2014 Was a Tremendous Year for Mortgage Rates

Posted To: Mortgage Rate Watch

Mortgage rates drifted just slightly higher today amid extra quiet trading conditions. Bond markets (which include the mortgage-backed-securities that dictate mortgage rates) close early today and are fully closed tomorrow for the New Years holiday. Banks and mortgage lenders will also be closed, but almost all will be open on Friday. Keep in mind that when banks are closed, lenders don’t release new rate sheets and mortgages can’t be locked. As for today’s movement, it does little to change the bigger picture. Top tier scenarios are still easily in the high 3’s with 3.875% being …read more

MBS MID-DAY: Heading Out At Best Levels; This Might be a Recap

Posted To: MBS Commentary

In the same vein as December 26th, this Mid-Day report might end up standing as the Recap due to the stability of the day's range and the mere 90 minutes left before the early close. Bond markets were steady-to-slightly-stronger overnight and market participation remains understandably low. In fact, it's in the running for the slowest day of the year. All that means is that any big moves could cause more momentum than they otherwise might. In that regard, all we'd really care about would be a big, unexpected snowball sell-off, but at this point it looks …read more

Pending Home Sales Stable but Promising

Posted To: MND NewsWire

November’s pending home sales improved from October levels and posted the third consecutive year-over-year gain and the largest one in over a year. The National Association of Realtors® (NAR) said the increase, while not large, was felt in every region but the Midwest. The NAR’s November Pending Home Sales Index (PHSI) was up 0.8 percent from October’s slightly down-graded level of 104.0 to 104.8. That was a 4.1 percent gain from the PHSI of 100.7 in November 2013, the largest such improvement since August 2013 when the index jumped 5.6 percent. The PHSI is a forward …read more

MBS Day Ahead: Not Another Crappy ‘Year-in-Review’

Posted To: MBS Commentary

The only thing more tedious than of my technical explanations are those journalistic elements that you just KNOW are coming. Let me explain. Imagine a thief steals a bunch of watches, is unable to sell them, and subsequently returns them. In that case, you know it won't be long until every news headline is some iteration: Thief Unable to Live on Borrowed Time, etc. More germane today would be the tendency to tie article headlines and themes into recurring events, such as holidays. You know how those go. Markets are spooked on Halloween, Originators are thankful …read more

Another ‘Top Five’ Day for Mortgage Rates

Posted To: Mortgage Rate Watch

Mortgage rates fell today . The move wasn’t big, but it was enough to claim the 5th best spot of 2014 . The 4 other days were consecutive and began on December 12th. While this is a positive turn of events, it’s not the product of any great determination on the part of market participants. That’s easy enough to see due to the fact that market participants are largely absent relative to non-holiday weeks. Perhaps even more interesting than today being a “top 5” day is that it fully erases the small spike in rates …read more

MBS RECAP: Bond Markets Fade Toward Unchanged Levels After Stronger Start

Posted To: MBS Commentary

Unlike most Tuesday's, today actually saw a decreased level of participation in bond markets. Presumably this is due to yesterday offering more relevant inspiration (Greek election failure) and the impending New Year holiday. On that note, keep in mind that bond markets close early tomorrow (2pm) and are generally expected to be slow from the outset. Historically the 31st of December is less busy than the previous trading day, and that's especially true when it falls on a Wednesday-Friday. As for today's action, it was clearly less than intense, but offered a good mix of pleasure …read more

MBS MID-DAY: Last Week’s Sell-Off Now Fully Erased

Posted To: MBS Commentary

Trading conditions continue to be slow during these holiday weeks. This greases the skids for bigger movements regardless of motivation. Last Wednesday saw significant weakness, and while it was most easily chalked up to the strong GDP reading, we already discussed ( HERE ) why and how that wasn't the case. The bright side to that weakness is that it flushed out sellers (or rather, rolled them up in its snowball). The result has been slow, steady gains ever since, with a bit of a shot in the arm from yesterday's Eurodrama. I would note though, …read more

MBS Day Ahead: Ghosts of Grexit Past a Blessing for Rates in the US?

Posted To: MBS Commentary

'Grexit' was an overused term–mostly in 2012–that referred (shockingly) to a “Greek exit” from the Eurozone. I hate overused fad jargon just as much as the next person, but even I gave in. In fact, it was more like 'in for a dime, in for a dollar” in this mid-June post which now incidentally serves as an excellent and quick history lesson for the current round of Eurodrama. Please read it HERE if you're at all interested in what's moving markets these days. Fast forward to today, and Tsipras is back–now poised to be elected president. …read more

Mortgage Rates Chip Away at Recent Weakness

Posted To: Mortgage Rate Watch

Mortgage rates continued chipping away at the moderately abrupt increases seen last week. Today’s gains were indirectly a result of political instability in Greece. After Greece’s parliament failed to elect a new President, the country will be forced to hold a new national election. The frontrunner is an advocate of Greece exiting its bailout agreement. At best, this has growth implications for the Eurozone. At worst, it could be broadly destabilizing. When such things happen in Europe, the strongest countries with the soundest sovereign debt end up coming out ahead. The benchmark for European bond …read more

MBS RECAP: Still in Holiday Mode, Bond Markets Improve on European Drama

Posted To: MBS Commentary

Nothing happened this afternoon to add any information or market momentum already in place this morning. The morning events were covered in greater detail HERE . The bottom line is that US bond markets followed European bond markets into stronger territory due to Eurozone systemic stability issues concerning Greece. It's not the first time and it wasn't entirely unexpected today, but nonetheless led German yields to new record lows (Germany's bond market benefits from systemic instability in the EU). Gains continued into mid-morning. When European markets closed, that was it for the day. MBS and Treasuries …read more