Month: October 2018

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MBS RECAP: Bonds Slightly Less Interested in Stocks, For Better or Worse

Category : Mortgage News Daily

Posted To: MBS CommentaryIf there’s a theme in the bond market over the past 2 days, it’s that we’ve broken away from the previously fairly rigid correlation with stocks. That’s not to say the correlation was helping bonds move at the same pace as stocks–simply that the two had generally been moving higher and lower at the same time at almost any given moment over the past week and a half. The disconnect started taking shape yesterday when stocks set new lows for the current trend/move while bond yields were unable/unwilling to move back to their lows. Then again in the overnight session, we saw stocks level-off around 4am while bond yields continued higher. That didn’t bode well for bonds heading into the rest of the day, but fortunately, they were willing to remain disconnected even as stocks…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Mortgage Rates Edge Higher

Category : Mortgage News Daily

Posted To: Mortgage Rate WatchMortgage rates were moderately higher today as underlying bond markets continued backing away from their strongest levels in more than 3 weeks (stronger bonds = lower rates). In general, bonds’ strength had come at the expense of the stock market, but it was taking more and more drama in stocks to net the same amount of benefit for bonds. For example, even though the S&P was lower yesterday than it was last Friday, bonds weren’t able to make it back to last Friday’s levels–something they would have easily done if they were keeping a consistent pace with stock losses. With stocks improving modestly today, bonds were logically weaker. To be fair, this relationship won’t always set the tone for bonds, but it has been the biggest consideration this month. The remainder of the week brings several…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Freddie Sees Home Sales Regaining Momentum in 2019

Category : Mortgage News Daily

Posted To: MND NewsWireFreddie Mac is forecasting that there will be GDP growth of 3.0 percent in the second quarter of this year, moderating from the strong 4.2 percent growth in the first quarter. The company’s October Forecast, prepared by its Economic and Housing Research Group, now extends its predictions into 2020 and they are looking at substantial economic slowing by then. The forecast for all of 2018 is growth of 3.0 percent, slowing to 2.4 percent next year and to only 1.8 percent in 2020 “as the effects of expansionary fiscal policy fade.” Last year’s hurricanes damaged both the economy and the housing sector, but at this point Hurricane Florence is expected to create only a small dip in economic growth and cause no appreciable increase in foreclosures. The labor market picture continues to be strong with…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Weakening Home Prices Are Not a Signal for 2008 Reboot

Category : Mortgage News Daily

Posted To: MND NewsWireThe S&P CoreLogic Case-Shiller U.S. National Home Price Index for August showed an annual appreciation rate that was lower than 6.0 percent for the first time in a year. The rate fell from 6.0 percent in July to 5.8 percent in the index which covers all nine U.S. census districts. On a month-over-month basis the National Index was up 0.2 percent on a non-seasonally adjusted basis and was 0.6 percent higher than in July when seasonally adjusted. The 10-City Composite Index dropped from an annual gain of 5.5 percent in July to 5.1 percent in August while the 20-City Composite declined to 5.5 percent from 5.9 percent. On a monthly basis both indices were unchanged from their July readings on a non-seasonally adjusted basis, but each rose 0.1 percent after adjustment. Twelve of the 20 cities…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Borrower Satisfaction Products; Upcoming Events; Price Compression and High Rates

Category : Mortgage News Daily

Posted To: Pipeline PressPlenty of vendors and lenders are focused on raising capital, merging, selling, or closing. It doesn’t take a brilliant detective to see the liquidity & earnings problems facing hundreds of lenders across the nation as warehouse banks and other counterparties ratchet up scrutiny and lenders race to reduce costs. How many ducats are in the bank account versus six months ago? Winter is coming. Mortgage rates are near 2-week lows but that’s not saying much since they are coming off the highest levels since 2011. Are we having fun yet? Lender Products and Services We are in the final stretches of 2018 and goodness knows it’s been a memorable one for the industry. Between changing market demands, margin compression, and many more challenges, 2018 will be one for the history…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


