MBS RECAP: Still a Decent Week Despite Friday Slide

Posted To: MBS Commentary

Still a Decent Week Despite Friday Slide Thursday morning was exceptionally strong for bonds–perhaps too strong, with too much influence from artificial factors like short-covering and tech-triggered algos. Today's modest weakness reinforces a more sober assessment of the recent trend, and although rates aren't as low as yesterday, that trend is still in good shape. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Housing Starts 1.739m vs 1.613m f'cast Building Permits 1.766m vs 1.75m f'cast Market Movement Recap 09:12 AM Modestly stronger overnight, but weaker since 8am. There is no clear connection with any calendar event. Domestic traders simply showing up to sell today (booking profits on recent long positions, hedging new corporate issuance , or re-shorting bonds after…(read more)

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Source: Mortgage News Daily

Best 2 Weeks For Rates in Nearly a Year

Posted To: Mortgage Rate Watch

The bond market has been pointing toward higher rates since last August. Mortgage rates were able to defy that trend at first, but finally began spiking in the new year. February and March were two of the worst back-to-back months in years. The higher rates went, the more likely it became that we’d see at least some sort of push back in the other direction. Anticipation and anxiety were running high as rates hit long term peaks at the end of March. Now 2 weeks in, April is clearly the month we were hoping it would be. Rates haven’t dropped this quickly since the pandemic began What’s with the change of heart? The bond market (which dictates rates) has a few quintessential sources of motivation. “The economy” is at the top of that list. Indeed, a brighter economic outlook (due to vaccines, falling…(read more)

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Source: Mortgage News Daily

Housing Starts Reach Highest Levels Since 2006

Posted To: MND NewsWire

Residential construction recovered in March after a serious decline the prior month. The U.S. Census Bureau and Department of Housing and Urban Development said all three measures rose, with housing starts hitting a 15 year high . Some regional increases topped 100 percent. Permits for residential construction were issued at a seasonally adjusted annual rate of 1.766 million in March, a 2.7 percent increase from February’s rate of 1.720 million. The latter is an upward revision from the 1.682 million permits originally reported for February, erasing some of the near 11 percent loss originally reported. The permitting rate for the month was 30.2 percent higher than in March 2020. There was some disagreement among analysts polled by Econoday and Trading Economics in forecasting the month’s results…(read more)

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Source: Mortgage News Daily

COVID-19 Forbearance Decline Hits Mid-Month Lull

Posted To: MND NewsWire

There was little change in the number of active forbearance plans over the past week, but Black Knight reminds, in its regular Friday report, that this it was simply another mid-month lull as servicers finished processing the prior month’s expired plans. Even so, the number of plans did decline for the seventh straight week , even if it was by a mere 1,000 loans or 0.04 percent. There are 380,000 plans set to expire at the end of April so Black Knight says the possibility remains of further improvement over the next two weeks. Even with the minimal decline of the past week, the number of outstanding plans is still down by 296,000 (11.4 percent) over the last month. As of April 13, there were 2.3M homeowners in COVID-19 related forbearance plans, representing 4.4 percent of all mortgage holders…(read more)

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Source: Mortgage News Daily

New Home Purchase Applications Ramping up for Spring

Posted To: MND NewsWire

True to tradition, new home sales appear to have moved higher in March as the calendar closed in on the start of the spring market. The Mortgage Bankers Association (MBA) estimates sales of newly constructed homes increased by 7 percent compared to February and are 12 percent higher than a year earlier. This change does not include any adjustment for typical seasonal patterns. Based on the application data, MBA forecasts that home sales were at a seasonally adjusted annual rate of 714,000 units in March. This is a decline of 4.5 percent from the February rate of 748,000 units. On an unadjusted basis, the forecast is for 72,000 new home sales in during the month, an increase of 10.8 percent from 65,000 sales in February. “New home purchase application activity is typically strong in March, and…(read more)

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Source: Mortgage News Daily

Lock Desk, MLO, Underwriter Jobs; POS, Workflow, Digital Tools; Agency's Trend: Not Our Friend?

