Does anyone pay with cash anymore, or actually have the money in their bank account? Credit card debt is now $1.1 trillion. There is even a credit card just for automotive repairs! With those “Buy Now Pay Later” arrangements being added to the FICO reports, MLOs are asking, “What are delinquencies like? Will these add to, or subtract from, my pool of eligible borrowers? To the surprise of no veteran LO, it turns out that nearly half have experienced payment problems. Want to do a client with a high credit card balance (and paying 28 percent on it) a favor? Of course you want to put them into a cash out refi, but if that doesn’t work, for $1 have them join American Consumer Council which gives them access to membership in normally off-limit credit unions. Some, like UFCU in Austin, will accept transferred balances into an account where the rate can be only 9.9 percent. Hmmm… 9.9 versus 28. (Questions can be directed to UFCU’s Michael Jones.) (Today’s podcast can be found here and this week is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Today’s has an interview with Covius’ Pete Pannes on how M&A is shaping the title industry across firsts, seconds, and defaults.) Products, Software, and Services for Brokers and Lenders

Friday’s mortgage rates ended up being right in line with Thursday’s on average.  At 6.72%, the MND daily rate index is as low as it’s been since early April when it hit 6.60%. If you’re thinking that 6.72 doesn’t sound much higher than 6.60, you’re right!  Mortgage lenders tend to offer rates in 0.125% increments, so we’re really only one notch away from those lows.  After that, we’d need to go all the way back to October to see anything lower. While the mortgage market can languish sideways for weeks without moving outside a 0.12 range, there are also more than a few examples of that much movement in a single day, provided the news is sufficiently inspiring. The catch is that the movement could occur in either direction.  In a general sense, the recent improvement has been a byproduct of slightly softer economic data and inflation. There are key reports that speak to those metrics over the next two weeks.  Rates have more room to fall if the data shows a continued softening, but could spike abruptly if employment surges or tariff-driven inflation actually materializes. 

New Home Sales fell sharply in May according to the latest report from the U.S. Census Bureau and HUD. After a brief surge in April, the seasonally adjusted annual pace dropped to 623,000—down 13.7% from April’s revised reading of 722,000 and 6.3% lower than the same month last year. When last month’s data originally came out, the annual pace of 743k was the highest in several years. The drop brings sales activity back in line with late 2023 levels. While it’s not uncommon to see volatility in this data series, the sharp monthly decline is still notable, especially considering the downward revision to April’s numbers. Inventory rose modestly to 507,000 homes, which at the current sales pace represents a 9.8-month supply—up from 8.3 months in April and 8.5 months a year ago. That’s the highest months’ supply figure since late 2022, and one of the highest in more than a decade. The median price rose to $426,600 in May, a 3.7% increase from April and 3.0% higher than a year ago. The average price rose 2.2% on the month to $522,200, up 4.6% year-over-year. Both measures are now back near the recent highs seen in late 2022. Regionally, the decline in sales was led by the South and West, while the Northeast and Midwest held steadier by comparison.
Northeast : 27k (up 4k from April)
Midwest : 82k (down 2k from April)
South : 365k (down 113k from April)
West : 149k (down 9k from April)

The two government-sponsored enterprises are repositioning Common Securitization Solutions to align with priorities set by their regulator and President Trump.

The 30-year fixed rate mortgage is below 6.8% for the first time since May as the 10-year Treasury moved lower with the headlines of the past week.

While consumer distress in auto and personal loans also picked up, the pace of growth among mortgages was atypical, Vantagescore’s monthly credit gauge said.

HUD officials outlined a number of key changes to its manufactured housing programs including eliminating the chassis requirement.

The department’s move is the latest HUD decision aligning with the Trump administration’s deregulatory strategy that targets many ESG programs.

“I’ve been experimenting with breeding racing deer. People have accused me of just trying to make a fast buck.” There are no fast bucks to be made in residential lending, and the correct compensation is a continuing topic. (A recent STRATMOR blog was titled, “Compensation is Still Lender’s Largest Expense.”) A veteran LO wrote, “My belief is that most LOs can make the same amount of money with lower rates and lower comp: grow their business and have less drama. LOs state they lose 3 out of 10 loans due to rate. If you make 100bps on 7 loans at $350k per loan, that’s $24,500. If you make 70 bps on 10 loans at $350k per loan, that’s $24,500. Most business, however, is done in communities, and as you do more loans your community grows, and you get more opportunities. It also eliminates a lot of stress of quoting when you win the deal on the quote.” Today two great webinars: The MBA is producing, “Can You Pay That? Navigating LO Compensation, Competition, and Compliance in 2025” at 2PM ET, and “The Big Picture” at 3PM ET featuring Meredith Whitney, “The Oracle of Wall Street.” (Today’s podcast can be found here and this week is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Today’s has an interview with Optimal Blue’s Sara Holtz on how Optimal Blue approaches marketing as a market leader, keeping pace with product innovation, evolving with industry needs, and charting the future of strategic brand engagement.)

After topping out on May 21st, the average day for mortgage rates has been a good one.  This has been especially true since June 6th with our 30yr fixed index moving down almost 0.25% through this afternoon. Today’s gains contributed nicely with a drop of 0.07%. Normally, we’d point to the economic release calendar to help explain this sort of momentum.  There were numerous reports out this morning and several of them could be viewed as helpful for rates.  But when rates move lower in response to economic data, we tend to see at least some semblance of weakness in the stock market–even if only briefly–and that was nowhere to be found.  The implication is that the market is broadly shifting to expect a lower path for the Fed Funds Rate (something that would help both rates and stocks).  It’s always good to remember that the greater number of days in a mortgage rate winning streak, the greater the odds of a bounce.  Sometimes that only means a single day moving modestly higher.  Other times, the rate market hits a short term floor and moves back up into its recent range for a while. There is absolutely no way to know which sort of bounce the next one will be, only that it grows slightly more likely with each passing day of victory.  Note: our winning streak is at 5 days currently, and we don’t tend to call attention to these risks until we hit 8 days.  Some of the longest streaks go more than 10 days.