 prev

Durable Goods, Excluding Transportation

0.5 vs 0.2 f’cast

Market Movement Recap

08:37 AM 10yr up 3bps at 4.227 and MBS down 3 ticks (.09), with slight additional weakness after the data.

12:13 PM Losing a bit of ground.  10yr up 3.1bps at 4.227 and MBS down 7 ticks (.22) in 6.0 coupons. 

02:37 PM Modest weakness continues.  10s up 3.5bps at 4.231.  MBS down 6 ticks (.19). 

“I’m not a fan of elevator music. It’s bad on so many levels.” Whether or not you think that the environment and value of owning stock in lenders and vendors has been “bad” over the last year or two, it certainly has been dicey. If you want to “be long” lenders or other mortgage-related companies, you could put some of your hard-earned savings into RKT, ICE, GHLD, UWMC, HMPT, LDI, PMT, FOA, or COOP. Now you’ll have a new vehicle: BETR. Yes, Better.com is going public, in what many would term a “challenging” environment. In a combination of stock market news, along with the reminder that making predictions about markets is like throwing darts, an ETF that was started on March 1, 2023 to track Jim Cramer’s stock picks has only garnered $1.3 million in assets and is closing. Maybe this is the free market saying that Jim Cramer is full of fluff and no value. (Today’s podcast can be found here and this week’s is sponsored by PHH Mortgage. For over 30 years, PHH Mortgage has provided industry-leading mortgage services and helped countless homebuyers and homeowners find financing solutions to meet their needs.) Lender and Broker Software and Services Are you attending IMN’s 6th Annual NPL, Notes & Default Servicing Forum in September? If so, be sure to check out the session “How Do You Determine the Pricing of Distressed Deals?” where Velocity Servicing’s President, Matt Stadler, will be moderating! During this session, Matt will lead panelists through the nuances of pricing distressed loans, including the following: Where are distressed deals coming from, and how can you source them? What impacts are inflation and interest rates having on distressed product pricing? What factors determine the pricing of distressed deals? Important due diligence factors to consider when pricing. And more! If you are interested in scheduling time to meet with Matt during the conference, contact matt.stadler@loancare.com. Click to learn more or call today at 646-361-6808 to partner with Velocity Servicing™, a LoanCare® division, for your specialty servicing needs.

In a letter to the Federal Trade Commission, the California Democrat said assurances were needed from the potential combined company to ensure the buyer of divested assets would not be dependent on the “conglomerate” to offer fully functioning products.

While late payment and foreclosure rates continued to fall, prepayment activity also slowed with rates approaching 7%.

Millennials make up the biggest chunk of the pie, representing 49%, while Gen Z represented 27% of all first-time borrowers this year, a Zillow report said.

Purchases of new single-family homes increased 4.4% to an annualized 714,000 pace after downward revisions to prior months, government data showed Wednesday.