Navigating Volatile Markets: Insights for Mortgage Professionals on July 10, 2024

The recent stable trend began just before noon last Friday, following a bond market rally triggered by the jobs report, where 10-year Treasury yields settled at 4.29%. Since then, fluctuations have been minimal, with movements staying within a 4 basis points range and mostly even narrower 95% of the time. This stability is largely due to a lack of new, compelling economic data. Since the jobs report, there have been no significant economic releases or major events. Today’s schedule is similarly sparse. The second day of Powell’s testimony is unlikely to bring new revelations, and although the 10-year Treasury auction might cause short-term volatility, it won’t significantly affect the larger picture, especially with the crucial Consumer Price Index (CPI) report due tomorrow morning.

Key Trends Shaping the Mortgage Market Today

The only time I get asked for sex is on application forms. Ba-dum-ching! Speaking of applications, most lenders will agree that homebuyers should first meet with a loan officer rather than a real estate agent. However, real estate agents have excelled over the years at becoming the initial contact for many homebuyers. The big question remains: how much house can they really afford, considering current mortgage rates, homeowner’s insurance, utilities, etc.? Skilled originators are adept at understanding their clients’ psychology under the critical principle of “Know your borrower,” particularly for first-time homebuyers. Most homebuyers eventually remain homeowners, and data from the FHFA shows that this trend has increased over time across various demographics such as race, ethnicity, regions, and mortgage lending submarkets. (Check out today’s podcast sponsored by nCino, creators of the nCino Mortgage Suite that modernizes the mortgage lending process by uniting people, systems, and stages of the workflow. In the latest episode, attorney Peter Idziak discusses the Supreme Court’s decision to overturn the Chevron doctrine, which required judges to favor government agencies when the law is ambiguous, and its implications for the mortgage industry.)

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Understanding the Surge: Why Mortgage Application Volumes Are on the Rise This July

Last week saw a minor decline in mortgage applications on a seasonally adjusted basis, but there was a significant drop on an unadjusted basis due to the July 4th holiday. The Mortgage Bankers Association (MBA) reported a 0.2 percent decrease in its Market Composite Index, which gauges mortgage loan application volume, on a seasonally adjusted basis from the prior week. On an unadjusted basis, the Index plummeted by 20.0 percent.

The Refinance Index fell by 2.0 percent compared to the previous week but remained 28.0 percent higher than the same week a year ago. The share of mortgage activity attributed to refinancing dropped to 34.9 percent of total applications from 35.7 percent the prior week.

The seasonally adjusted Purchase Index registered a 1.0 percent increase, whereas the unadjusted Purchase Index declined 19.0 percent. Compared to the same week last year, the purchase index was down by 13.0 percent.

The rise in mortgage rates has slowed demand, with mortgage applications largely unchanged as rates hovered around 7 percent. Purchase activity saw a minor uptick, primarily due to higher FHA and VA applications, while refinance applications fell for the

Interpreting the Impacts: A Deep Dive into Mortgage Market Movements on July 9, 2024

MBS Performance and Powell’s Stance: Awaiting CPI Data

This morning saw a slight revival in bond market activity compared to a near standstill yesterday. The volatility today was largely influenced by Federal Reserve Chair Jerome Powell’s congressional testimony, which was more about what he didn’t say than what he did. Specifically, Powell refrained from signaling any imminent rate cut, sticking instead to the “data dependent” narrative. This lack of dovish sentiment kept bonds from rallying. Despite this, trading levels reverted to pre-testimony positions by market close. The 10-year Treasury yield experienced a slight uptick, while MBS posted modest gains. This movement can partially be attributed to the yield curve, with short-term Treasuries performing better and MBS aligning more closely with the 5-year rather than the 10-year benchmarks. All eyes are now set on Thursday’s CPI report for further direction in the bond market.

Market Movement Recap

11:47 AM: The market opened modestly weaker overnight, with additional losses during Powell’s testimony, mainly impacting Treasuries. The 10-year Treasury yield rose by 4.4 basis points to 4.324%, and MBS fell by 2 ticks (.06).

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Week at a Glance: Key Trends Driving Mortgage Rate Movements

Mortgage rates are influenced by fluctuations in the bond market, which has seen minimal activity over the past three days. Consequently, there’s been very little variation in average mortgage rates day-to-day, with no change observed today. Various events and data points can impact bond movements, including scheduled congressional testimonies with the Fed Chair. However, today’s testimony by Fed Chair Powell did not significantly affect the market, as he reiterated familiar messages. The key takeaway regarding interest rates is their dependence on economic data, with some indicators being more pivotal than others. The Consumer Price Index (CPI) release on Thursday is particularly critical. Anticipation of this data has contributed to the current stability in bond and mortgage rates. While some fluctuations may occur before the CPI release, significant movement is almost certain afterward, whether for better or worse.