MBS Day Ahead: Two Trends Suggest Risk of Resistance Bounce For Rates

Category : Mortgage News Daily

Posted To: MBS CommentaryWith bonds being flat to slightly weaker yesterday and now noticeably weaker overnight, we may be looking at our first real resistance bounce (aka “floor”) in over a week. Such a bounce makes a case for two different trends that may be emerging. Both are highlighted in the following chart. The yellow lines represent a potential downtrend. After hitting long-term highs earlier this month, there’s certainly a chance such a trend could continue a while longer if economic data disappoints this week. The teal lines represent a potential consolidation trend. In one sense, this could speak to a bit of indecision ahead of mid-term elections . But this trend would also leave enough room to be a quintessential circling of the wagons ahead of Thanksgiving weekend (it’s not uncommon to…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


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MBS RECAP: Bonds Staying Thirsty For Stock Drama–Too Thirsty

Category : Mortgage News Daily

Posted To: MBS CommentaryThe bond market has seen one too many “stay thirsty” memes. For example, “I don’t always rally for more than a few days in a rising rate environment, but when I do, it’s because of massive stock losses.” As we’ve discussed quite a few times recently (and really, any time that stock losses start pulling bond yields lower), there are diminishing returns. Bonds have a thirst that will only be quenched by significantly more abrupt panic in stocks. While today’s stock volatility might have looked like panic earlier this month , at this point in the correction cycle, it was just another day . Bonds weren’t impressed. 10yr yields were moderately higher through the morning hours, but began to recover as stocks moved lower in the afternoon. New tariff headlines…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


Mortgage Rates Stay Near Recent Lows as Busy Week Begins

Category : Mortgage News Daily

Posted To: Mortgage Rate WatchMortgage rates didn’t move today, despite a fair amount of underlying market volatility. Rates are able to weather the sorts of storms you hear about in the stock market in part due to the diminishing returns of stock market drama on the bond market. Along those same lines, the bonds that underlie mortgages specifically don’t tend to react to stocks as much as mainstream bonds like US Treasuries. Holding steady today means that rates remain at their lowest levels in just over 2 weeks. That sounds like a good thing, but the catch is that we really haven’t moved too far from recent highs during that time, and those are the highest highs in more than 7 years. The rest of the week keeps the volatility potential high . There are several important economic reports, culminating in Friday’s big jobs…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


NAR Survey Catalogs Changes in Home Buyer Characteristics

Category : Mortgage News Daily

Posted To: MND NewsWireThe National Association of Realtors® (NAR) says its 2018 Profile of Home Buyers and Sellers confirms that student debt balances are an increasing concern and that single, female buyers are still a powerful force in homebuying. The report, the result of an annual survey NAR conducts among recent homebuyers and sellers, identifies other housing trends including the rising age of repeat homebuyers, increasing levels of down payments, the difficulties faced by aspiring first-time buyers, the growing reliance by sellers on professional real estate agents, and the impact of pets on homebuying decisions. “With the lower end of the housing market – smaller, moderately priced homes – seeing the worst of the inventory shortage, first-time home buyers who want to enter the market are having difficulty…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


MBS Week Ahead: Who’s Going to Blink First?

Category : Mortgage News Daily

Posted To: MBS CommentaryCore global bond markets–led by German Bunds and US Treasuries–have been trending lower fairly reliably. For European bonds, that rally has occupied most of the month whereas the US version is only really a week old. The latter is also heavily reliant on the stock market . Here’s how all of these trends look on a chart: Breaking the charts out individually is a bit misleading. Sure, we can see that stocks and Treasuries share more correlation, but we don’t really get a sense for the magnitude of stock losses that have been required to fuel the bond rally. If we set the y-axis scaling based on September’s highs/lows, here’s how October looks by comparison: So, the question of “who blinks first” is really a question of “when will stocks blink?” In answering…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.


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