Posted To: Pipeline Press

Suddenly everyone’s ruminating on upcoming mergers and acquisitions (and there will definitely be some), but in the lower management ranks, lenders are already shifting their hiring practices , and taking a careful measure of production and productivity. Will we ever run out things to measure? The median age (half above, half below) of owner-occupied homes across the U.S. is 39 years, according to the latest data from the 2019 American Community Survey . (New York has the oldest owner-occupied homes at a median age of 60 years while Nevada has the newest at a median age of 23 years.) Why should every loan originator care about the age of housing in their area? As a lender, do you have a renovation product, or 2 nd ? The age of the housing stock is an important remodeling market indicator…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: This Is The Shift. Now It's About Time and Scope

Posted To: MBS Commentary

For virtually all of 2021 (and much of Q4 2020), we've been tracking an uptrend in Treasury yields. As the overall move grew to a size rarely seen in the past few decades, we were increasingly eager to see a token correction for technical reasons (i.e. selling sprees can hibernate or straight up die of old age). The anticipation peaked with a terrible month-end in March and hopes for a better month as April started strong. So far, April has delivered on 100% of its promise to be a better month. It would only have taken 2-3 weeks of sideways-to-slightly-stronger momentum in bonds to classify the move as the corrective consolidation we were looking for. That much is a done deal. Now we can move on to asking the next series of questions about our newfound resilience. Questions: 1. How much…(read more)

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Source: Mortgage News Daily

Buyer Demand Provides Modest Boost to Builder Confidence

Posted To: MND NewsWire

New home builders seem to be slowly getting their mojo back. After recovering from the hit they took in the first days of the pandemic, they encountered labor shortages, supply chain issues, and rising material costs. The National Association of Home Builders (NAHB) said that builder confidence in the new home market, driven by strong buyer demand, ticked up slightly this month with the NAHB/Wells Fargo Housing Market Index (HMI) rising 1 point to 83. It is still down by 7 points from the all-time high it reached in November. Robert Dietz, NAHB’s chief economist, said builders continue to face challenges in order to add much needed new homes to the market. While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears…(read more)

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Source: Mortgage News Daily

AE, Ops, Sales Jobs; Sec. Mktg., NOI, QC, Diversity Products; NewRez/Caliber Deal; Servicing Retention Study

Posted To: Pipeline Press

There are some clever people out there, especially when it comes to satisfying demand . Lenders know that mortgage pricing is a function of supply and demand. If one investor doesn’t want your non-owner loans, for example, some other investor will, whether it is a Wall Street private label or a non-QM investor. I mention this because the 25 leading U.S. banks curtailed loan holdings by 8% during the first quarter to $5.45 trillion, according to the Federal Reserve. Deposits rose 16%, to $10.13 trillion, giving the lowest loan-to-deposit ratio since data collection began 36 years ago. How about the supply & demand of odd properties? How does one obtain financing, or go to the bank, or have an appraisal done, on a lighthouse? Sea lovers should know that the historic Wolf Trap Lighthouse…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Twilight Zone: Strong Econ Data = Big Bond Rally

Posted To: MBS Commentary

Heading into today, we expected the bond market to ignore potentially stronger Retail Sales data. Not only did bonds overlook the big beat (9.8 vs 5.9 f'cast), but they actually rallied in response. This was made all the more remarkable by the presence of 3 other better-than-expected economic reports that came out at the same time. So what's driving the gains? That's a long story, including technicals, corporate bonds, overseas tradeflows, and the general front-running of post-covid Treasury range. As far as overseas flows are concerned, much has been made of Japan's heavy participation in US debt. While the participation is nothing new, the narrative of "heavy selling" in March was quite prevalent in certain circles. The theory was that Japanese investors were drastically…(read more)

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Source: Mortgage News Daily