The hedge fund accepted a $639 million offer from the mortgage REIT last month.

When it seems that we’ve only known pain in the mortgage rate world recently, the absence of pain is a welcome relief.  Such was the case today with the average mortgage lender offering terms that were almost perfectly in line with yesterday’s.  This “flat victory” looked like too much to hope for earlier this morning.  The bond market was weaker to begin the US trading day (weaker bonds = higher rates, all other things being equal) and the average lender was indeed in higher territory to start. Bonds bounced back in the late morning hours, thus allowing most lenders to make favorable mid-day adjustments to their rate offerings.  It was only after those adjustments that the average moved back in line with yesterday’s. Top tier conventional 30yr fixed rates remain near 7.5%.  Paying discount points or having a less-than-perfect scenario can change that number for better or worse.   Many market participants are expecting “volatility” after Friday’s speech from Fed Chair Powell in Jackson Hole. That’s just a fancy way of saying the odds are higher for movement without specifying whether that movement will be higher or lower.  Other market participants see today’s ground-holding in the bond market as evidence that the recent rate spike is getting tired. 

Absence of Additional Weakness

Today’s trading session doesn’t really qualify as a strong one for the bond market, but we could probably justify saying there was an absence of additional weakness.  Even that looked like it would be a tall order this morning as yields technically hit another super long term high before settling down into the afternoon.  Existing Home Sales data was at the scene of the move, but we don’t see it as a market mover.  Best case scenario: sellers are finally getting tired and things will either stay flat or correct modestly ahead of Friday’s Jackson Hole talk from Powell.

Econ Data / Events

Existing Home Sales

4.07m vs 4.15m f’cast, 4.16m prev

Market Movement Recap

10:09 AM Stronger in Europe, but giving up all gains in domestic trading.  10yr unchanged at 4.344.  MBS down an eighth of a point.

11:42 AM 10yr back into positive territory, down 2bps at 4.322.  MBS roughly unchanged.

03:31 PM MBS off the highs, but liquidity is distorting the move.  6.0 coupons down 1 tick (.03) on the day and about an eighth from intraday highs.  10yr down 1.2bps at 4.33, but off the most recent lows of 4.314. 

Sales of existing homes slipped in July even as median prices sustained their record-high levels. The National Association of Realtors® (NAR) said the month’s sales of single-family homes, townhomes, condominiums, and cooperative apartments were at a seasonally adjusted annual rate of 4.07 million units, down 2.2 percent compared to June and 16.6 percent lower than in in the same month in 2022. Single-family home sales slid to a seasonally adjusted annual rate of 3.65 million, a 1.9 percent month-over-month decline and down 16.3 percent from the previous year. Condo and co-op sales slipped 4.5 percent to 420,000 annual units: 19.2 percent fewer than a year earlier. [existinghomesdata] The median existing-home price for all housing types in July was $406,700, a 1.9 percent annual increase . NAR said It was the fourth time the monthly median sales price had exceeded $400,000 since it started keeping records. Previous such prices were logged in June 2023 ($410,000), and in both May and June of last year at $408,600 and $413,800, respectively. The median existing single-family home price was $412,300 in July, up 1.6 percent year-over-year, while condo prices rose 4.5 percent to a median of $357,600. [existinghomeprices] There were 1.11 million housing units available for sale at the end of July, an estimated 3.3-month supply at the current sales pace. This is an increase of 3.7 percent from the end of June when there was a 3.1-month supply but 14.6 percent below total inventory in July 2022.

Recall the title of last Friday’s recap: “This is How They Get Ya.”  There is no “they,” and no one is really trying to deceive you.  Rather, the intention is to advocate against deceiving oneself.  Reason being a tendency to rejoice in any semblance of bond market strength without considering the strength in context.  Case in point: bonds are rallying a few ticks into positive territory this morning.  Hurray?!  The only issue is that apart from yesterday, trading levels are currently the worst of the cycle.  Optimists can replace “getting got” with something about thousand mile journeys beginning with single steps.

Phantom Planet sang, California here we come, right back where we started from.” Many here at the Western Secondary have spent their entire career in California, which makes sense given that, over the decades, 20-25 percent of the nation’s home loans come from here. Overheard in the hallway yesterday: “I’ve been in this business so long, I remember when the big sleeping area in the house was called a ‘master bedroom’ and not a ‘primary sanctuary.’ That aside, there are more serious topics about staying afloat, and further staffing and overhead reductions are coming. Rember that from 2021 to 2023 the number of units (not the volume) is down 2/3. How about your staff? Loans have gotten harder to do: interest rates are higher, short contract times, affordability, quality standards, borrower’s variable income, LOs not doing their homework in submitting files, borrowers having multiple jobs or quitting before the loan funds. The list goes on. (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. Hear an interview with Arrive Home’s Matt Pettit on down payment assistance programs and the push for more affordable housing.) Lender and Broker Software and Services The Beverly Hillbillies discovered oil by accident after an errant bullet caused oil to bubble up from the ground, but not everyone can strike it rich by taking shots in the dark. Sales Boomerang by TrustEngine illuminates lenders’ CRMs with alerts that take the guesswork out of prospecting by letting lenders know which contacts are ready for a loan and when. Mortgage Coach by TrustEngine helps mortgage advisors earn borrower trust and seal deals with advice that puts borrowers on the path to achieving their homeownership and financial goals. Learn how TrustEngine’s winning combination of Mortgage Coach and Sales Boomerang can help you strike it rich.

It notched relatively higher returns after betting on asset-backed securities with a rotation out of mortgage debt and collateralized loan obligations.

The growth in market share comes as the national insurance program has instituted a risk-based pricing regime that’s led to some fluctuation in rates.

The government watchdog’s original lawsuit was dismissed by a district court on Feb. 3, after the parties engaged in over nine months of discovery. Two months later, the agency challenged the decision.

The share is the largest on record for a second quarter, according to data from Redfin.