The ISM Services Index is/was easily this week’s biggest ticket in terms of scheduled economic data. It was mostly OK for bonds with the growth-related components coming in slightly weaker. But the “prices paid” component remains problematic. At 69.9 vs 67.5 previously, the price component is at another new post-pandemic high for the 4th time this year. And of course, inflation is the biggest impediment to lower rates at the moment.  Nonetheless, the remainder of the report was downbeat enough to offset the inflation implications, but just barely. Bonds are now just about unchanged after starting the day slightly weaker.

“An economist’s left leg is on fire, and his right leg is frozen. He says, ‘On average I’m perfectly fine.’” For those out there continuing to scratch your heads about the Bureau of Labor Statistics, non-farm payroll, Donald Trump, and economic statistics in general, here is a fine, straightforward article explaining how the numbers are calculated, revised, and can’t be manipulated. Lenders and LOs have a lot to track, and be aware of, and on today’s episode of Advisory Angle at 11am PT, STRATMOR Group’s Sue Woodard, Kris van Beever, and Garth Graham return to explore how mortgage lenders and servicers can turn strategic vision into real-world execution. From modernizing technology to managing regulatory challenges, they share practical insights on what it takes to lead in today’s servicing landscape. Meanwhile, how’s your renovation offering? The median age of owner-occupied homes is 43 years old, according to the latest data from the 2022 American Community Survey (done three years ago). The U.S. owner-occupied housing stock is aging rapidly especially after the Great Recession, as residential construction continues to fall behind in the number of new homes built. New home construction faces headwinds such as rising material costs, labor shortage, and elevated interest rates nowadays. (Today’s podcast can be found here and Sponsored by Total Expert, the purpose-built customer engagement platform trusted by hundreds of modern financial institutions. Total Expert turns customer data into actionable insights that help lenders engage and guide consumers through complex financial decisions. Hear an interview with MBA Chairman Laura Escobar on her travels around the nation, mentorship, and public speaking.)

The bank is working through a list of legal issues it inherited when it bought Credit Suisse in early 2023.

Cassidy, whose experience is in multifamily, is currently HUD principal deputy assistant secretary, running the government insurer on an acting basis.

President Trump and his administration have begun to scrap new mortgage lending guidelines that made it easier for home buyers and sellers to dispute property appraisals, finding that homes owned by racial minorities are routinely valued lower than comparable homes with white owners. But despite the promised regulatory relief, many mortgage lenders say the regulatory changes will not impact their lending practices.

The legislation will prohibit credit companies from consumer’s data to third-party lenders in what advocates say is a win for consumer privacy.

The Consumer Financial Protection Bureau sent a letter to the Government Accountability Office last week criticizing a probe into the bureau’s funding request for 2025, insisting that acting CFPB Director Russell Vought has “sole discretion” to determine funding and staffing levels.

Mortgage rates are driven by movement in the bond market and bonds take cues from economic data, among other things. The monthly jobs report is routinely the most closely watched economic report as far as bonds are concerned and Friday’s caused a significant amount of bond buying (which, in turn, pushes rates down). Friday’s reaction was so big that the average mortgage lender didn’t fully adjust their rate offerings to match the market movement. This is typical of very large swings in bonds. It also meant that we merely needed today’s bond market levels to hold steady in order for rates to continue lower and that’s exactly what happened. In fact, bonds ultimately improved just a hair, but even before that, mortgage lenders were out with their lowest rates since early October. [thirtyyearmortgagerates]

Calmly Closing at Best Levels Since April

As far as post-NFP Mondays go, this was a calm one.  Bonds never strayed too far from ‘unchanged’ and managed to close at just slightly stronger levels. For MBS, this marked the best closing levels since early April, and we’re very close to the best levels since October (a fact reflected in lender rate sheets being the lowest since October). Treasury yields aren’t doing quite as well versus April’s lows (a fact that reflects the lingering impacts of tariffs and fiscal policy on Treasury-specific demand). Actionable econ data was absent, but will return on Tuesday morning with almost all the focus being on ISM Services.

Market Movement Recap

10:39 AM Flat overnight. Early gains at 8:20am. Giving gains back now.  10yr up 0.3bps at 4.225.  MBS up 1 tick (.03).

12:12 PM recovering a bit. MBS up 3 ticks (.09) and 10yr down 1.9bps at 4.202

03:39 PM Very flat all afternoon.  MBS up 3 ticks (.09) and 10yr down 2bps at 4.201

The new week is less interesting than the previous week in terms of scheduled events with the only top tier data being Tuesday’s ISM Non Manufacturing PMI. In addition, the Treasury auction cycle may be a bit more interesting than normal in light of the recent rally and last week’s quarterly refunding details (not because the details were surprising, but because they eliminated uncertainty). After a big post-NFP rally, the following Monday is always a bit of a barometer as to the market’s level of comfort in the newfound range. In that sense, we’re learning one–possibly two things this morning. On a positive note, the ground holding in bonds tells us there are no major regrets.  On a cautious note, the absence of additional gains means we need to keep an eye on the 4.20 technical level (July 1st lows) for potential resistance.