Latest News
17th December, 24
Calm and Resilient as Bonds Wait For Powell and The Dot Plot
Calm and Resilient as Bonds Wait For Powell and The Dot Plot Whereas last week saw the bond market continue selling off without overt provocation, the first two days of the present week have seen far more equanimity and even resilience. Today's example involved a modest rally following a mixed bag of Retail Sales data. Bonds didn't move much after recovering overnight losses, so now it's on to tomorrow's Fed announcement. Markets know the Fed will cut and that the dot plot (aka rate outlook survey that's updated 4 times per year and closely watched by bonds) will show a higher rate
Calm and Resilient as Bonds Wait For Powell and The Dot Plot
Calm and Resilient as Bonds Wait For Powell and The Dot Plot Whereas last week saw the bond market continue selling off without overt provocation, the first two days of the present week have seen far more equanimity and even resilience. Today's example involved a modest rally following a mixed bag of Retail Sales data. Bonds didn't move much after recovering overnight losses, so now it's on to tomorrow's Fed announcement. Markets know the Fed will cut and that the dot plot (aka rate outlook survey that's updated 4 times per year and closely watched by bonds) will show a higher rate
17th December, 24
Mortgage Rates Effectively Unchanged Ahead of Fed Announcement
Mortgage rates have been having a much calmer week compared to last week. Monday brought a modest decline versus last Friday and today's rates are effectively unchanged. While the average lender is still noticeably higher compared to the first few days of the month, this resilience helps make a case that rates aren't eager to revisit the higher levels seen during most of November. Volatility could increase tomorrow afternoon following the Fed's rate announcement. As a reminder, the Fed DOES NOT set mortgage rates and a Fed rate cut DOES NOT mean mortgage rates will go down by
Mortgage Rates Effectively Unchanged Ahead of Fed Announcement
Mortgage rates have been having a much calmer week compared to last week. Monday brought a modest decline versus last Friday and today's rates are effectively unchanged. While the average lender is still noticeably higher compared to the first few days of the month, this resilience helps make a case that rates aren't eager to revisit the higher levels seen during most of November. Volatility could increase tomorrow afternoon following the Fed's rate announcement. As a reminder, the Fed DOES NOT set mortgage rates and a Fed rate cut DOES NOT mean mortgage rates will go down by
17th December, 24
Builder Confidence Remains Low, But Sales Expectations Are Increasing
The National Association of Home Builders (NAHB) and Wells Fargo publish the Housing Market Index (HMI) each month. The industry refers to this as "builder confidence" and December's number came out today. It was right in line with November's, and it suggests builders are increasingly honing in on a relatively gloomy baseline in the bigger picture. There are several ways to approach the languishing of the index, with the easiest being some combination of single family construction (which capture the initial drop in 2022) and multi-family construction (which, along with persistently high rates
Builder Confidence Remains Low, But Sales Expectations Are Increasing
The National Association of Home Builders (NAHB) and Wells Fargo publish the Housing Market Index (HMI) each month. The industry refers to this as "builder confidence" and December's number came out today. It was right in line with November's, and it suggests builders are increasingly honing in on a relatively gloomy baseline in the bigger picture. There are several ways to approach the languishing of the index, with the easiest being some combination of single family construction (which capture the initial drop in 2022) and multi-family construction (which, along with persistently high rates
17th December, 24
DPA, Subservicing, Pricing, AVM Products; USDA and VA News; Monetary Policy and Year-End
Number progressions can be deceiving and surprising. Thank you to Eric D. who reminded me of “The Wheat and the Chessboard” example, guaranteed to surprise anyone. What is also surprising is that between 2022 and 2023, the Hispanic population accounted for nearly 71 percent of the overall growth of the United States population, driven primarily by Hispanic births, according to newly released Vintage 2023 Population Estimates from the U.S. Census Bureau. Hispanics of any race grew to just over 65 million, an increase of 1.16 million (1.8 percent) from the prior year. This growth
DPA, Subservicing, Pricing, AVM Products; USDA and VA News; Monetary Policy and Year-End
Number progressions can be deceiving and surprising. Thank you to Eric D. who reminded me of “The Wheat and the Chessboard” example, guaranteed to surprise anyone. What is also surprising is that between 2022 and 2023, the Hispanic population accounted for nearly 71 percent of the overall growth of the United States population, driven primarily by Hispanic births, according to newly released Vintage 2023 Population Estimates from the U.S. Census Bureau. Hispanics of any race grew to just over 65 million, an increase of 1.16 million (1.8 percent) from the prior year. This growth
17th December, 24
Once Again, Bonds Fight Back Against Stronger Data
Yesterday, it was S&P Global PMI data. Today it's Retail Sales. Both were stronger than expected. Both failed to cause any lasting weakness in bonds. Today's reaction was far friendlier, largely because the internal components of Retail Sales were NOT stronger than expected. In fact, the "ex autos" component was 0.2 vs 0.4, and can likely be credited for early resilience in bonds. 10yr yields started the day slightly higher, but are well into positive territory at 11am. In the bigger picture, yields are still trending higher, but today represents another
Once Again, Bonds Fight Back Against Stronger Data
Yesterday, it was S&P Global PMI data. Today it's Retail Sales. Both were stronger than expected. Both failed to cause any lasting weakness in bonds. Today's reaction was far friendlier, largely because the internal components of Retail Sales were NOT stronger than expected. In fact, the "ex autos" component was 0.2 vs 0.4, and can likely be credited for early resilience in bonds. 10yr yields started the day slightly higher, but are well into positive territory at 11am. In the bigger picture, yields are still trending higher, but today represents another
