MBS RECAP: Bond Markets Hear Dueling Banjos From Europe and US; Weaker in the PM

Posted To: MBS Commentary

European and US headlines did their rendition of 'dueling banjos' this afternoon. On the European side, we had potentially fake news out of a country that may only exist in the movies and history books. The Prime Minister of Malta is cited as saying Greece could cancel the referendum if they can make a deal with creditors. Why we're hearing this from the Maltese PM is anyone's guess. On the US side, Fed Vice Chair Fischer (the respected one, not the crazy ex-Dallas Fed pres. who says “feral hogs” and “monetary cocaine”) said that we're basically …read more

Mortgage Rates Modestly Lower as Risks Increase

Posted To: Mortgage Rate Watch

Mortgage rates had their 2nd straight day of improvements today–something that’s been uncommon since the beginning of May. Additionally, the slight drop in rates was belied by the market movement. The bond markets that inform lenders rate sheets actually pointed to higher rates by the end of the day. That means the improvements were more to do with the overhang from yesterday’s strength. In other words, yesterday’s underlying market conditions where so strong, and so abrupt, that lenders couldn’t fully price them into rate sheets. That left some additional room to lower rates today despite …read more

MBS MID-DAY: Infinitely Calmer Day; Bond Markets Holding Range

Posted To: MBS Commentary

Although MBS are just barely into positive territory and Treasuries are just now getting back to unchanged levels after morning weakness, today is about as positive as it can be. Reason being, simply holding near unchanged levels means bonds are attempting to confirm yesterday's sharp improvements. Either that or it's the last day of the month and there's additional demand for bonds as a result. Even then, it's not too difficult to accept the past 2 days as an 'in trend correction.' There were all the following reasons: – recent run to weakest levels of the …read more

Price Gains Accelerating Again -Black Knight

Posted To: MND NewsWire

Home prices rose 1.0 percent in April. Black Knight Financial Services said its Home Price Index for the month was at $248,000 compared to $245,000 in March. The HPI posted a +4.9 percent change from April 2014 when it stood at $236,000. Nationally the HPI is now within 7.6 percent of the peak value it reached in July 2006 of 268,000. Several states have already established new high-water marks for prices including Colorado and Texas which have done so nearly monthly for over a year. In April both New York and Tennessee also set new price …read more

Consumer Expectations Match Home Price Performance -Case-Shiller

Posted To: MND NewsWire

House prices continued to increase in April but the gains lost a bit of momentum compared to the previous month, reversing the acceleration noted by S&P Dow Jones/Case Shiller Indices last month. The company’s National index and both of its multi-city composites posted slightly lower year over year increases in figures released today than in the March report. The U.S. National Home Price Index which covers all nine census divisions rose 4.2 percent from April 2014 to April 2015. In March the annual gain had been 4.3 percent . On a month-over-month basis the index was …read more

MBS Day Ahead: Passing the Time Until Greece’s Big Day

Posted To: MBS Commentary

It's a big day for Greece. No, not today, when the country will 'default' on it's €1.7 bln payment to the IMF. No, not July 5th when the Greek people will vote for a European reform package that's no longer on the table (rumor is it'll have to be conducted more slowly due to funding anyway). Rather, the big day is July 20th , when Greece owes its first real debt this month. Assuming the payment to the IMF is missed, there's no major consequence in the near term. Greece simply owes the IMF. Even ratings …read more

MBS RECAP: Bonds Back to Best Levels With Help from Stocks

Posted To: MBS Commentary

Nothing like some good, old-fashioned 'stock lever' to restore one's faith in classic market paradigms. That's the one where traders ” sell stocks, buy bonds ,” or vice versa. There was certainly plenty of stock selling today as S&P futures fell more than 40 points from Friday's close. In fact, it was the biggest day of S&P losses since 2011. Up until the time that the pervasive weakness took over in stocks, bond markets were selling off. That doesn't mean they were in negative territory, just that they were heading that direction after a huge initial …read more

Mortgage Rates Erase One Day of Losses. More Volatility Ahead

Posted To: Mortgage Rate Watch

Mortgage rates spiked to the highest levels of the year on Friday after hovering close to them for several days. But news out of Europe over the weekend caused major movement in financial markets at the start of the day. One of the biggest beneficiaries was the US bond market where Treasuries yields and mortgage rates fell appreciably. Interestingly enough, today’s appreciable improvement perfectly counteracted Friday’s appreciable weakness, leaving the average lender right in line with Thursday’s latest rate sheet offerings. This brings the most prevalently-quoted conventional 30yr fixed rate back to 4.125% for top …read more

MBS MID-DAY: Bond Gains Accelerate into Afternoon

Posted To: MBS Commentary

The early morning hours for US bond markets were somewhat disheartening as gains steadily evaporated into the 10am hour. Up until that point, it looked as if markets priced in the worst case scenario and gradually calmed down from there. But starting at 10am, calmness faded abruptly as equities began giving up in their attempt to push off the opening lows. The mass exodus in stocks has benefited bonds, with both MBS and Treasuries in a linear, positive trend since then. Both are also at their best levels of the domestic trading session. For Fannie 3.5s, …read more

FHLB & Warehouse Lines; U.S. Rates Drop; CFPB to Audit Executive Pay

Posted To: Pipeline Press

I doubt the average U.S. household is sitting around worrying about interest rates. It’s probably more like earthquake preparedness than anything; California residents have been told the “big one” is coming for dozens of years, that it’s a statistical certainty in the long run. However, I believe very few homes in that state have anything more than a box with a few expired soup cans in it as a survival stash. In a similar vein Wells Fargo asks the question, Are Households Prepared for Higher Interest Rates? By “prepared,” in essence, they ask the question whether …read more