The interactive tool can answer consumer questions about the mortgage process, explain the difference between products and give an approximate quote.

Willingness to Rally Without Much Motivation

Bonds put in a nice day of gains after a mixed performance in the morning’s economic data.  Jobless Claims made a case for higher rates.  Producer Prices argued for a rally.  Based on past precedent for each report, you wouldn’t be wrong to expect this to be more of a wash than a 10bp drop in Treasuries and a half point rally in MBS, but that’s what we got.  But why?  We’ll be able to piece this together better in the coming days, but rationale ranges from European influences and “an overdone sell-off last week” to the legitimate sense that some big corner has been turned in the fight against inflation.  We can also throw in “supply” considerations as markets just made it through Treasury auctions for the week in addition to quite a few corporate bond offerings. 

Econ Data / Events

Jobless Claims

237k vs 250k f’cast

Producer Prices, Core m/m

0.1 vs 0.2 f’cast, 0.2 prev

Producer Prices, Core y/y

2.4 vs 2.6 f’cast, 2.8 prev

Market Movement Recap

08:36 AM Slight pull back after Claims data.  10yr down 2.3bps at 3.84 and MBS up just over an eighth of a point.

11:50 AM Additional gains after initial indecision.  MBS up 3/8ths and 10yr down 6.6bps at 3.797.

02:52 PM More gains into PM. No major reaction to 30yr bond auction.  10yr down 10bs at 3.765. MBS up almost half a point.

Farther vs further…  One is for distance and the other means “additional/additionally.”  The dictionary may disagree, but only because too many of you misused “further” over the years.  Let us speak of it no further… How about those mortgage rates?  What a difference 4 days make!  Last Friday, the average lender was just about as close to the “mid 7’ss” as they were at the 2022 peak.  Now today, mid-to-upper 6’s are back in fashion when it comes to top tier conventional 30yr fixed scenarios.  Incidentally, Freddie Mac’s widely cited weekly rate survey is also in the high 6’s as of today’s release, but it suggests a massive week-over-week increase whereas the opposite is true in reality.  Freddie averages 5 days of rates leading up to Thursday whereas our index is updated every day for the current day’s rates. In other words, Freddie is still getting caught up with last week’s spike while we’re here to tell you it’s already been erased.  Whether or not rates fall farther will depend on whether there’s further evidence of lower inflation pressures, as seen in this week’s economic data.  

Thursday begins with 2 data points that could be traded either way.  In one corner, we have another resilient reading in the Jobless Claims data (237k vs 250k f’cast).  In the other, wholesale inflation (via PPI) came in at 0.1 vs 0.2 f’cast). If anything, Jobless Claims has been far more likely to inspire bond market movement recently, but even though traders arguably pushed yields briefly higher in response, the ongoing theme of “lower inflation” is ruling the day so far.

As rumors continue to swirl regarding the purchase of a well-known Southeastern Texas mortgage bank, lenders are watching the current drop in rates. It is generally believed that a slowing economy, aka a recession, leads to lower rates. Some have been predicting a recession for a few years, and it becomes a little tiresome, especially with the Fed continuing to focus on inflation. At some point, there will be agreement that things have slowed (like small business optimism is now) and they’ll be right. Meanwhile, it is hard to have a recession when the labor market, housing prices in much of the nation, consumer spending, and credit availability, remain as strong as they are. At this point rates probably won’t drop much in the near future, and vendors and lenders can’t sit there, wringing their hands, waiting for things to get better on their own. Are lenders suddenly going to make huge margins on lots of volume in the second half? Are LOs who were doing 2-3 loans a month in the first half suddenly going to do 4-6? Are vendor reps suddenly going to double their clients? Are rates going to plummet? Is the number of houses for sale going to skyrocket? (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, incentive compensation, and business intelligence.) Lender and Broker Software, Services, and Products

Mayor Michelle Wu is offering hefty tax breaks to companies to turn offices into housing, the latest example of a city seeking to address the challenges of remote work hitting downtowns and a lack of affordable residences.

The newest participants in the blockchain-focused lender’s private-label lending business are CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store.

The branch, which has close to a dozen employees, hopped from its old employer, Motto Mortgage, to its most recent employer in mid-December, but only stuck around for half a year.

A decline in refinances was offset by a rise in purchase loans, largely among government-guaranteed programs, according to the Mortgage Bankers Association.

Nevada also approved similar legislation in June, with permanent policies now in place in over half of all U.S. states.