“Unpacking the Influence of Daily Market Changes on Mortgage-backed Securities: A Recap”

The topic of MBS lags behind Treasury bonds has once again come to the fore. The particular focus is not necessarily on the scale of this underperformance, but the fact that MBS frequently showed negative results while Treasuries have been positively performing. Despite the repetitiveness of the MBS trailing discussion, we aim to share new insights in our latest video. It’s worth mentioning that the day was relatively static for bonds, featuring slight victories for the longer end of the yield curve (a primary cause of MBS underperformance) and a calm and steady afternoon.

Economic Data / Events

Import Prices

Fell by 0.6, contradicting the forecast of 0.0, and previous value of 0.6

Export Prices

Decreased by 0.4, defying the forecast of 0.1, and previous amount of 0.9

Consumer Sentiment

Recorded at 65.6, well below the forecast of 72.0 and previous figure of 69.1

Inflation expectations for 1 year remain the same, and 5-year inflation expectation slightly increased by 0.1%.

Market Movement Recap

At 08:58 AM, market seemed stronger but lost some momentum half an hour later. MBS improved by one tick (.03), and 10-yr yield decreased by 2.7 bps to 4.218.

As of 11:54 AM, the market was fluctuating within a narrow range. MBS lagged behind with 5.5s decreasing 1 tick (.03). Yields on 10-yr were 3 bps lower at 4.215.

By 03:14 PM, the market saw practically no change from the last update with minimal volatility throughout the period.

“Exploring the Landscape of Mortgage Rates: Insights from June 14, 2024 Review”

The conventional 30-year fixed rate saw a small uptick for top-tier scenarios, with most lenders’ quotes resting just below 7%. The rates fluctuate between the mid-6% and mid-7%, depending on particular scenarios. Unlike the previous couple of days, there were no significant events impacting the bonds associated with mortgage rate movements. A few economic reports were released, but their impact on the market was minimal, resulting in a relatively uneventful day, in stark contrast to the majority of days since last Friday. The market is now poised in anticipation of the next significant economic report: Retail Sales, due on Tuesday. Other reports are expected in the coming week, against the backdrop of a holiday on Wednesday for Juneteenth. The most substantial market shifts are likely still tied to the recently released economic reports, the like of which will not reappear for nearly a month. A mild, somewhat erratic movement trend is expected until then.

“Understanding the Dynamics: The Mortgage Rate Trend for June 14, 2024”

After analyzing last week’s economic activities and data, it’s clear that the bond market is grappling with numerous concerns. Foremost among these is the possibility of an uptick in inflation, which seems to be making the long-awaited turn. Employment figures also prompt speculation about a potential weakness in the labor market. Further, predictions regarding rate cuts by the Federal Reserve become complex considering the unexpected inflation scenario in the first quarter, leaving traders to question the central bank’s stance.

As it stands, no recent developments or information seem to be clarifying this picture. Even though we may have expected Import Prices to exacerbate deflationary trends, bonds disappointingly experienced losses post-data release—though not necessarily as a direct result. The inability of Consumer Sentiment data to stimulate the market further underscores the belief that bonds have taken a backseat for this week and ongoing trades appear to be driven by factors unrelated to today’s happenings.

“Understanding the Intricacies of Mortgage News: A Thorough Overview”

Recently in Florida, we hilariously marked the occasion with a couple of grown-up drinks: Metamucil and Ensure. It’s a testament to each state’s unique idiosyncrasies, which often serve as humorous fodder for those residing in other regions – classic human behavior. Meanwhile, the culinary industry in Chicago is experiencing a significant boom, despite despair among White Sox fans over the team’s regrettable standing as the worst in the majors. On a broader scale, the fastest expanding cities still predominantly reside in the sunny southern states. Intriguingly, recent population statistics indicate some of the top growth areas are now found on metropolitan fringes or in rural regions. Taking Rockford as an example – positioned to the west of Chicago – it has become a prominent player in the nation’s real estate market. This flourishing market typically ushers in a surge in lending, which bodes well for originators. Who wouldn’t benefit from drawing insights from top producers who are passionate about their work? Today, The Mortgage Collaborative’s Rundown will spotlight Austin Lampson, who recently achieved recognition as one of the top 5 female loan originators in the country in 2023, maintaining her place in the top 1% since 2014! This week’s podcast can be accessed here and features our sponsor, Richey May – a leading provider of specialized advice, audit, taxes, cybersecurity, tech, and additional services to the mortgage industry. It includes an interview with Loan Atlas’ Craig Strent on how to develop your origination business away from Realtor-based referrals, which can be incredibly informative. For Lenders and Brokers seeking stellar software, products, and services, Dragon9 Partners offers transformative IT solutions geared specifically to mortgage origination, sales, and servicing. We cater to all sizes of Lenders/Brokers, with our knowledgeable team well-versed in the intricacies of the mortgage industry and committed to delivering advanced, tailored technology solutions. Whether optimizing your origination process, bolstering sales effectiveness, or upgrading servicing operations is your objective, our extensive IT consulting services are designed to propel your success. Let Dragon9 be your dependable guide through the maze of the mortgage industry and utilize progressive technology to enhance customer satisfaction and streamline your operations. Contact us today to discover how we can empower you to achieve your ambitions. Act fast – the first three respondents will secure a complimentary cybersecurity readiness assessment.

