Impacted borrowers should anticipate some breaks from insurance coverage and home loan payments, but timelines and relief funds could vary significantly.

Mortgage applications for newly constructed homes continued to increase on a year-over-year basis, as existing home listings remain constrained.

Commoditization of mortgages, plus technology that eases the refinance process, and the regulatory environment, all contributed to the decision.

Industry leaders and mortgage trade groups expressed hope that Bill Pulte’s nomination to head the agency could result in more housing supply.

Legal arguments in this case hinge on whether products offered by HEI platforms should fall under the Truth in Lending Act.

Slightly Weaker Drift, But Broadly Uneventful

Friday may as well have been a 4th weekend day for the bond market.  Volume and liquidity were obviously in holiday mode.  Trading levels were basically flat, although it might not feel that way if you’re seeing MBS prices end the day down more than an eighth of a point.  It’s unclear whether we’re seeing actual weakness at the end of the day or an incidental expression of extremely thin liquidity. Even if it’s “real,” it’s still not bad considering where we were on Tuesday afternoon.  

Econ Data / Events

Building Permits

1.483m vs 1.460m f’cast

Housing Starts

1.499m vs 1.320m f’cast

Market Movement Recap

09:37 AM stronger overnight but giving up those gains in the past hour.  MBS now unchanged and 10yr down half a bp at 4.609

01:57 PM Sideways at the lows.  MBS down 1 tick (.03) and 10yr down half a bp at 4.608

04:05 PM Weakest levels of the day.  MBS down an eighth of a point and 10yr up 0.4bps at 4.617

We’re more than halfway through January already, the MBA has lowered its 2025 projection to $2.1 trillion, and there is a sense of “wait and see” out there among lenders and vendors regarding rates, products, regulations… Maybe you should do something besides just making a few extra calls. STRATMOR’s current blog is “Leaders Don’t Wait for Markets” which may give you some tips. In 2023, 12 percent of Americans changed residences (leaving states like CA, FL, and NY), a statistic not lost on top LOs and real estate agents. Elon Musk has the luxury of being geographically mobile, putting headquarters of various companies in places like Texas, but others not so much. The statistical gap between “the haves and the have nots” is widening. Here are some statistics that are probably all too familiar with underwriters and loan originators. In 2022, almost half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF). More than one in four Americans (28%) have savings below $1,000. 12 percent said they had no savings at all. Helping someone save is a good way to lay the groundwork for future business and referrals. (Today’s podcast can be found here and this week’s is sponsored by Calque. White-labeled buy-before-you-sell solutions powered by Calque help you increase purchase volume and increase realtor business by helping them differentiate with a better process. With coverage in the 48 contiguous states, what are you waiting for? Hear an interview with RAMS Vik Kasparian on supply and demand in the mortgage asset sales space, secondary market dynamics, and current production trends.)

The US Census Bureau released its New Residential Construction report for December today.  The report measures building permits, the start of the construction process (housing starts), and housing completions. While construction has definitely been running well below the highs seen 3 years ago, it continues to operate just above pre-pandemic levels.  That’s something that can’t be said for many other housing and mortgage market metrics. Last month’s data showed housing starts closer to the low end of 2024’s range.  Today’s report shows a bounce back to the highest levels since February. The multifamily sector played the biggest role in the rebound–especially in the South which accounted for 128k additional units.  Nationally, multifamily housing starts increased by 155k units to a 12 month high of 418k and single family starts rose 34k to a total of 1.05 million.

While it would be technically accurate to point out a slight increase in January’s homebuilder confidence (officially the National Association of Homebuilders Housing Market Index or HMI ), the type of movement we’ve seen in the past 2 years is better characterized as “incidental” in the bigger picture. As with most housing-related metrics, HMI plummeted in 2022 as interest rates skyrocketed.  It’s been broadly sideways ever since with the swings between highs and lows getting smaller and smaller. In market jargon, this is a textbook example of “consolidation”–something that can signal an eventual reversal back toward higher levels or a renewed slide to lower lows.  Absent another catastrophic episode like the Great Financial Crisis, it’s not clear what would make builders feel incrementally more gloomy than the post-pandemic lows.  As such, this consolidation is widely viewed as representing some sort of lower boundary.  Time is the key variable, and one that’s likely to be determined by economic factors such as interest rates and inflation. Other highlights from this month’s NAHB data:
30% of builders lowered prices in January, which is in line with the average of the past 6 months
Average price reduction: 5%, unchanged from last month
Sales incentives were used in 61% of transactions, also in line with norms

Mortgage rates are driven by the bond market and Friday was the least active day of the week for bonds.  There were no major economic reports to cause rapid changes in trading levels. As such, mortgage rates started out very close to the levels seen yesterday and most lenders didn’t make any mid-day changes. The absence of any significant movement is a victory, of sorts, in light of the ground covered over the past 2 days (the best 2-day improvement since November). On the other hand, rates began the week at the highest levels since May 2024. It’s more common to see bigger gains when rates are recovering from long term highs–a fact that detracts from the victory to some extent. Bonds are closed on Monday for the holiday and Tuesday could see a flurry of market activity in response to political news. There’s no way to know if that activity would be good or bad for rates ahead of time, let alone if it will even materialize in the first place. [thirtyyearmortgagerates]