The Future of Mortgage Rates: Insights and Trends from July 2024

Customer service can significantly influence a company’s success. Have you ever felt irritated when someone ahead of you in a store struggles to find a pen to write a check? Starting July 15, this issue will be eliminated at Target Stores. Meanwhile, the U.S. Postal Service continues to lose customers to digital alternatives for sending letters or checks. After raising the cost of a first-class postage stamp to 68 cents in January, the Postal Service will increase the price again to 73 cents on July 14—a 5 percent rise and 10 cents more than at the beginning of 2023. This second price hike was announced in April. Legal changes also impact customers, and recent Supreme Court decisions, such as overturning Chevron deference, have significant implications for the mortgage industry. Attorney Brian Levy discusses these in his latest Mortgage Musings. (Today’s podcast is sponsored by nCino, creators of the nCino Mortgage Suite, which integrates the people, systems, and stages of the mortgage process to create a modern mortgage lending experience. Listen to an interview with nCino’s Casey Williams for insights into how to improve back-end lender operations.)

Morning Market Update: MBS Slide as Treasury Yields Rise

As the new week progresses, today’s market remains relatively stagnant. Overnight, yields saw a slight increase, although calling it significant might be an overstatement given the 10-year yield’s movement was under 3 basis points. During domestic trading hours, activity has been minimal, with yields fluctuating within an even narrower 1 basis point range, roughly between 4.29% and 4.30%.

Mortgage-Backed Securities (MBS) have shown more activity, with 6.0 coupons returning to positive territory after a sluggish start.

The performance of the Treasury yield curve sheds some light on this development, as 2-year yields remain steady while 10-year yields are up by 1.5 basis points for the day.

With little happening, attention turns to Federal Reserve Chair Powell’s congressional testimony at 10 am, which could potentially provide market-moving insights. Additionally, the Treasury auction cycle begins at 1 pm, though more significant fluctuations are anticipated in tomorrow’s 10-year auction compared to today’s 3-year auction.

Decoding the Latest Trends in Mortgage Rates: July 8, 2024 Update

Since July 1st, mortgage rates have been declining daily, except for the first day of the month. However, this trend spans only four business days. Recent rate drops have been modest, so most borrowers still receive the same interest rates as last Friday. Currently, the average top-tier conventional 30-year fixed mortgage rate hovers just above 7%. A significant change is expected with the release of the Consumer Price Index (CPI) data this Thursday. The CPI is a crucial indicator for mortgage rates, and this week’s report could confirm the positive trend seen last month, potentially bringing rates down into the 6% range. Other factors, such as Fed Chair Powell’s Congressional testimony, might introduce volatility, but the CPI remains the primary influence on mortgage rates.

Navigating the Mortgage Maze: Expert Insights from Pipeline Press

A recent password audit revealed that a blonde had chosen an unusually long password: MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento. When questioned about the lengthy choice, she explained that she was instructed the password needed to be at least eight characters and include at least one capital. Today is the day to change all your passwords. The internet is riddled with malicious activities around money (just look at credit union Patelco), but let’s shift focus to beneficial financial activities. “Location, location, location” remains a key factor in real estate, significantly affecting what new home buyers can afford across different regions. According to the Census Bureau, the median price and square footage of new single-family homes sold in 2023 varied greatly: $760,700 and 2,430 square feet in the Northeast, $396,300 and 2,172 square feet in the Midwest, $388,800 and 2,335 square feet in the South, and $536,200 and 2,170 square feet in the West. For more insights, check out today’s podcast, sponsored by nCino, which offers the nCino Mortgage Suite for modern mortgage lenders. It includes an interview with Candor’s Mark

Navigating the Mortgage Market: Key Insights for July 8, 2024

As the new week kicks off, bonds are settling into a comfortable range. This stability is commendable given that some weakness is typically expected at the beginning of Treasury auction weeks. Nonetheless, current trading levels still reflect a slight decline compared to the yield lows seen in late June. Although the overnight session showed minor weakness, domestic traders quickly corrected this by the 8:20 AM CME open, bringing levels back to neutral. There are no major economic reports scheduled today. The focus will largely be on Fed Chair Powell’s semi-annual congressional testimony set for Tuesday and Wednesday, while Thursday’s Consumer Price Index (CPI) data remains the main event to anticipate.