More than one-third of average wages is now needed for borrowers to make regular payments on the typical home, according to Attom. Meanwhile, the Mortgage Bankers Association found monthly costs rose 14% annually.

In 2021, Black and Hispanic homeowners were most prone to have suspended payments, but by 2023 they were just as likely to have resumed them as other groups, a study found.

However, the company said it is exploring more “tech-forward solutions” to offer title and escrow services in the future.

The list of 57 early adopters includes large banks like BNY Mellon, JPMorgan Chase and Wells Fargo, as well as large bank technology companies including Jack Henry, FIS and Fiserv.

Bonds Crushed by Data, But Technically Still in The Range

At many points in the past week, we’ve lamented the narrow, boring nature of the prevailing trading range.  The thesis has been constant: it will take data to prompt a more meaningful move as the market trades on technicals in the meantime.  Today’s data did it’s best to prompt a meaningful move with GDP revised up 0.6% and Jobless Claims falling most of the way back down to earth.  Bonds reacted with their largest sell-off in several weeks.  Ironically, because the starting point was the bottom of the range, the sell-off was only able to get yields up to the ceiling of the range.  

Econ Data / Events

Jobless Claims 

239k vs 265k f’cast, 264k prev

Q1 GDP

2.0 vs 1.4 f’cast

GDP Final Sales

4.2 vs 3.5 f’cast, 1.1 prev

Pending Home Sales

-2.7 vs -0.5 f’cast, -0.4 prev

Market Movement Recap

09:07 AM Weaker overnight with additional selling after econ data.  MBS down 5/8ths and 10yr up 11bps at 3.823.

11:45 AM Snowball selling into the 10am hour and leveling off after that.  10yr up 13.2bps at 3.846 and MBS down 5/8ths.

02:42 PM Still sideways at weaker levels, 10yr up 13.6bps at 3.85.  MBS down 3/4ths. 

04:16 PM Off the weakest levels, but still generally flat.  10yr up 12.4bps at 3.838.  MBS down just under 3/4ths.

Despite other indices showing the average 30yr fixed rate in the 6.7 range, the actual average (after accounting for points) is once again over 7%.  We were already close as the index stood at 6.91 yesterday afternoon.  That means lenders were offering rates in a range between 6.625 and 7.5%, give or take. Today’s index leapt almost immediately to 7.04, meaning lenders are predominantly quoting 7% or 7.125%.  At this point, it’s good to note that a “point” (1% of the loan balance paid upfront for the purpose of dropping one’s rate) goes a longer way than normal these days.  At the moment, it would turn a 7.125 rate into a 6.625 rate. In other words: 7.125% with no points = 6.625% with 1 point.   Whether or not this makes financial sense for anyone’s individual scenario, budget, or outlook is a matter of legitimate debate, but points have been more prevalent than historically normal due to their outsized value.  That’s unfortunate with respect to other rate indices like Freddie Mac’s, which no longer takes points into consideration. So what caused the spike? Economic data!  We know the bond market has been hungry for evidence for or against economic resilience.  Today’s data suggested much more resilience than expected.  Thus, bonds sold/deteriorated, and that leads to higher interest rates.

Technical analysis provides an easy entry point for folks who want to talk about what the markets might do next.  It is made all the more alluring due to its implicit claim to be better than a coin flip at predicting the future. Unfortunately, that is a bit of a trap.  We’ve been careful to note–especially in this market–that no matter what the technicals say, data will speak louder. 
Incidentally, the technicals have been saying good things about bonds.  The following chart of 10yr yield candlesticks has 3 fairly popular overlays: Bollinger Bands, stochastics, and MACD forest (really just a more digestible representation of stochastics).  If you look up the textbook definition on the “signals” associated with these technical studies, each has provided a fairly classic positive signal. 

As we warned earlier this week, a sideways consolidation after a sharp sell-off is always going to throw up false positives in the technicals, and that the market is much more interested in DATA!  As of this morning, we have a stark reminder about that. 

A “crisis” is a time of intense difficulty, trouble, or danger. Think calamity, catastrophe, or disaster. The word makes for attention-grabbing headlines, and a scan through the news shows a mental health crisis, child care crisis, migrant crisis, China property crisis, a climate change crisis, an opioid crisis, a housing crisis… Eventually people become immune to seeing the word, and it loses its effectiveness, especially when nothing pans out from the “crisis.” I mention this because, despite a lot of predictions to the contrary, the banking “crisis” from March seems to have been contained to a few well-known banks. (Let’s hope so.) The Federal Reserve Board, released its results of annual bank stress test, which demonstrates that “large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.” Of course, not every bank is large, and Ken Sonner telexed over the “The 100 Largest U.S. Banks by Consolidated Assets” which is of interest to anyone who has money in a bank or has a bank for a client. Yes, Chase now equals Wells Fargo plus Citi. (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Optimal Blue’s Erin Wester on both Product and Pricing Engines (PPE) and how pricing in the secondary market flows into the primary market.)

The Federal Housing Administration plans to review and possibly adjust the large loan limit, which determines which mortgages need additional underwriting more regularly going forward.

Younger customers want personalized engagement, including in their music playlists, experts said at American Banker’s recent Digital Banking conference.