Posted To: Pipeline PressBond prices and mortgage rates, like nearly every commodity, are driven by supply and demand. I mention this because early last week prices of US government bonds declined while the yield on the benchmark 10-year Treasury note increased (although it reversed itself due to turmoil in Turkey). Investors bought $34 billion of three-year Treasury notes amid relatively soft demand, with the week bringing the first sales of Treasury notes since the Treasury Department announced it is looking to increase its borrowing in the second half of 2018 to $769 billion, a 63% year-over-year increase. Just something to keep in the back of your mind if you’re hoping for lower rates, or relying on them to help your business model. Corporate Name Changes After 17 years, Georgetown Mortgage, LLC, has outgrown…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MND NewsWireIt was another week of decline for mortgage applications as those for home purchase slid for the fifth week in a row. The overall volume of applications, as measured by the Mortgage Bankers Association’s (MBA’s) Market Composite Index, declined by 2.0 percent on a seasonally adjusted basis during the week ended August 10. On an unadjusted basis the volume lost 3 percent compared to the prior week. The seasonally adjusted Purchase Index decreased by 3 percent and was down 4 percent unadjusted. The unadjusted version was also 3 percent lower than during the corresponding week in 2017. The Refinancing Index did stabilize, remaining at the same level as the previous week. The share of total applications designated for refinancing rose 1 percentage point to 37.6 percent. Refi Index vs 30yr Fixed…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MBS CommentaryBonds began the day in moderately weaker territory as Turkish tensions eased overnight. That certainly wasn’t the only game in town as far as market movers were concerned though! On several occasions throughout the day, US bond markets could be seen moving in the opposite direction to that implied by Turkish Lira, etc. We’re left with the general sense that bond yields were pulled lower than they’d otherwise like to be by the Turkey-related drama from late last week, and that there’s a slew of reasons for them to be gradually moving back from whence they came (2.9-3.0% range). As of this afternoon, that looks to be exactly what they have in mind. 10yr yields are heading out the door up just over 2bps, trading near 2.90%. Fannie 4.0 MBS are down an eighth of a point at 101-21…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: Mortgage Rate WatchMortgage rates were sideways to slightly higher today, depending on the lender. With the exception of the past two days, this leaves us at the best levels in more than 3 weeks. In general, that move was made possible by financial drama in Turkey, but caveats abound. It’s taken a massive amount of pain in Turkish markets/currency to result in a fairly modest move for US interest rates in the bigger picture. Moreover, US rates continue paying attention to multiple sources of inspiration. Turkey was just one among many in that regard, and even then, only when Turkish market movement was its most extreme. More so than yesterday, today brought some hope that the worst is over for Turkey. While that’s good for Turkey, it’s not good for rates in the US, all other things being equal. That said, it…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MND NewsWireThe effects of Hurricane Irma continue to be felt in the Southeast, with Florida the only state to report an increase in its delinquency rate in May. The rate in the state was up 1 percentage point compared to May 2017 and gave Florida the third highest rate in the nation at 6.2 percent. CoreLogic, in its Loan Performance Insights Report, said the rest of the nation continues to improve, although Texas, still impacted by Hurricane Harvey, saw rates remain the same as a year earlier. The national rate was 4.2 percent compared to 4.5 percent in May 2017, the lowest rate for a May in 12 years and within 0.1 percent of the previous low in May 2006. The rate is also well below the pre-crisis period of 2000 to 2006 when the share of delinquent mortgages averaged 4.7 percent. Within the national number…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MBS CommentaryTurkish Lira bounced in the overnight session–not in any epic fashion, but enough to result in a bit of spillover for stocks/bonds. 10yr yields rose as high as 2.9022 before cooling back down. Notably, yields fell even as Lira maintained its token recovery. This simply reiterates yesterday’s point that US markets have their own agenda . Although they may periodically pay some attention to big swings in Turkey, they have already shown an ample willingness to trade against the grain of Lira volatility. With that in mind, the recent floor around 2.85% looks like the next major technical level for 10yr yields, whether we’re looking at US markets keeping a close eye on Turkey or not caring at all. In other words, this was a bounce that bonds had decided on yesterday, independent of further…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: Pipeline PressA Zen master visiting NYC approaches a hot dog vendor and says, “Make me one with everything.” The hot dog vendor fixes a hot dog and hands it to the Zen master, who pays with a $20 bill. The vendor puts the bill in the cash box and closes it. “Excuse me, but where’s my change?” asks the Zen master. The vendor responds, “Change must come from within.” Most believe that, despite thoughtful and continuous efforts by those in the industry, there won’t be any change coming from Congress this year, perhaps even next, on Freddie and Fannie’s status. There’s not a lot of urgency, nor is it an election issue, nor, it can be argued, are consumers being hurt by current policies and procedures. The FHFA and industry will be adjusting things as time goes on regarding guidelines…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MBS CommentaryAnother day, another chance for market watchers and pundits of all types to make mountains out of Turkish molehills. Yes, the financial crisis in Turkey is important and it’s still a thing , but no… it’s not the most important market mover for bonds or stocks at the moment. There’s only a very small possibility that it’s even the biggest risk to the global financial market. Stocks and bonds agreed today, as neither covered any special new ground despite another big drop in the value of Turkish currency. There were also some unsubstantiated headlines that caused a bit of intraday volatility–but that was mostly limited to Turkish markets. 10yr Treasuries, for instance, were unchanged to slightly weaker . Same story for MBS. Had domestic markets been taking any compelling cues…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: Mortgage Rate WatchMortgage rates stayed steady at the lowest levels in more than 3 weeks as financial markets are still accounting for additional risks relating to Turkey. Simply put, Turkey is in the midst of a debt/currency/banking crisis and investors are worried about some sort of domino effect among banks that are heavily invested in Turkish banks. All this is worth a bit of “safe-haven” demand for US Treasuries, which offer essentially risk-free returns and a liquid place to park money temporarily. When investors buy more bonds–all other things being equal–it causes bond prices to rise . When bond prices rise, investors are technically willing to accept lower interest payments, and it’s that part of the equation that speaks to lower interest rates on US Treasuries and mortgage rates. Bottom line: drama…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Posted To: MBS CommentaryDid anyone else have to sit through the drug addiction video (or was it a book?) in grade school (or was it middle school?) where the main character kept returning to this amazing fantasy of driving an exotic sports car. Each time, he had to drive farther and faster to get the same enjoyment. You get the idea. Same story for bond markets when it comes to overseas economic/political/debt drama. We need more and more in order to fuel an ongoing rally. As of this morning, we just took a hit of the same drug that made us high on Friday, and… …nothing happened. Perhaps, if the Turkish drama spirals out of control in a bigger way, bonds will be more willing to entertain a break below that white dotted line. Until then, we’re left to wonder if this little diversion has run its course. There…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.