Understanding Economic Indicators: How Job Growth and Inflation Influence the Mortgage Market

Before the advent of the internet, many financial operations, including those at credit unions like Patelco, functioned without much trouble. However, a recent hack at Patelco serves as a stark reminder for companies to continually enhance their cybersecurity measures and prepare contingency plans. This incident also highlights the importance of diversifying one’s financial assets across multiple institutions for safety.

In broader lending news, the outlook isn’t too promising. Data from Curinos reveals that the funded mortgage volume for June 2024 fell by 13 percent compared to the previous year and experienced a 5 percent decline from the previous month. The average 30-year conforming retail funded rate in June 2024 stood at 7.11, showing a slight increase of 1 basis point since May 2024 and a significant rise of 66 basis points from June 2023. Curinos collects this data directly from a substantial number of lenders to ensure accuracy.

For more detailed insights, you can explore our further analysis here. Additionally, this week’s podcast, sponsored by Bundle, delves into legal documentation for the real estate and mortgage industries. Use the code “Chrisman” at checkout for a 20 percent discount. The podcast features an interview with realtor Clint Jordan, discussing the impacts

Understanding the Latest Trends: Navigating Mortgage Rates in July 2024

Currently, one of the most frequently used terms by the Federal Reserve in relation to its rate-setting policy is “data dependent.” Although the Fed doesn’t have direct control over mortgage rates, the bond market reacts to the same economic data that the Fed considers important. Today, the ISM Services index report, which is a significant driver of bond market activity and, consequently, interest rates, came in much weaker than anticipated. Typically, weaker data leads to lower interest rates, all other factors being constant. As a result, bonds saw immediate improvement following the report, enabling mortgage lenders to offer reduced rates. Some lenders, who had already set their rates for the day, issued positive reprices in response. While the bond market will be closed for the holiday tomorrow, attention will quickly shift to Friday’s crucial economic release: the major jobs report.

Future-Proofing Your Mortgage Business: Key Trends and Insights for 2024

In July 1776, approximately 2.5 million people resided in what was then the newly independent United States. Today, per the Census Bureau, that population has surged to roughly 335 million. Among those 2.5 million early Americans, 56 individuals signed the Declaration of Independence. John Hancock, a merchant, was the first to sign. Representing Pennsylvania, Benjamin Franklin was the oldest signer at 70 years old, while South Carolina’s Edward Rutledge was the youngest at just 26.

While we’re on the topic of numbers, it’s worth noting that organizations like the FHFA and CFPB, though deeply embedded in the American financial landscape, aren’t as historic as these early figures. They have, however, recently released updated data from the National Survey of Mortgage Originations. For those interested in financial compliance, there’s also accessible real-time information on violation penalties.

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Mortgage Applications Decline Amidst Rising Interest Rates and Market Uncertainty

Last week saw a decline in mortgage application volume due to rising interest rates. Although purchase activity is falling compared to the same period last year, refinancing activity is showing steady improvement from last year. The Mortgage Bankers Association reported that its Market Composite Index, which tracks application volume, dropped by 2.6 percent on a seasonally adjusted basis from the previous week but increased by 8.0 percent when unadjusted. The Refinance Index decreased by 2.0 percent from the week ending June 20 but was up 29.0 percent compared to the same week in 2023. The refinance share of total mortgage applications rose to 35.7 percent from 35.1 percent the preceding week. The seasonally adjusted Purchase Index fell by 3.0 percent from the previous week, while the unadjusted Purchase Index increased by 7.0 percent, though it was still 12.0 percent lower than the same week one year ago. Mortgage rates surpassed 7 percent last week, despite ongoing market speculation about a potential Federal Reserve rate cut later this year. Purchase applications decreased in the final full week of June, even with new and existing housing inventories on the rise. Refinance activity remains low, with a

Potential Interest Rate Hike Looms as Mortgage Rates Stabilize

Tuesday delivered a day relatively free from drama, contrary to recent bond market trends that saw counterintuitive sell-offs. While political factors and the intricacies of monthly bond positioning may have contributed to recent volatility, such concerns were less pronounced today, as modest improvements were noted. Fed Chair Powell’s appearance at SINTRA elicited little market reaction, which could be viewed positively. Bonds gradually strengthened during his speech, although they pulled back slightly after the release of the JOLTS data showing higher-than-expected job openings. Despite this, buyers remained active, holding the gains through the close of the trading session. Some interpret this as evidence that the presidential debate had minimal impact on risk repricing, while others believe it underscores the limited significance of the event. Attention now shifts to upcoming high-impact economic data expected in the next two days.