“Understanding the Future Predictions of Mortgage Rates: A Comprehensive Analysis for 2024”

To find a more competitive offer on a top-tier, 30-year fixed mortgage rate than what’s being presented today, one would have to look back to March 28th. This is almost the same case as yesterday, with today’s rates being slightly more favorable. However, yesterday’s market fluctuations have led to some lenders taking a divergent approach within the recent 24-hour period. The Federal Reserve’s announcement triggered a significant decrease in bonds that prompted some lenders to present rates at marginally higher levels. Yet, there was a noticeable improvement amongst these lenders this morning, though not significantly better than yesterday’s morning rate offerings.

Helpful data today provided a positive inflation reading at the wholesale level, in contrast to a consumer-level report of yesterday. Additionally, there was an increase in Unemployment Claims, reaching their peak levels since the previous summer. Generally, weaker economic data has a favorable influence on rates. However, this claims data has stirred up uncertainties about seasonal adjustments, mirroring last year’s increase in claims. This implies that seasonal adjustment factors may not be precise for a changing labor market.

Due to these and other factors, the bond market will be rather hesitant to swiftly drop rates until the traders are confident that the data is suggesting a genuine economic shift. This is coupled with a strong likelihood of getting back to an annual inflation rate of 2% in the core level. The source of this information should not be referenced.

“Unlocking the Inner Workings of the Mortgage Industry: An In-depth Analysis”

This morning, I set off for Chicago, IL, a state that is home to 972 licensed mortgage-banking firms. Illinois has experienced significant storm damage, comparable to the recent extreme rainfall event in Sarasota, where we saw around 10 inches of rain within a 12-hour period. Illinois could join other U.S. regions where insurance costs are nearing property tax levels. This is indeed challenging for a borrower. The accessibility and rising prices of homeowners’ insurance is a prevalent issue in Florida, alongside the PACE program. This loan initiative for clean energy is only available in Florida, California, and Missouri. Despite the introduction of consumer protection measures into the program by the Florida legislature, certain mortgage organizations were disappointed with the passage of the bill and are lobbying for a veto. For example, these loans achieve higher priority than a homeowner’s mortgage, leading to potential ‘predatory’ lending practices, which no one wants. It’s adding complications for lenders and service providers. Check out today’s podcast and listen to a fascinating interview with Michael Nougier from Richey May. Interest rates have seen a significant increase, nearly doubling from their state in 2022 and consistently hovering around the 7 percent mark in recent times. This has amplified the problems of homeowners falling behind on their mortgage payments as modifying loans through interest rate reductions has become less viable. Despite this, there are still solutions available. FHA’s Payment Supplement program, for example, provides relief without altering the terms of the initial mortgage. You can glean more about this and other potential solutions for high interest rate pressures in a recent blog by Clarifire. It is vital to refrain from letting outdated automation hinder your progression and to help distress borrowers confront economic instability to prevent default. For this, CLARIFIRE® proves to be a modern, smart tool with brighter automation capabilities.

“Decoding Today’s Mortgage Rates: Comprehensive Insights from June 12, 2024”

The bond market experienced an extraordinarily pivotal day, which had an impact on mortgage rates, driven by the coinciding occurrence of two crucial events. The first of these was the unveiling of the Consumer Price Index (CPI) for the month. Among all economic reports, this and the major jobs report – which was released last Friday – hold the greatest clout in swaying interest rates. While the jobs report had a damaging effect, the CPI worked in favor, facilitating one of the steepest single-day drops in months, with the average premium 30-year fixed scenario descending just below 7.0%. However, the positive momentum faded following the Federal Reserve’s afternoon declaration. What truly unsettled the market were not the Fed’s announcement itself, but rather the revised rate projections. The last forecast in March predicted three rate reductions in 2024, whereas the latest only projects one. This slight shift towards conservatism was not far off the market’s expectation, yet it was certainly less flexible than desired. Traders found no optimism in these forecasts or during Fed chair Powell’s media briefing to indicate the continuation of the morning’s prosperous trend. By the end of the day, bonds had surrendered about half of their advances and numerous mortgage lenders announced an upswing in late-day rates by 4pm Eastern Time. Lenders who refrained from raising their rates in the afternoon will have to accommodate the bond market’s fluctuations in their rate offerings for the following day, provided there are no significant movements in the bond market late night or early in the morning.

