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Mortgage News Letter


Mortgage News Daily

Rates Reacted to Jobs Report, But Not Like You'd Expect
Fri, 07 May 2021 23:59:37 GMT

Once a month, the government releases the Employment Situation, also known as "the jobs report." No other piece of economic data is as consistently relevant for the bond market and, thus, interest rates. For most of the past year, the normal correlation between jobs and rates was on hold. That makes sense, of course. Initial lockdowns completely obliterated the labor market and we've been waiting to see how it would recover and how it would be reshaped ever since. In the past 1-2 months, the bond market has finally shown some willingness to react to economic reports. Notably, last month's exceptionally strong jobs numbers put obvious upward pressure on rates. Because of that, anticipation was high for this week's report. Indeed, there was a very big reaction . Economists were expecting the ...read more

Mortgage Rates Are Low and Stable, But Face Bigger Risks Tomorrow
Thu, 06 May 2021 20:35:53 GMT

Mortgage rates moved lower today, bringing the average lender to the best levels since late February. Despite the milestone, the day-over-day movement in rates has been pretty mild. Most lenders are making changes that are only noticeable in the form of upfront costs (aka "points") as opposed to rates themselves. If we use upfront costs and rates to extrapolate an "effective rate," the average movement has been 0.01-0.02% on any given day. Rates have been more likely to move lower vs higher in the past 6 days, but that creates some risks in and of itself. Market participants who trade the securities that underly mortgage rates tend to shy away from additional buying once these winning streaks get to be more than 7 days long. With all of the above in mind, our potential 7th winning day in a ...read more

Mortgage Rates Sideways Near 2-Month Lows
Wed, 05 May 2021 20:19:43 GMT

Mortgage rates were mixed today, depending on the lender. On average, rates were unchanged and remained very close to their lowest levels in nearly 2 months. The bond market (which most directly impacts day-to-day rate movement) was calm. Both of today's important economic reports came in weaker than expected, but close enough to forecasts to prevent significant volatility. Beyond that, questions remain about just how ready the bond market may be to react to economic reports in general (historically one of the quintessential reaction functions in financial markets). If bonds aren't quite ready to link back up with economic data yet, it would be an issue of timing and priorities . Several Fed speakers reminded us today that we're still a long way from even being able to assess the post-pandemic ...read more

Mortgage Rates Fairly Steady Near Recent Lows
Tue, 04 May 2021 20:52:07 GMT

Last week fired warning shots across the bow of April's mortgage rate rally. New month, new momentum? No, not just yet. In fact, we haven't seen much of anything so far this month. Last week's initial threat of rising rates quickly gave way to a move back in the other direction, but not a big enough move to suggest any major changes for mortgage lenders. In yesterday's case, rates benefited from weaker economic data in the morning. In today's case, it was a bond-friendly move at the expense stocks this morning. Stocks began losing ground due to earnings data before the bell and continued lower at the 9:30am NYSE open. Bonds don't always follow stocks, but today they did. In other words, bond yields fell in concert with stock prices. Lower bond yields equate to lower mortgage rates, all other ...read more

Moment of Truth For Rates and Housing
Fri, 30 Apr 2021 22:10:21 GMT

This week's 6.4% reading on Q1 GDP reinforced the notion of a strong economic recovery. In turn, the recovery helps to justify the sharp move higher in rates seen during the same 3 months. Rates managed to recover quite a bit in April, but ended up rising slightly this week, by some measures. Is the intermission over? The following charts offer several ways to look at the intermission (basically April's push back against the previous 3 months of significantly higher rates). Mortgage rates have outperformed other parts of the bond market even though they remain highly stratified by loan type and investor. As such, the intermission looks healthy at first glance. The 10yr Treasury yield (the quintessential benchmark of broad longer-term rate momentum) does a better job of showing this week's modest ...read more