Key Takeaways from the MBS Market as Volatility Continues into October 2024

Calm Day in the Market, Which is a Win Lately

The bond market last week showed some promise that the latest jobs report wouldn’t keep pushing rates higher, even though yields reached their peak on Thursday and Friday. Today can be seen as a win, as bond yields settled into the lower half of last week’s range without any major catalysts. The NY Fed Manufacturing index did play a role as a market influencer, helping to set a positive tone for rates. However, the movement appeared to be more of an adjustment in the yield curve rather than a broad bond rally, with 30-year yields dropping by 9 basis points, while 2-year yields remained nearly the same. More significant data is expected on Thursday morning.

Economic Data and Events

NY Fed Manufacturing recorded a -11.90, compared to 3.8 forecast and 11.5 previously.

Market Movement Recap

08:34 AM – The market opened a bit stronger overnight, with slight improvements following data releases. Mortgage-backed securities rose by an eighth, and the 10-year Treasury yield fell by 4.1 basis points to 4.059.

11:32 AM – Treasuries held at near-optimal levels, with most gains seen in longer durations

Navigating the Current Trends in Mortgage Rates: Insights and Implications for Homebuyers

Mortgage rates saw a slight dip today compared to last Friday, but the change is minimal. The market remained inactive yesterday due to a Federal holiday. Any decrease in rates is a win lately since, earlier this month, rates spiked rapidly following the October 4th job reports, marking one of the year’s quickest rises. Rates continued to climb until mid-last week before stabilizing, although they haven’t dropped back to the lower figures observed a few weeks prior. It’s essential to consider the larger picture—rates have increased by around 0.50% in the past month; however, they are still about 1% lower than they were in early April. Looking at the year-over-year comparison, there is a notable 1.4% improvement. This is quite significant, especially without the onset of a recession. Today was largely unchanged in terms of bond market movements and rate fluctuations from lenders. Major rate changes often hinge on significant economic reports, of which only a few occur monthly. This week, the main focus will be on the Retail Sales report scheduled for release on Thursday morning at 8:30am ET. Although rate changes may still occur before then, this report has the potential to drive more significant shifts.

Strategies for Navigating Current Mortgage Market Fluctuations

Sometimes appearances can be deceiving, and this extends to places as well. Imagine relocating only to find your new home isn’t as you initially thought. A notable trend among today’s retirees is emerging, as many seniors who initially moved to popular retirement destinations like Florida are now considering migrating northwards. They are choosing locations in Southern states such as Tennessee and Kentucky for either a move or to establish a second residence. These individuals have been dubbed “half backs,” as they are moving partway back to the northern states from where they originated.

Recently, the Gulf Coast of Florida faced significant challenges when Hurricane Milton wreaked havoc, forcing over a million people to flee in the wake of Hurricane Helene’s devastation across the southeastern United States. The disruption caused by Milton has been extensive, affecting various industries and leading to substantial economic repercussions. Forecasts suggest that the hurricane may result in economic damages exceeding $100 billion, influencing about 2.8% of the U.S. GDP. In response to these events, airlines canceled flights, and businesses paused their operations in an effort to curb potential risks.

In related news, this week’s podcast, including an interview with Matthew VanFossen from Absolute Home Mortgage Corporation, explores the significant trends and challenges facing executives in the

Understanding Market Volatility: Key Insights for Mortgage-Backed Securities in October 2024

Over the extended weekend, bonds saw improvement, primarily due to reduced tensions in the Middle East and a significant decline in oil prices. Although oil and bond prices aren’t directly linked, notable shifts in oil often influence bond market activity. As trading resumed, bond gains were initially slight; however, disappointing manufacturing data from the New York Federal Reserve encouraged further bond purchases.

Navigating the October Mortgage Market: Key Trends and Insights from MBS Recap

Another week has concluded without much excitement, and looking ahead, the upcoming week doesn’t seem to offer much more promise. After the lively reaction to last Friday’s employment data, this past week felt sluggish, reminiscent of a prolonged holiday break. In fact, with the upcoming Monday being a holiday, it feels like an extended 10-day weekend. While the Producer Price Index (PPI) and Consumer Sentiment reports were released today, they didn’t make much of a mark on the market. However, trade volumes indicate that investors would have responded had the PPI figures deviated significantly from expectations. Moving forward, we need significant data to signal poor economic conditions if there’s any hope of reclaiming recent losses. Unfortunately, the next significant reports aren’t due until next Thursday morning.

