MBS RECAP: Bond Markets Very Quiet and Slightly Stronger

Posted To: MBS Commentary

It was a tremendously calm day for bond markets. In fact, 10yr yields held a range of 1.73 to 1.768–the narrowest of the entire year . Still, the modest amount of movement managed to be positive, even though that didn't look like a guarantee early in the session. Coming off the overnight hours, bond markets were weakening in concert with rising equities and oil prices. The morning's economic data actually had an impact though. Chicago PMI was much weaker than expected (47.6 vs 53.0) and helped bonds bounce out of the negative territory they'd been slipping …read more

Mortgage Rates Slightly Lower to Begin Week

Posted To: Mortgage Rate Watch

Mortgage rates were slightly lower today, recovering only some of the weakness seen over the past several business days. Apart from last Friday, today’s rates are still the highest in a week for most lenders. Context is important though. We’re not talking about big swings in rates. In fact, contract rates themselves aren’t even moving. Rather, it’s the closing costs associated with any given rate that have been rising and falling modestly. 3.625% remains the most prevalent conventional 30yr fixed rate quote for top tier scenarios. The absence of drama and volatility in the near …read more

Contract Signings Second Lowest in 17 Months

Posted To: MND NewsWire

Pending home sales kicked off 2016 by declining nationally and in three of the country’s four regions. The National Association of Realtors® (NAR) said that its Pending Home Sales Index (PHSI) declined 2.5 percent in January to 106.0. The indicator, based on signings for home purchase contracts was higher than the index in January 2015 by 1.4 percent. The unexpected decline – the consensus of analysts was for a 0.5 percent increase – was offset a bit by an upward revision in the December index which went from the 106.8 originally estimated, a 0.1 percent increase, …read more

MBS Day Ahead: 2 Warnings in Short Term Bond Markets

Posted To: MBS Commentary

The relationship between short and long term yields is an important indicator for bond markets and the broader economy. 10yr yields are almost always higher than 2yr yields, but when they become much closer together, or when 2yr yields actually rise above 10yr yields, conventional wisdom holds that recession is in store. With 10's trading around 1.75 and 2's around 0.8, we're nowhere close to a so-called “inverted yield curve,” but the gap has grown relentlessly narrower since the beginning of 2014. Any time the yield curve is narrowing this much, and especially when it's breaking …read more

MBS RECAP: Bonds Lose Ground, Leaving Bigger Picture Uncomfortably Sideways

Posted To: MBS Commentary

After yesterday's strong performance it would have been nice to at least hold those gains. If that had happened, the bigger picture would look decidedly better in terms of chart patterns. As it stands, the big picture still doesn't look “bad,” but today's weakness leaves the probability of negative outcomes on a relatively level playing field with positive outcomes. In other words, things were looking good for bonds until this week, and now they look more neutral. Reinforcing that neutrality is the relative lack of week-over-week movement. 10yr yields closed out just over 1.76 today versus …read more

Mortgage Rates End Week At Highs

Posted To: Mortgage Rate Watch

Mortgage rates moved higher again today–this time at a slightly quicker pace–bringing averages up to the highest levels in at least a week. That said, the recent rate range has been fairly narrow in the bigger picture. In extreme cases, there is a quarter point gap between today’s rates and the lowest of the month (Feb 11th), which were only available for 1 or 2 days depending on the lender. Everything else has taken place in a 0.125% range. In fact, the range is even smaller in terms of “effective rates,” which take closing costs …read more

CFPB Goals Shift Focus Away From Mortgages, Relatively

Posted To: MND NewsWire

In a speech this week to its Consumer Advisory Board the director of the Consumer Financial Protection Bureau (CFPB) laid out nine goals for the Bureau over the next two years. Richard Cordray said the goals represent the key areas where the Bureau hopes to make substantial progress. They “are statements about particular outcomes in particular markets that we want to drive toward fulfilling, rather than descriptions of the tools that will be used.” The treatment of the mortgage market is surprisingly light compared to the rest of the list of goals and largely consists of …read more

MBS Day Ahead: Why So Resilient And How Long Will it Last?

Posted To: MBS Commentary

Stocks and oil have had a big impact on bonds, but they're not the only story Central bank rhetoric has been helping Treasuries hold ground when stocks/oil bounce higher How long that lasts depends on what central banks actually do to back up their rhetoric European announcement coming up next week In the meantime, oil/stocks can still pull yields higher if they try hard enough Bond markets have obviously found their mojo in 2016. Their form of magic has been to capitalize on stock/oil weakness in a big way, but then in the same breath, to …read more

MBS RECAP: Bonds Hold Ground Despite Stock/Oil Gains

Posted To: MBS Commentary

Data overlooked as bonds react to stocks/oil early Bonds then ignore stock/oil rally later in the day and hold ground at stronger levels Could be month-end bond buying or bonds could be calling stocks' bluff. Bond markets had quite the resilient little day. Stocks and oil prices both surged well into positive territory in the early afternoon but MSB and Treasuries merely opted to level-off and hold sideways at stronger levels. Granted, these levels are still weaker than yesterday's best levels, but they're just as far away from yesterday's weakest levels too! So pick the fullness …read more

Mortgage Rates Definitely Not at Long-Term Lows

Posted To: Mortgage Rate Watch

Mortgage rates were slightly higher today, and that leaves them much higher than the long-term lows seen 2 weeks ago. Of course “much” is a relative term, and in this case, it pertains to the sticker shock that a rate shopper would have today versus, say, February 11th, when rates hit 2-year lows. Specifically, it could cost you more than a thousand dollars on a $200k loan to get back to Feb 11th rates. The news is far less dramatic if we focus on the fact that today’s rates are only about an eighth of …read more