During its meeting last month, some members of the Federal Reserve’s monetary policy committee expressed concern about persistent supply chain disruptions while others were confident price growth would be constrained.

While mortgage originations increased, borrowers focused their attention on big-ticket items, as credit account balances flattened overall, Vantagescore said.

While more consumers claim they can’t tell whether now is a good time to purchase a home, over half of prospective buyers said the market is better than it was in 2024.

Minimal Movement Amid Absence of Data

It was ultimately a fairly uneventful session for bonds with the 5yr Treasury auction serving as a “sell the rumor, buy the news” event.  In other words, traders were net sellers before the auction and then waded back into the market afterward.  The wading wasn’t as pronounced as the selling, but the net effect was negligible. Fed Minutes played no notable role in volatility. From here, tomorrow’s 7yr auction can play a similar role, but there will be more economic data to digest (both tomorrow and especially Friday). The dark horse market mover may end up being month-end trading, which can create significant swings for apparently no reason at all.

Market Movement Recap

09:38 AM Roughly unchanged overnight and weaker since 9am.  MBS down almost an eighth and 10yr up 3bps at 4.476

01:11 PM Slight bounce after 5yr auction, but still down almost an eighth in MBS and still up 3.4bps in 10yr yields at 4.479

02:26 PM No reaction to Fed Minutes.  MBS and Treasuries both right in line with previous update.

Overheard in the hallways at last week’s MBA conference: “At my age, instead of a condom I carry a moist towelette in my wallet. At my age, I run into buffalo wings far more often than sex.” There is always news in our biz (like rumors of Guild and Bayview, layoffs at nCino), but the industry, age jokes aside, continues to talk about the topics that were discussed last week. A fair amount of talk suggests that Freddie and Fannie’s influence and market share is waning and moving to non-QM investors with their “can do” attitudes, although both F&F are still relevant. Fannie Mae, for example, will announce a new initiative to combat mortgage fraud in the U.S. housing market this morning. Freddie Mac recently reported that repurchases are steady. It is generally agreed that market conditions are tough, although when surveyed, 18 public builder CEOs maintain an optimistic long-term outlook for the new-home market despite a slower-than-typical spring selling season and muted traffic in the first quarter. (Today’s podcast can be found here and this week’s is sponsored by Calque. Calque provides a binding backup offer on your borrower’s departing residence to clear the existing mortgage balance and closing costs in 48 business hours or less. And it costs less than other buy before you sell solutions. Hear an interview with HomeLight’s Nick Friedman on how lenders are navigating a challenging market shaped by recession fears, rising tariffs, buyer hesitation, and the resurgence of creative tools like buydowns and seller concessions to keep deals moving.)

After starting the holiday-shortened week on a positive note yesterday, bonds are already circling the wagons and encountering some resistance. This doesn’t necessarily kill the notion of a supportive ceiling overhead, but it does confirm the broader, persistent reality: bonds will need a compelling reason for sustained improvement.  This could take the form of exceptional weakness in economic data, surprisingly tame inflation, or the seemingly impossible accomplishment of lowering Treasury issuance via fiscal policy. As for today, bonds are moving to the sidelines ahead of the 5yr Treasury auction.  There also looks to be some front-running of month-end rebalancing with risk parity trading hitting both stocks and bonds at 9:30am.

After moving moderately lower to start the new week yesterday, mortgage rates backtracked ever-so-slightly today.  Top tier conventional 30yr fixed rates remain just under 7% for the average lender.  They spent 3 days above that mark last week. Rates can move for a variety of reasons with some of the most common being surprising results in big economic reports. That was not a factor today.  Rather, as traders prepared for this afternoon’s auction of 5yr Treasuries, the rate market faced some headwinds. The securities that underlie mortgage pricing take major cues from US Treasuries. If investors are more hesitant to buy Treasuries, as they were this morning, it can put some upward pressure on all related rates. All that having been said, the pressure was small enough to be ignored in today’s case.  There will be higher-consequence economic data over the next 2 days and thus additional risk of bigger swings.

The transaction is the fourth of its type the company has done this year through the partnership it has had with Crosscountry Mortgage since late 2022.

The regulator says its prior amicus brief, which cited the Fair Debt Collection Practices Act and sided with borrowers, was no longer valid.

The Federal Reserve and several industry groups agreed to put an indefinite stay on their legal fight over the annual examination process.