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Mortgage Rates Tick Slightly Higher. More Volatility in Store Tomorrow
Any recap of financial news headlines will likely mention Fed Chair Powell's congressional testimony today. Some efforts could even be made to link today's rate movement to various Powell comments, but that's not what actually happened. The real story is that bonds (which dictate mortgage rates) lost ground moderately and steadily overnight, largely due to the interconnectedness of global financial markets and the fact that European bonds were having an even worse day. By the time the sun was up in the U.S., bonds were basically done moving for the day. None of Fed Chair Powell's comments made any difference, nor did he say anything we haven't already heard in his past few appearances. When bonds are weaker, rates move higher, all other things being equal. As such, it's no surprise to see a modest increase in average mortgage rates, but not one that's big enough to lose much sleep over. Things could move higher or lower in a much bigger way tomorrow following the release of the Consumer Price Index (CPI) data at 8:30am ET. As is always the case with big economic reports, there's no way to know if the reactions will be good or bad. Additionally, there's always some chance that the data "threads the needle" and matches expectations closely enough that we see fairly minimal movement by the end of the day. All we can do on the eve of such reports is to call attention to the potential for volatility.Source: Mortgage News Daily | 11 Feb 2025 | 8:14 pm
DPA Tools; MBA Home Equity Study; Training and Webinars This Week; SISA Loans Back With Lenders
Hah! Just kidding… But did you think, “Oh no!” or “Yippee!” when you saw that subject line? The ups and downs of the Consumer Finance Protection Bureau, an agency that touches mortgage debt, credit cards, credit bureaus, and cash substitutes, is all the talk at the TMBA in Houston. One industry vet wrote me saying, “As much as we all complain about regulation through enforcement, at least there was an ‘adult in the room’ telling us to eat our vegetables. As a colleague of mine said, ‘I have seen this movie before, the popcorn is great but the ending sucks.’” Today at noon, PT, 3PM ET, Capital Markets Wrap, presented by Polly, will be covering the turmoil at the CFPB, the impact on TRID/ATR enforcement, tariffs and inflation, and the misconception that regulations will disappear without legislative change. Don’t forget that OMB Director Russell Vought was hit with two union lawsuits after he issued directives freezing much of the CFPB work and work tasks. Is reading attorney Brian Levy’s Mortgage Musings a work task? Folks at the CFPB have to figure that out, but others can decide for themselves whether to read Levy’s latest about the CFPB shutdown. (Click here to view prior editions and to subscribe for free.) But wait… there’s more! A U.S. judge on Monday ordered the Trump administration to fully comply with a previous order lifting its broad freeze on federal spending: another court order. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. Originators who leverage their Marketing Solutions as part of their customer retention practices have seen their pipelines increase by up to 4 times when compared to traditional lead generation methods. Hear an interview with Logan Finance’s Nick Pabarcus on the 2025 outlook for non-QM, how those loans are priced, how the anticipated rate environment will impact non-QM business, and the future of Non-QM products.)Source: Mortgage News Daily | 11 Feb 2025 | 4:49 pm
Bonds Retreat to Recent Range Ahead of Auctions, Powell, CPI
With Tokyo closed for a holiday, overnight Treasury trading was limited to futures markets until 2am ET. Yields opened about 1bp higher in Europe and then drifted gradually higher into the US session. Bearish impulses came primarily from European bond market weakness amid a glut of EU sovereign debt auctions. At home, the path of least resistance has been to follow the selling trend ahead of 3 days of US Treasury auction supply, Powell's congressional testimony (today and tomorrow), and tomorrow's fairly critical CPI data. Losses are moderate with 10yr yields up only 3.6bps, right back to the "just over 4.50%" levels seen from Jan 27 through last Tuesday.Source: Mortgage News Daily | 11 Feb 2025 | 4:10 pm
Little Changed After Early Rally and Steady Selling
Little Changed After Early Rally and Steady Selling Monday ended up being a relative non-event for the bond market. Trading was almost perfectly flat overnight. Big trades moved the whole pile right at the open and then again about 2 hours later. This effectively set the range for the rest of the day through the 3pm CME close. Tariff headlines had zero impact on bonds overnight, despite a token, fleeting impact on forex. Market Movement Recap 10:17 AM Flat overnight and slightly stronger now. MBS up 3 ticks (.09) and 10yr down 2.6bps at 4.466 12:59 PM 10yr down 0.2bps at 4.49, and MBS now back to unchanged. 03:15 PM Treading water at weakest levels. MBS unchanged and 10yr up half a bp at 4.497Source: Mortgage News Daily | 10 Feb 2025 | 9:21 pm
Mortgage Rates Microscopically Lower to Start New Week
Mortgage rates have been on a vacation from volatility since January 16th when they fell back toward 7% after hitting the highest levels since May 2024. Top tier 30yr fixed rates have operated inside a 0.13% range since then and a narrower 0.08% range for the past 2 weeks. Today was technically a win, but it was fairly small (-0.02%). Any time our daily index is that close to the previous day, it's safe to assume that most lenders are effectively unchanged. Rates are definitely still willing to react to major economic reports when results fall far from forecasts, but there were no such reports on tap today. The same is true for tomorrow, but volatility is still a moderate risk due to Fed Chair Powell's semi-annual congressional testimony. Then on Wednesday, volatility potential increases significantly with the release of the Consumer Price Index (CPI), which is the first of the two big inflation readings for any given month. Inflation is always a consideration for interest rates, but it's particularly important at the moment as investors wait for evidence that progress toward the 2% has resumed after potentially stalling at just over 3% last summer. While the annual inflation number will benefit in the coming months as the high inflation readings from early 2024 fall out of the calculation, those benefits wouldn't show up in earnest until June.Source: Mortgage News Daily | 10 Feb 2025 | 8:24 pm
