Category: Mortgage News Daily

Posted To: Mortgage Rate WatchMortgage rates fell modestly again today. Over the past 2 days, we’ve managed to undo more than a week of damage, with rates back at their best levels since September 17th. That may sound a bit more exciting than it actually is, however. Many prospective borrowers would still be quoted the same rate over the past 3 days with the improvements limited to the ‘upfront cost’ side of the mortgage cost equation. All of the above runs counter to many of the mortgage rate headlines floating around the web and airwaves today. The average headline suggests rates are as high as they’ve been in 7.5 years, followed by some iteration of ‘all hope is lost.’ OK, so perhaps not every headline put it so dramatically, but you get the idea. Why are the majority of headlines telling you one thing while I’m telling…(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 CommentaryIn the past week, we’ve seen 10yr yields rise up and over 3.06%, flirt with 3.10%+ and come back down. This has happened only one other time since rates set all-time lows in 2012 and 2016, and that was in May of this year. Granted, rates drifted just a bit higher in May, but the patterns are similar. If we line up today with the corresponding day in May, tomorrow is a huge rally for bonds. But this time around, things are different. While that won’t necessarily mean anything tremendously bad or good, it does mean that past precedent isn’t actually suggesting the big rally. Reason being: the big rally back in May was almost entirely due to the Italian political drama. In terms of similarities, in both cases, we’ve had an overabundance of traders betting against bonds. So IF bonds…(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 CommentaryIn trying to put together a chart for this morning, I kept running into a wall. It had to do with the likely outcomes associated with different Fed forecast scenarios today. To keep things simple, the 2 scenarios I’m considering are “friendly Fed” (i.e. rate hike outlook less aggressive than expected) and “unfriendly Fed” (vice versa). The paradoxical conclusions have to do with how rates will react to either scenario–especially if we’re trying to predict the reaction for both longer and shorter-term rates. At first glance, we would expect a friendly Fed to put downward pressure on both ends of the curve (i.e. 2yr and 10yr yields fall together), and indeed, that’s highly likely to be the case. This is the less variable of the two scenarios. But what about a…(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 NewsWireFreddie Mac reported today that its total mortgage portfolio increased at an annualized rate of 6.1 percent in August. The portfolio balance at the end of the period was $2.147 trillion compared to $2.136 trillion at the end of July and $2.052 trillion a year earlier. Purchases and Issuances totaled $38.413 billion , bringing the 2018 year-to-date total to $254.304 billion, Sales were ($2.569) billion and Liquidations ($26.066) billion in August and totaled ($15.442) and ($189.264) billion respectively so far this year. The annualized growth rate for 2018 through the end of August was 3.5 percent and the annualized liquidations rate was (13.5) percent. Single-family refinance-loan purchase and guarantee volume was $6.9 billion in August compared to $6.4 billion the prior month. The refinance…(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 NewsWireNew Home Sales posted a month-over-month increase for the first time since May according to Wednesday’s report from the U.S. Census Bureau and the Department of Housing and Urban Development. Sales in August rose 3.5 percent to a seasonally adjusted annual rate of 629,000 from a revised rate of 608,000 in July. July’s revision takes a little of the bloom off of the August report as July sales were originally reported at a rate of 627,000 units, already a 1.7 percent monthly loss. The August estimate however is a substantial 12.7 percent upgrade from last August’s rate of 558,000 units. Econoday noted, prior to the report release, that new home sales had failed to meet the consensus estimate of its panel of analysts for two months, and by a substantial degree. It missed again this month but…(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 CommentaryInformation received since the Federal Open Market Committee met in June August indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with…(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 improved in a somewhat noticeable way for the first time in weeks following today’s policy announcement from the Fed. Actually, to be fair and accurate, rates didn’t improve until Fed Chair Powell answered a question about inflation during his press conference, saying the Fed doesn’t see inflation “surprising to the upside.” That’s a fancy way of saying they don’t expect inflation to rise any faster than forecasts suggest. Inflation is critical to the Fed’s decision-making process–especially because we’re currently at an important crossroads. For the first time since before the financial crisis, core inflation stands a chance to make a sustained move up and over the 2% barrier. 2% is generally the line in the sand, above which the Fed is more apt to think about tightening monetary…(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 CommentaryFor a while, it looked like today would turn out to be one of those “dud” Fed days where actual market movement woefully undershoots potential market movement. The prevailing 10yr yield range of 3.06-3.09 was intact to an eerie and frustrating extent for a full hour after the initial Fed announcement (and with a big bounce on both sides to emphasize the point!). Then, in his post-announcement press conference, Powell said something that he probably didn’t think twice about, but that markets were more than willing to latch on to. In not so many words, he said the Fed doesn’t see inflation surprising to the upside. More simply put, inflation should either remain in line with expectations or lower. Bonds like low inflation, so bonds rallied. We can also assume we’re getting…(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 NewsWireOne of the more contentious provisions of the 2017 Tax Cuts and Jobs Act (TCJA) was a new ceiling on the SALT deduction. This is the amount taxpayers can deduct on federal tax returns for what is paid in state and local taxes including income, sales, and property taxes. The new limit is $10,000 where previously there was none. The increase in the standard deduction included in TCJA meant most taxpayers are better off not itemizing SALT and other Schedule A deductions and the change is also is expected to bring the Treasury an additional $36 billion in revenue this year, reaching $90 billion by 2024. However, the SALT deduction has been an important one for those homeowners of high value properties living in states where property taxes are also high and to those with second homes. George King…(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 Mortgage Bankers Association (MBA) says its Market Composite Index, a measure of mortgage application volume, moved higher during the week ended September 21 as did all of its seasonally adjusted and unadjusted components. It was the second straight week that all of the MBA indices gained ground , the first such double play since early 2016. The Component index was up 2.9 percent on a seasonally adjusted basis compared to the week ended September 14 and 2.0 percent on an unadjusted basis. The volume of applications for purchase mortgages increased 3 percent on an adjusted basis, the fourth week in a row that measure has gained ground. It was up 2 percent before adjustment. The unadjusted version was 4 percent higher than during the same week in 2017. The Refinancing Index rose 3 percent…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.