Economic Data/Events

Job Openings (lower numbers are favorable for interest rates)

8.14 million vs 7.91 million forecast, 7.919 million previous

Job Quits (lower numbers are favorable for interest rates)

3.459 million vs 3.452 million previous

Market Activity Summary

09:46 AM Saw modest overnight gains extended in early trading. MBS up over an eighth,

Navigating the Latest Trends in Mortgage Rates: Insights for July 2024

Modern internet headlines frequently exaggerate the situation, and this instance is no exception. Given that the last significant “ceiling” in mortgage rates occurred less than a month ago, and the previous short-term peak was just a week ago, describing the current development with words like “finally” feels premature. The term “ceiling” itself is used loosely here due to the lack of a specific term to define “a day when mortgage rates dipped slightly after a period of noticeable increases.” In essence, this is what transpired today. It’s a relief whenever rates stabilize after a sudden rise lasts for more than a day. Currently, the past two days appear to be slight extensions of a gradual upward trend in rates that started in mid-June. Moving forward, economic data will be crucial, with significant reports scheduled for the remaining two mornings of this week (Thursday is a holiday for Independence Day). Among these, Friday’s jobs report is likely to cause the most market volatility.

Navigating Market Volatility: Insights and Strategies for July 2024

The bond market has experienced a volatile few days, marked by a sharp increase in yields that has left analysts speculating about the causes. Some attribute the sell-off to month-end trading activities, while others point to political factors, such as the perceived higher probability of a Republican sweep following recent debates.

Unlike typical reactions to significant economic data or Federal Reserve announcements, the current bond market weakness didn’t stem from a single event or headline. However, today’s session showed signs of recovery. Federal Reserve Chair Jerome Powell’s remarks at the SINTRA conference were unremarkable, which helped bonds rally overnight as the market welcomed the lack of hawkish commentary. Meanwhile, the JOLTS report closely matched expectations, maintaining yields within the morning range despite early heavy trading volume.

Navigating the Summer Dip: Strategies for Thriving in a Slowing Mortgage Market

Cracker Jacks, Quaker Oats, Ferris Wheels, and the 1893 Chicago World’s Fair share a common historical thread. Financial difficulties have led to the decline of such world expositions over time. Much has evolved financially since those days, including the founding of Equifax in 1899. The modern credit card, designed for use at multiple merchants, emerged in the 1950s. During this era, the Fair Isaac Corporation (FICO) was established in 1956. Recently, FICO announced that Encompass Lending Group and Equity Resources, Inc. have adopted the FICO® Score 10 T.

Meanwhile, the Mortgage Bankers Association and other organizations have highlighted that credit-related price increases have burdened lenders and consumers with significant costs. FICO’s executives receive substantial compensation, with the company’s stock priced around $1,500 per share and a price-earnings ratio of approximately 77, compared to the S&P 500 average of around 25. However, mortgage credit scores remain the company’s primary area of revenue growth, while other product lines remain stagnant.

Financial experts believe Fair Isaac faces a critical decision: continually increase the pricing of mortgage credit scores or risk a sharp decline in its stock value

Navigating July Mortgage Rate Shifts: Key Insights from Market Movements

Adapting the narrative to align with market movements:

Typically, one can analyze the fundamental factors of any trading day to reasonably predict how the bond market will react. Usually, there’s a basic level of causality that often follows predictable patterns. For instance, if the ISM Manufacturing report indicates a broad decline, it would be logical to anticipate a drop in bond yields, assuming no other significant influences. This scenario did play out today but only for a brief period of about 70 seconds before bond yields reversed course and climbed to their highest levels in over a month. This unexpected shift often leads analysts to search for explanations that fit the observed market behavior. In this case, the familiar patterns of month-end/new-month trading and political factors seem to be at play. The latter is particularly complex due to the numerous assumptions and conditions necessary to create a coherent narrative.

Economic Data / Events

ISM Manufacturing PMI

48.5 vs 49.1 forecast, 48.7 previous

Market Movement Recap

9:06 AM Slightly weaker overnight with further selling at the 8:20 AM CME open. Mortgage-Backed Securities (MBS) down an eighth, and the 10-year Treasury yield up 4.9 basis points (

Understanding Recent Shifts in Mortgage Rates: What Borrowers Need to Know

Today, mortgage rates continued their frustrating and somewhat confusing upward trend, nearing the highest levels since late May. Rising rates are always a challenge for the housing and mortgage markets, as well as for potential borrowers, yet volatile movements in rates are a normal aspect of the market. Typically, we can link any rate fluctuations to specific economic factors.

However, in the past two days, economic data has hinted at downward pressure on rates, which is puzzling since rates have, in fact, been increasing. This situation is notable for two reasons: economic data generally provides reliable guidance, and the recent trend defies this expectation. Various explanations have been suggested, with some attributing the counterintuitive trend to political influences following the recent presidential debate.

Understanding how these political factors impact market movements involves complex analysis and several assumptions, making it difficult to predict with certainty. While this political influence might be contributing to the unusual rate behavior, upcoming major economic reports are likely to have a more significant impact. For now, it’s essential to keep an eye on these reports to better understand future rate trends.