Key Economic Data and Events:
– Month-over-month Core PPI stayed at 0.2, matching forecasts, with the previous figure at 0.3.
– Year-over-year Core PPI was 2.8, slightly above the expected 2.7 and the prior 2.4.
– Consumer Sentiment registered at 68.9, falling short of the 79.8 forecast and slightly below the previous 70.1.
– One-year inflation

Navigating the 2024 Mortgage Rate Landscape: What Homebuyers Need to Know Now

This week’s mortgage rates showed a noticeable rise compared to most of last week’s figures. However, despite some volatility, the average lender’s rates stayed similar to Monday morning’s levels. On Wednesday afternoon and mid-day Thursday, there were several downward reprices, but the bond market’s recovery helped to curb major fluctuations. Compared to last week, rates appeared relatively stable. A chart tracking mortgage-backed securities (MBS) prices, which directly influence the movement of mortgage rates, indicates that higher MBS prices correspond to lower rates. In today’s market, a wholesale inflation report—known at times to introduce volatility—did not have a significant impact. The bond market showed some improvement by afternoon and remained steady, leading lenders to refrain from implementing negative mid-day rate changes. Rates set in the morning were aligned closely with the previous day’s levels. With the market closed on Monday for Indigenous Peoples’ Day, lenders will next update mortgage rates on Tuesday.

Navigating the Mortgage Market: Key Takeaways from Recent Trends and Updates

Today featured two noteworthy economic reports: the Producer Price Index (PPI) and Consumer Sentiment. Although neither report is typically known for dramatically impacting market movements, they have the potential to cause volatility. However, today was not particularly eventful in that regard. Both reports have been released, and bond markets have remained relatively stable, mirroring the levels seen at the market’s open. As the week comes to a close, bonds appear to be maintaining a steady or slightly weaker path, with traders anticipating future data that may provide clearer direction for interest rate adjustments.

Navigating the Winds of Change in the Mortgage Market: Insights for 2024

If you’re gearing up for the next hurricane in areas like Florida, Louisiana, or Texas, whether you see this as wise planning or just humorous, it’s your choice. In the mortgage realm, while headlines initially suggested a drop in interest rates, reality set in as they rose following the Fed’s recent 50 basis point cut. Despite this, application locks haven’t surged significantly. According to Curinos’ latest proprietary index, September saw a 62% increase in refinance applications and a 21% rise in the purchase index compared to previous months. Mortgage funding in September 2024 was up by 21% from the previous year but dipped 3% from August. The average 30-year conforming retail funded rate in September 2024 was 6.45%, down 30 basis points from August and 53 basis points from the prior year. Purchase rates fell by 33 basis points month-over-month and 67 year-over-year, while refinance rates dropped by 29 basis points from August and 48 from the previous year. Curinos obtains comprehensive data directly from lenders to create these crucial benchmarks. This week’s discussions feature LoanCare, celebrated for enhancing customer experience through personalization and ease, and an interview with Michael Tannenbaum of Figure

Navigating the Ups and Downs of the 2024 Mortgage Market: A Mid-October Recap

Bonds managed to end positively despite experiencing substantial volatility throughout the day. Initially, the market showed some stability, even recording slight gains, but was later affected by consistent selling. Remarks from Fed’s Bostic, expressing uncertainty about the necessity of another rate cut in November, led to a spike in yields just before the 30-year bond auction. Following an acceptable auction outcome, the bond market regained its composure and gradually moved back into positive territory. This was a satisfactory outcome, particularly given the morning’s core CPI figure (0.3 vs 0.3) and the higher jobless claims number, which was partially attributed to weather-related factors.

Economic Data/Events:

– Jobless Claims: Reported at 258k compared to the forecast of 230k and a previous level of 225k.
– Core CPI Month-over-Month: At 0.3, slightly higher than the 0.2 forecast and consistent with the previous reading.
– Year-over-Year Core CPI: Recorded at 3.3, above the expected 3.2 and the prior 3.2.

Market Activity Overview:

– 09:20 AM: The market was slightly weaker overnight with mixed trading following data releases. Mortgage-Back

Navigating the Rise: Current Mortgage Rate Trends and What They Mean for Homebuyers

Understanding mortgage rates at any given time can be a challenging endeavor. There’s no single definitive rate; instead, mortgage rates typically follow a bell curve where most lenders fall near the middle while a few outliers offer rates on either end. The bond market, particularly mortgage-backed securities (MBS), plays a critical role in determining the value of loans issued by mortgage lenders. However, lenders have a variety of factors at their disposal to influence the rates they offer, despite the pricing of MBS.

To determine the current landscape of mortgage rates, many rely on rate indices. A prominent example is Freddie Mac’s weekly rate index due to its widespread use and long history. However, its accuracy is sometimes lacking, especially for those who need insights into daily rate fluctuations. The index is based on a five-day average gathered from Thursday to Wednesday and reported the following day. This can lead to outdated data inputs when market conditions are volatile. Additionally, Freddie Mac may understate the reality of significant market shifts—likely due to its methodology involving human rate reporting, which may not reflect the latest available rates.