“Analyzing the Significant Impacts on Mortgage Rates and Bond Markets: Insights from June 2024”

Recent observations imply a steady growth in the economic activity. The employment arena reflects an ongoing resilience with a stable, low unemployment rate. Although inflation has somewhat alleviated in the previous year, it continues to operate at a heightened level. The Committee’s objective to reach a 2 percent inflation goal hasn’t seen much advancement recently. Their aims remain to max out employment and attain a 2 percent inflation increase over an extended period. Assessing its goals, the Committee believes the risks have become more balanced in the past year. Though the economic forecast remains ambiguous, the Committee keeps close watch on potential inflation threats. Aligned with these objectives, the Committee opted to uphold a 5-1/4 to 5-1/2 percent range for the federal funds rate. The potential modification of the federal funds rate will consider incoming data, shifting outlooks, and balance of risks. The Committee will refrain from lowering the rate range until a stronger assurance is gained for a sustainable inflation growth. Alongside this, the Committee will persist in decreasing its Treasury securities, agency debt and agency mortgage-backed securities. From June, the Committee plans to decelerate the reduction of their securities by lowering the monthly redemption cap on Treasury bonds from $60 billion to $25 billion, while keeping the agency debt and MBS cap at $35 billion and re-investing any exceeding principal payments into Treasury securities. The Committee firmly intends to bring inflation back to the targeted 2% level. The Committee will continue its assessments using a variety of coefficients like labor market condition, inflation tendencies and forecasts, along with other financial and international trends. The Committee stands ready to make necessary adjustments to monetary policy should risks arise that could obstruct the realization of their goals.

“Exploring the Impact of Economic, Political, and Social Factors on the Mortgage Landscape: A Deep Dive”

The statehood of Florida dates back to 1845, followed by the unique use of kites during the American Civil War to relay letters, news, and periodicals. Fast forward to the current era, defined by the internet, and the recent MBA Florida Conference in Sarasota made waves with its latest proposal from the CFPB. This proposed regulation intends to omit medical bills from the majority of credit reports, bolstering the confidentiality of personal information, potentially boosting credit ratings and loan confirmations, limiting the power of debt collectors, and discouraging the sharing of medical debts among credit reporting agencies and lenders. It also endeavors to ensure that lending decisions remain unaffected by medical data. The mixed response to the proposal ranged from allegorical baseball references to concerns over the housing market and a sarcastic suggestion about excluding late payments or mortgage payments from credit reports. For more information and updates, keep following this space! (Check out this week’s podcasts sponsored by Richey May, a reputable expert in specialized advisory, audit, tax, cybersecurity, and more, including an enlightening interview with Zavvie’s Maya Velazquez discussing modern bridge solutions and perspectives on cash offers and buy-before-you-sell strategies). On a related note, mortgage initiation is in decline, with homeowners not keen on renouncing low-interest rates for new properties demanding over 6% interest. Consequently, lenders are improvising with unique loan products like ARMs, buydowns, and SCRA loans to attract borrowers. We recommend ICE’s latest blog post for an in-depth understanding of the appeal of these special loan products, as well as insights from the ICE Mortgage Technology Professional Services pros on adapting your team to these changes.

“Exploring the Intricacies of Market Reactions and Mortgage Trends: A Deep Dive into June 12, 2024’s Report”

Interpreting the CPI data can be challenging given the numerous line items it consists of, making it difficult to produce a flawless analysis. The persistently high “shelter” element, which hasn’t changed since last month, and the delayed reflection of recent metrics in the shelter category, are aspects worth noting, as indicated by a graphical representation by Ernie Tedeschi.

However, today’s CPI data brings uniqueness in regard to the commonly sought-after but seldom achieved “target rate” of 2.0% at the core level. Though 2.0% hasn’t been reached on a yearly basis, this month’s before-rounding rate was recorded at 0.163%, which gives us less than 2.0% if continued for a year. This is the lowest it has been since 2021 when it was still increasing.

As it currently stands, the yearly core inflation continues to decrease, yet it needs to reduce further before touching 2.0%.

The bond market responded rationally with a noticeable leap, marking the highest rates in recent months. The future direction of this rally, whether it continues or steadies, relies heavily on the Federal Reserve’s subsequent actions. A look at the rally in relation to Friday’s job report downfall gives some valuable insight.

If not for traders anticipating the Federal Reserve’s announcement, trading volume and movement might have exceeded what was observed post jobs report.