16th December, 24
Bonds Hold Ground Despite Unfriendly Econ Data
Bonds Hold Ground Despite Unfriendly Econ Data If there was a prime directive for the bond market last week, it was to sell off regardless of any counterargument from the economic data. The new week got off to a distinctly different start with stronger economic data only causing a temporary inconvenience for bonds. Both MBS and Treasuries were pushed back in line with Friday's weakest level, but both found support in the PM hours before going on to make it back to unchanged territory, or close to it. Volume was low and the volatility was small in the bigger picture, but at
Bonds Hold Ground Despite Unfriendly Econ Data
Bonds Hold Ground Despite Unfriendly Econ Data If there was a prime directive for the bond market last week, it was to sell off regardless of any counterargument from the economic data. The new week got off to a distinctly different start with stronger economic data only causing a temporary inconvenience for bonds. Both MBS and Treasuries were pushed back in line with Friday's weakest level, but both found support in the PM hours before going on to make it back to unchanged territory, or close to it. Volume was low and the volatility was small in the bigger picture, but at
16th December, 24
Mortgage Rates Start New Week With Some Hope
Last week wasn't great for mortgage rates. They moved higher on each of the 5 days. Moreover, there was a distinct lack of logical motivation from the economic data. In fact, on a few occasions, the data argued for lower rates only for things to move in the other direction by the end of the day. The new week is off to a different start. Today's only relevant economic data argued in favor of higher rates, but the average lender ended the day in slightly lower territory compared to Friday afternoon. Granted, it wasn't a big victory, by any means (many lenders are
Mortgage Rates Start New Week With Some Hope
Last week wasn't great for mortgage rates. They moved higher on each of the 5 days. Moreover, there was a distinct lack of logical motivation from the economic data. In fact, on a few occasions, the data argued for lower rates only for things to move in the other direction by the end of the day. The new week is off to a different start. Today's only relevant economic data argued in favor of higher rates, but the average lender ended the day in slightly lower territory compared to Friday afternoon. Granted, it wasn't a big victory, by any means (many lenders are
16th December, 24
More Stable Start, For Now
Bonds were modestly stronger in the overnight session, and although domestic traders quickly erased the gains in the AM hours, the selling is currently stalling out near unchanged levels. If this support continues, it will build a case for rates leveling off ahead of Wednesday's Fed announcement (and dot plot). Notably, bonds looked prepared to hold overnight gains until the S&P Services PMI came out much stronger than expected at 9:45am. If bonds must be weaker, it's always better to know why (unlike last week
More Stable Start, For Now
Bonds were modestly stronger in the overnight session, and although domestic traders quickly erased the gains in the AM hours, the selling is currently stalling out near unchanged levels. If this support continues, it will build a case for rates leveling off ahead of Wednesday's Fed announcement (and dot plot). Notably, bonds looked prepared to hold overnight gains until the S&P Services PMI came out much stronger than expected at 9:45am. If bonds must be weaker, it's always better to know why (unlike last week
16th December, 24
Homebuyer Assistance, Pre-Qual, AI Tools; Webinars and Training; Fairway CEO Steve Jacobson Interview
You don’t become cooler with age, but you do care progressively less about being cool, which is the only true way of being cool. This is called the “Geezer’s Paradox.” People change, and so do industries. Things are always changing in our business. For example, take this plethora of mortgage law changes hitting Texas originators and lenders. Although ATR (Ability to Repay) has given us years of strong borrowers, credit analysis is changing. “Rob, is it true that the three credit bureaus own VantageScore?” Yes, it is owned by the three national credit bureaus (Equifax, Experian and
Homebuyer Assistance, Pre-Qual, AI Tools; Webinars and Training; Fairway CEO Steve Jacobson Interview
You don’t become cooler with age, but you do care progressively less about being cool, which is the only true way of being cool. This is called the “Geezer’s Paradox.” People change, and so do industries. Things are always changing in our business. For example, take this plethora of mortgage law changes hitting Texas originators and lenders. Although ATR (Ability to Repay) has given us years of strong borrowers, credit analysis is changing. “Rob, is it true that the three credit bureaus own VantageScore?” Yes, it is owned by the three national credit bureaus (Equifax, Experian and
13th December, 24
Why So Much Selling in Bonds?
Why So Much Selling in Bonds? Without a doubt, it's been a frustrating and puzzling week for the bond market. Everyone knows that bonds have moved consistently higher in yield, but there is very little understanding and agreement about WHY that move has taken place. Europe had a rough week, but EU bonds didn't lose as much ground as US bonds, so we can't really stop there. We also know that econ data wasn't to blame (or if it was, traders bought bonds at first and then changed their minds later in the day--not typical behavior, to say the least). Beyond those
Why So Much Selling in Bonds?
Why So Much Selling in Bonds? Without a doubt, it's been a frustrating and puzzling week for the bond market. Everyone knows that bonds have moved consistently higher in yield, but there is very little understanding and agreement about WHY that move has taken place. Europe had a rough week, but EU bonds didn't lose as much ground as US bonds, so we can't really stop there. We also know that econ data wasn't to blame (or if it was, traders bought bonds at first and then changed their minds later in the day--not typical behavior, to say the least). Beyond those