More Tariff Headlines But Stocks and Bonds Are Both Stronger
Perhaps the most notable market-related headline over the weekend was Trump's pre-announcement of 25% tariffs on steel and aluminum (in addition to existing tariffs). The comments were made on Sunday well before the market opened, and while there was an initial pop in forex markets at the open, it was almost immediately erased. Bonds were completely unaffected and are trading in just slightly stronger territory to start the week. There were some big block trades right at the 8:20am open but even bigger trades in the other direction around 10:45am ET. There is no major econ data today and it wouldn't be a surprise to see traders play it closer to the vest ahead of Wednesday's CPI data. Tomorrow's Powell testimony is also possibly a wild card, but not on the same level of CPI in terms of volatility potential.Source: Mortgage News Daily | 10 Feb 2025 | 5:02 pm
Minimal Selling Leaves Focus on CPI
Minimal Selling Leaves Focus on CPI The first order of business this morning was to reconcile the weaker NFP reading with the seemingly illogical bond market sell-off. That was easy enough to do by the time we considered the solid drop in unemployment along with the big revisions to the past 2 months of payrolls. It was all the more palatable due to the modest size of the sell-off (especially modest as far as jobs report days are concerned). Thanks to the rally earlier in the week, bonds are still set to end the week at slightly stronger levels. Bottom line, volatility is minimal. Next week's CPI is the only other report that can hold a candle to NFP when it comes to rocking the bond market's boat. Econ Data / Events Nonfarm Payrolls 143k vs 170k f'cast, 256k prev, revised to 273k Unemployment Rate 4.0 vs 4.1 f'cast, 4.1 prev Participation Rate 62.6 vs 62.5 prev Consumer Sentiment 67.8 vs 71.1 f'cast 1yr inflation expectations 4.3 vs 3.3 previously big jump on tariff fears Market Movement Recap 08:48 AM First move after NFP is weaker. MBS down 5 ticks (.16) and 10yr up 3.7bps at 4.478 10:57 AM off the weakest levels after Trump's reciprocal tariff headlines. MBS still down a quarter point and 10yr up 4.8bps at 4.489 01:05 PM Classic PM sideways fizzle in progress. MBS still down a quarter point and 10yr drifting sideways just under 4.50.Source: Mortgage News Daily | 7 Feb 2025 | 8:00 pm
Mortgage Rates End Week Lower Despite Friday's Modest Bounce
Friday brought the release of the big jobs report which is historically more likely than any other monthly economic report to cause the biggest pops or drops. Today's installment can be filed under the "pop" category, but it was so quiet, you might not even hear it. In fact, the drop in rates seen earlier in the week ended up being slightly bigger. It resulted in a 0.06% move lower in the average lender's top tier 30yr fixed rate while today's jobs report only caused a 0.03% move in the other direction. The net effect is an average 30yr fixed rate that remains just barely over 7%. Despite the relatively small movement today, it's plain to see that rates continue to favor reacting to economic data rather than news headlines. With that in mind, next week brings the only other economic report capable of competing with the big jobs report for volatility potential: the Consumer Price Index (CPI). CPI is the first of the two major inflation indices released by the government. Inflation is being watched very closely right now. The Fed has repeatedly stated it is comfortable with where the labor market is at, but needs to see more progress on inflation to resume rate cuts. Mortgage rates have a complicated relationship with the Fed Funds Rate over shorter time horizons, but they'd definitely move lower if inflation surprised to the downside next Wednesday.Source: Mortgage News Daily | 7 Feb 2025 | 5:55 pm
Compliance, Non-Del Products; Lender's Growth in '25; Chatbot Perspective; MBA's Marcia Davies Interview
“The San Diego Padres visited an orphanage in Mexico. ‘It's really sad to see their faces with no hope,’ said Juan, age 9.” In other San Diego news, Optimal Blue wrapped up its Industry Summit this week. As with many events, the talk in the hallways was nearly as important as the actual sessions. The California fires were a topic, and this month’s piece in STRATMOR is titled, “Natural Disasters and Economic Resilience.” There were certainly conversations about data protection, state licensing flexibility and remote work, and remote online notarization. OB launched many new products, interestingly, at no incremental cost to their clients! Skateboarder Tony Hawk (age 56) was even there. Also of interest, of course, is the general business climate. Many have seen locks pick up somewhat in recent weeks. According to Curinos' new proprietary application index, refinances increased 15 percent week over week and decreased 39% in January; the purchase index increased 15% week over week and decreased 33% for January as a whole. January 2025 funded mortgage volume increased 27% YoY and decreased 21% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (Today’s podcast can be found here and this week’s is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Hear an interview with the MBA’s COO Marcia Davies on how the MBA and mPower are helping the industry stay on track and lead the industry.)Source: Mortgage News Daily | 7 Feb 2025 | 4:51 pm