Category: Mortgage News Daily

Posted To: MND NewsWireAs analysts had predicted, both housing permits and starts recovered , albeit only slightly, in July after a poor showing the previous month. The U.S. Census Bureau and the Department of Housing and Urban Development now report that housing permits are being issued at a pace higher than in 2017, but housing starts are still lagging the earlier number. Permits for privately owned residential construction were issued in July at a seasonally adjusted annual rate of 1,311,000 units. This is an increase of 1.5 percent from the June rate of 1,292,000 (revised from 1,273,000 units). July’s permitting rate is now 4.2 percent higher than that of July 2017. Analysts polled by Econoday had predicted permits would be at a rate ranging from 1,280,000 to 1,325,000. Their consensus was slightly below the…(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 shouldn’t be news to anyone that the homeownership rate of the Millennial generation continues to be anemic. While it has improved slightly since 2015, the Urban Institute’s (UI’s) new research shows that, at that point it was 37 percent, 8 percentage points lower than the homeownership rate of Gen Xers and baby boomers at the same age. This translates into 3.4 million fewer homeowners among these 75 million young adults. UI researchers Laurie Goodman, Jung Hyun Choi, Jun Zhu, writing in the Institute’s Urban Wire blog, say that demographic and lifestyle choices, delayed marriage, increasing diversity, have played a role in the decline, it is the economic environment that has been most determinative. They cite three external factors that are hampering the generation, most of whom turned…(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: 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: MBS CommentaryFrom New York, traders have been looking east for at least some level of inspiration from Turkish market volatility. As we’ve discussed exhaustively, however, that’s far from the only game in town. Today brings fresh evidence. In looking east this morning, traders passed right over Turkey and continued on to China, where a sharp move lower in equities futures drove a moderately big sell-off in US equities futures. Bonds picked up some ” risk-off ” demand as a result, and that ultimately proved to be a good defense against a stronger Retail Sales number this morning. As the chart points out, there was a staggeringly big flattener trade just before Retail Sales. This one was actually reported on the CME’s block trade screen, so there’s no guesswork. Simply put, a big…(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 NewsWireRising concerns about costs and labor shortages continue to take a toll on home builder sentiment according to the August Housing Market Index (HMI). The Index, a joint product of the National Association of Home Builders (NAHB) and Wells Fargo, dipped another point to 67. The HMI has been moving in a narrow range between 68 and 70 since March. The index scored an 18 year high in of 74 last December and has trended lower since. The August number is the lowest so far this year. The index is a distillation of information gathered through a monthly survey that NAHB has been conducting for 30 years. New home builder members of the association are asked to provide their , perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The…(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 fell only modestly today despite a much stronger move in broader bond markets. I spend a lot of time espousing the fact that rates are based on bonds, so it’s fair to wonder how days like today happen. Indeed, interest rates are based on bonds, but there are a wide variety of rates and bonds! It’s a common misconception that mortgage rates are actually and firmly linked to the 10yr Treasury yield. In reality, this only appears to be the case because the bonds that underlie mortgage tend to move in the same direction as 10yr Treasuries. The magnitude of their moves is also generally the same, but there are notable exceptions. Today was one such exception. In terms of bond prices, 10yr Treasuries did twice as well as mortgage bonds (technically MBS or ‘mortgage-backed securities…(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 CommentaryHeadlines continue overstating the connection between US market movements and the financial drama in Turkey. Today was especially damaging to the case for correlation as Turkish Lira improved significantly even as US stocks and bond yields sank. The conventional wisdom has been arguing for the OPPOSITE relationship lately (i.e. weaker Lira pushes bond yields and stock prices lower). US markets weren’t too troubled by Turkey today. Rather, it was steep losses in Chinese stocks overnight that correlated most readily with declines in US stocks. The stock slump prompted a fair amount of bond buying demand. The trick for bonds was that traders were widely betting on rates moving higher post-Turkish-crisis. As such the unexpected buying demand set of a wave of short-covering resulting in a bit…(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: 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.