Category: Mortgage News Daily

Posted To: MND NewsWireMortgage application activity continued to shrink during the week ended November 9. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage application volume dropped by 3.2 percent on a seasonally adjusted basis when compared to its level on November 2. The index has declined by an aggregate of 9.7 percent since it posted its last increase back on October 19. On an unadjusted basis the index was down 5 percent. The Purchase Index also continued its downhill trend, decreasing 2.3 percent on an adjusted basis to its lowest level since February 2017. The unadjusted Purchase Index fell 5 percent week-over-week and was 3.0 percent lower than the same week in 2017. The Refinance Index decreased 4.3 percent from the previous week to an 18 year low (December 2000)….(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 are actively trying to decide who they are and what they want to do with their lives. Will they be barometers of economic growth and inflation? Or will they be gauges of Fed bond buying and US government bond selling (supply and demand)? The answer is “yes” on both accounts, but as is often the case–especially when yields have been holding at lofty levels–there’s a bit of uncertainty as to how much of the future is already priced-in. Put another way, in a rising rate environment where the reasons for the weakness are well known and well anticipated, bonds increasingly ask “are we there yet?” Today brings a fresh update on one of those “reasons for weakness” in the form of October’s CPI data. Inflation has also been holding near post-crisis highs…(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 CommentaryCPI (the Consumer Price Index) has been the most relevant economic report on the horizon since the balmy NFP report from 2 weeks back. Reason being: NFP contained a strong wage growth component, and that always generates some fear among bond traders that higher wages will translate to higher inflation. Economists aren’t exactly expecting a big uptick in tomorrow’s CPI data, but that’s precisely why it’s been something of a risk. In other words, if CPI were to come in much stronger than expected tomorrow morning, it could dampen spirits in the bond market. Of course CPI could always come in weaker too–which would cast even more doubt on the ability of wages to translate to inflation in the current economic cycle. It’s not that it hasn’t been happening, just that it hasn’t…(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 CommentaryAs of last Thursday, it didn’t look like traders were much interested in hearing arguments in favor of bonds. Then, an unexpectedly healthy little rally on Friday kept hope alive going into the 3-day weekend. Now this morning, the week begins with yields a few bps lower still. 10yr yields begin the week below the middle Bollinger Band (a 21-day moving average that serves as a sort of dividing line between a majority of buying and selling sprees. As can be seen in the most recent dip below (middle yellow line), sometimes the buying sprees are short-lived when we’re in the midst of a longer-term uptrend in rates. Momentum technicals (the stochastic oscillators at the bottom of the chart) are also in pretty good shape , with a potential bounce shaping up in shorter-term momentum. The message…(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 PressPeople vote with their feet. Some population movements are dramatic and garner headlines around the world, others not so much. “About 130,000 more residents left California for other states last year than came here from them…” according to a Sacramento Bee review of the latest census estimates. “They most often went to cheaper, nearby states — and Texas. Since 2001, about 410,000 more people have left California for Texas than arrived from there. That’s roughly equivalent to the population of Oakland.” Perhaps some of those vacated houses will be purchased by Zillow who the Houston Chronicle is telling us is launching a service called Zillow Offers early next year in Houston. Zillow will be making cash offers on homes from qualified sellers and then…(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 may be that California, where home prices have exploded over the last few years, has jumped the shark when it comes to affordability. CoreLogic’s Andrew LePage writes in the company’s Insights blog that September home sales in the state were the lowest in the country since September2007. The sales report comes in the wake of reports from several sources showing an abrupt slowdown in home price growth in many of the state’s largest metros. CoreLogic says the state’s annual gain of 4.1 percent in the median home price statewide was the lowest in more than two years. Coupled with higher mortgages rates, the lack of affordability appears to, in LePage’s words, have knocked some would-be buyers to the sidelines, unable or unwilling to buy. Sales do historically fade in September as school starts…(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 by what could only be described as a token amount today. In other words, we’re not talking about any major changes. In fact, mortgage rates themselves will be unchanged from Friday for almost any scenario. As is so often the case, we can only measure the change in terms of “effective rates” (which take upfront costs into consideration). In general, changes in mortgage rates are reserved for big market moves whereas upfront costs and effective rates allow for smaller changes in the overall cost of financing. The bond markets that underlie mortgage rates were closed yesterday for the Veterans Day holiday. In the meantime, the stock market lost ground rather abruptly . At times, bonds (rates) will take cues from stocks–especially when the latter is making a big move lower…(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 CommentaryInteresting day today… It began with a decent overnight rally, mostly led by European bond markets. The first big speed-bump came at 8:30am with the Producer Price Index coming in much hotter than expected. Normally, PPI isn’t much of a market mover except in the case of BIG beats/misses. This one fit the bill. Bonds sold-off initially . That much was to be expected, but there would they end the day? The possibilities were endless considering yields were already fairly close to long-term highs. Instead, the 9:30am NYSE open brought a healthy dose of bond buying and a moderate amount of stock selling. European trading continued to play a role until noon when bonds went completely silent ahead of the 3-day Veterans Day Weekend, but not before 10yr yields fell more than 5bps and Fannie 4…(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 PressWhether bond loans (we all know how management loves those), non-QM, reverse mortgages, or high loan to values, originators everywhere are working hard for their borrowers and being creative in a compliant manner. For example, from Minnesota Eric Otterness writes, “Recently my team and I closed on a loan for a first-time buyer in Minneapolis where we had eight down payment assistance programs layered on top. I’m pretty sure that $86,000 on a $190,000 house is a new world record! It was fun and I doubt it has ever been matched or will ever be beaten. If anyone knows of a transaction where there were more, let them come forward and we will stop claiming the new world record!” Lender Products and Services Mr. Cooper Correspondent is excited regarding the pending acquisition of…(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 CommentaryBetween the mid-term elections earlier this week and the simple tradeflow move following the Fed yesterday, bond markets have had their chance to make any necessary adjustments before the next big data point coming up next week. CPI (the consumer price index) isn’t the be all, end all market mover, but it’s important right now because it has a chance to confirm or reject the notion that the strongest wage growth in a decade will actually translate to an uptick in prices. If we’re to believe this morning’s Producer Price data, consumers should certainly be prepared to pay more. If CPI continues in a 2.2-2.3% year over year range (at the core level), that would actually be a bond-friendly development. It would mean producers aren’t able to pass on their higher input costs…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.