Mortgage rates have risen every day since October 15th and some of the jumps have been fairly big.  That followed an even bigger increase earlier in the month with the whole ordeal accounting for a 0.72% increase in 30yr fixed rates since October 1st. Today’s trading session offered a break from the recent trend with bonds improving overnight and holding onto those gains long enough for mortgage lenders to improve their offerings by the smallest of margins.  In other words, rates were basically unchanged, but for the hair splitters, technically lower. The movement isn’t the interesting part of the day, however.  Rather, it’s the fact that the morning’s economic data made a case for higher rates and the bond market (bonds dictate rates) was able to stay in stronger territory nonetheless.  Part of that has to do with the data in question.  It’s not on the same level as something like next Friday’s jobs report. But part of it could be a sign that recent upward momentum in rates is starting to fizzle out.

Better Balance, Finally

In the context of the first 3 days of the week, bonds pulled off a miracle today.  Most of the yield curve managed to remain in positive territory despite both of this morning’s key economic reports coming in stronger than expected.  Markets were definitely willing to trade that data as both reports garnered a pop in yields and volumes.  Perhaps it was a saving grace that neither report was unequivocally terrible for bonds.  Both had some “yeah buts” that helped balance the response.  What’s impressive is that bonds were finally willing to have a balanced response as opposed to selling first and asking questions later.  All this having been said, the jury is out as to whether this means anything or was simply the way today’s ball bounced. 

Econ Data / Events

Jobless Claims

227k vs 242k f’cast, 242k prev

Continued Claims

1897k vs 1880k f’cast, 1869k prev

S&P Services PMI

55.3 vs 55.0 f’cast, 55.2 prev

S&P Manuf. PMI

47.8 vs 47.5 f’cast, 47.3 prev

Market Movement Recap

10:03 AM moderately stronger overnight, but weaker after econ data.  MBS still up 1 tick (.03) and 10yr still down 1.5bps at 4.224

11:57 AM Choppy, but broadly sideways and near stronger levels.  MBS up 5 ticks (.16) and 10yr down 3.8bps at 4.201

01:42 PM A bit closer to the day’s best levels.  MBS up 7 ticks (.22) and 10yr down 4.9bps at 4.19

04:15 PM Off the best levels in the after hours session with MBS up only 3 ticks (.09) and 10yr down only 3bps at 4.208

Thursday morning brought the week’s only arguably important economic data in the form of Jobless Claims and S&P’s PMIs.  Both have a decent track record of inspiring small but noticeable reactions.  Today is no exception.  Unfortunately for rates, the data was stronger and the reaction was logical.  Fortunately, there was enough of an improvement overnight to soak up the weakness.  Heading into the 10am hour, bonds are still clinging to modest gains. 

Were solid, rounded airplane windows considered “innovation”? Indiana’s Carol K. has the answer. There’s always innovation, in this case entertaining. As Finigree, which some use for interim servicing ACH payments, is rumored to be winding down operations, companies are searching for solid, innovative companies to handle borrower’s money. Here at the FAMP’s Palm Beach Mortgage Professionals Expo, smart innovation is a topic, with lenders and vendors adding smart technology to their “tech stacks.” There are overtones of politics, and interest rates are also a topic. Though mortgage rates dropped leading up to last month’s Federal Reserve meeting, they’re up this month. Data has shown that the economy remains surprisingly resilient, the consumer is spending (albeit using credit cards), housing prices continue to motor along, and unemployment is stable and relatively low. Last month, the U.S. economy added way more jobs than expected and the unemployment rate ticked down. Strength means that the Fed is in no rush to lower rates. (Today’s podcast can be found here, and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Hear an interview with LodeStar’s Jim Paolino on the advantages of public vendor pricing and how attendees can connect, and maybe even party, at the MBA Annual next week.)

Consumer Financial Protection Bureau Director Rohit Chopra said opposition to the bureau’s recently finalized open banking rule should be viewed as banks and other large firms attempting to quash competition and stymie consumer data protection.

The new chair of the Basel Committee on Banking Supervision called for member nations to finish the job of implementing post-financial crisis regulations. He also warned them not to put economic goals over safety considerations.

The deal announced on Wednesday seeks to stabilize Boston’s tax system, which relies heavily on commercial property revenue and has been thrown off balance by the slump in office demand.

The company’s earnings looked more favorable when adjusted for the one-time charge, and it reported record levels of liquidity during the quarter.

While recent homeowners overwhelmingly support digital innovation that leads to faster, streamlined transactions, AI is “still not a trusted system for many borrowers,” Cloudvirga said.

Mortgage rates have been moving two directions recently and both of them are “up.”  Only the pace changes.  Today’s pace was modest to moderate, but because we were already at the highest levels since late July, the same is obviously true for today. There were no standout market movers in play today on the economic calendar.  The bond market (which dictates rates) has simply been engaged in an ongoing attempt to move toward higher rates amid a variety of potential threats in the coming days and weeks.  To whatever extent these threats don’t materialize, there would be room for rates to recover. Threats include election-related volatility, key economic data, and the Fed’s next policy announcement. Average 30yr fixed rates quickly find themselves back near 7%.  Our index is at 6.92%, which means a majority of lenders are offering either 6.875% or 7.0%.  As always, remember that this is a broad, top tier index rate and that actual, individual scenarios can be vastly different depending on the details.