Posted To: MBS Commentary

The bond market has a lot on its mind right now. 2019 is proving to be very different from other episodes of big, protracted rate trends. In most past instances, we can point to 1 key theme driving the momentum, with a few occasional supporting actors. Things are more complex and nuanced this time around as the usual suspects for rate inspiration seem to be taking turns in the driver's seat. This week (and perhaps last week, to some extent), Brexit is definitely in control. News of a new potential deal hit bonds overnight, but we bounced back after subsequent news that it would have a hard time getting enough votes to make it through Parliament in a special session this Saturday. Much of the brexit-related volatility was playing out right as this morning's economic data hit. Was this...(read more)

10/17/2019 2:24:09 PM

Posted To: Mortgage Rate Watch

Mortgage rates didn't do much today, but risks are increasing that movement will be more brisk in the coming business days. Blame European politics--specifically: Brexit. This isn't the mortgage rates' world first go-round with the U.K.'s lengthy process of exiting the European Union (aka "Brexit"). In fact, Brexit was the single biggest factor that helped drive rates down to the long-term lows seen in 2016. For most lenders, those rates were close enough to the all-time lows seen in 2012. The fact that they were available in the middle of the summer homebuying season only made things better for the housing market. Thanks Brexit! More than 3 years later and the U.K. is set to run into yet another deadline for its divorce from the EU. This one has been on the radar for months, but it's been...(read more)

10/17/2019 1:40:00 PM

Posted To: MND NewsWire

After posting some of the best results in a year the previous month, all three construction indicators fell back in September . The U.S. Census Bureau and the Department of Housing and Urban Development said housing starts and completions of residential units were especially weak as were the numbers posted in the Northeast. Permits for residential construction declined by 2.7 percent from the prior month for a seasonally adjusted annual rate of 1,387,000 units. The previous estimate of 1,419,000 permits in August was revised up to 1,425,000. The September estimate leaves the permitting rate up 7.7 percent from the September 2018 estimate of 1,288,000 units. Analysts had expected permits to move lower after the 7.7 percent monthly jump in August. Those polled by Econoday were looking for results...(read more)

10/17/2019 8:20:16 AM

Posted To: MBS Commentary

Yesterday saw a swath of Brexit headlines spark unavoidable bond market weakness just as a weaker reading in the important Retail Sales report suggested a rally. Offsetting penalties, back to the line of scrimmage! Bonds ultimately ended green on the day, but that was largely made possible by the heavy losses from Tuesday's session (brexit-driven as well). Heading into today, Brexit continued to hog the spotlight as far as global markets and US Treasuries were concerned. News of a NEW and potentially viable deal hit hard overnight with GBP (British Pounds Sterling) and EU bond yields surging higher. Treasury yields were pulled along for the ride in heavy volume. 10yr Treasuries hit their highest yields in just shy of a month (Sept 19th was higher, but just barely). Doubts began to emerge...(read more)

10/17/2019 7:34:30 AM

Posted To: Pipeline Press

52% of Agency biz (e.g., Freddie and Fannie) is first-time home buyers. Over at HUD, according to the Mortgage Bankers Association (MBA), first-time home buyers account for more than 75 percent of FHA home purchases. FHA & VA continue to evolve – more below. Lender Services and Products “New! Freedom Mortgage Wholesale’s FHA Condo Single Unit Approval program allows for approvals of individual condo units meeting certain eligibility requirements even if the condo project is not FHA approved! Freedom Mortgage Wholesale is the right choice for a fast and easy FHA Condo approval. Relax - we coordinate the collection of all condo project information for you. Additionally, Freedom Mortgage will absorb any fees associated with Condo Questionnaire requests. Join us for FHA Condo...(read more)

10/17/2019 6:57:40 AM

Posted To: MND NewsWire

The 30-year note rate on closed mortgages fell to 3.93 percent in September, down from 4.07 percent in August, and along with the decline, the ninth in as many months, the share of refinances crept close to half of all the month's originations. Ellie Mae's September Origination Insight Report said the refinances rose 6 percentage points to a 49 percent share. Purchase loans thus accounted for the lowest portion of closed loans since March 2015. It was the first month that conventional loans were dominated by refinancing. It accounted for 55 percent of the total as purchases dropped to 35 percent. Refinances made up 28 percent of FHA transactions, up from 27 percent, and the refinance share of VA loans rose 3 points to 37 percent. The distribution of all transactions among loan types shifted...(read more)

10/17/2019 6:03:56 AM

Posted To: MBS Commentary

There was a bit of a giveaway in this morning's commentary, titled " Brexit Headlines vs Retail Sales ." Indeed, it's "Brexit headlines" that answer the question in the most recent headline. In other words, bond markets at home and abroad (but especially abroad) were focused on moving higher in yield this morning in response to Brexit headlines. One notable example hit just before the Retail Sales data came out. A reading of -0.3% vs a forecast of +0.3% is a fairly meaningful miss for this data series and certainly worth more improvement in bonds than we saw. But because of the upward pressure created by the Brexit reaction, all we got was ground-holding while European yields continued higher. In fact, once traders made their Retail Sales trades, US yields went a...(read more)

10/16/2019 4:31:09 PM

Posted To: Mortgage Rate Watch

Mortgage rates improved modestly today, depending on the lender. Some lenders moved rates higher yesterday due to deterioration in the bond market. Others simply planned to adjust for market conditions this morning. If we look at the last 3 days altogether, however, it's easier to characterize rates as being right in line with the highest levels in nearly a month. Volatility remains a risk in the near-term future, but not for conventional reasons. Normally, economic data and Fed policy would be responsible for the biggest moves in the bond market that underlies mortgage rates. At the moment, however, geopolitical risks and US/China trade policy updates can have an impact that's just as big. There was fresh evidence of this today when Brexit-related updates offset the influence of a key piece...(read more)

10/16/2019 4:01:00 PM

Posted To: MND NewsWire

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which has held in the mid-to-upper 60 range since May, finally got moving this month. The Index, a measure of home builder confidence in the market for newly constructed houses, jumped up 3 points to reach 71, the highest level since February 2018 . NAHB Chair Greg Ugalde said, "The housing rebound that began in the spring continues, supported by low mortgage rates, solid job growth and a reduction in new home inventory." "The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months," said NAHB Chief Economist Robert Dietz. "However, builders continue to remain cautious due to ongoing supply side constraints...(read more)

10/16/2019 8:30:30 AM

Posted To: MND NewsWire

While a lot of attention is now focused on Millennials, the country is still aging. A new report from the Harvard Joint Center for Housing Studies looks at how the growing population of elderly is poised to change the characteristics of homeownership and the need to prepare for the ramifications. The first part of the report, Housing America's Older Adults 2019 , details the aging of the population as Baby Boomers increasingly reach retirement age - the leading edge of the second largest generation in history is now 73 years old - and where and with whom they reside. The number of households headed by persons 65 years of older increased from 27 million in 2012 to 31 million in 2017. The next younger age cohort, those aged 50 to 64 grew only by 770,000 to about 35 million. Over the next 20 years...(read more)

10/16/2019 8:01:22 AM