“Exploring the Dynamics of MBS Market: A Summary of Key Events – May 24, 2024”

It’s now official that we’ve had an 11-day stretch devoid of any major rate fluctuations. This period was marked by the ability of 10-year Treasury yield to stay within the 4.34 – 4.50 scope, which was the single significant barrier needed to classify this week as uneventful in terms of broad scale rate momentum. This was made possible by a favorable adjustment in consumer inflation outlook today, with the barrier being overcome precisely. As a result, this count of business days coupled with the surrounding weekends sums up to 11 non-volatile days for bond market. The forthcoming week isn’t expected to hold much excitement in terms of crucial data, save for the PCE price index due for release on Friday.

As for the economic data and happenings, the enduring goods showed a growth of 0.7 against the forecasted -0.8, after the previous month’s figure was adjusted to 0.8 from 2.6. The consumer sentiment in its final phase marked 69.1, against the predicted figure of 67.5. The one-year inflation expectations came at 3.3 compared to the forecasted 3.5, while the five-year inflation expectation turned out to be 3.0 opposed to the projected 3.1.

The market movement recap suggests that buyers delayed until a safe read on consumer inflation expectations was achieved. Subsequently, there was a turn to the green, with 10-year Treasury yield dropping 0.2 bps at 4.474 and MBS remaining steady (up an eighth from lows). At 12:47 PM, there was stability at moderately reinforced levels, with MBS going up two ticks (.06) and 10-year Treasury yield dropping 0.6 bps at 4.47. The early closure occured at 2:50 PM without any significant fluctuations in mid-day prices observed in the preceding update.

“Understanding the Recent Shifts in Mortgage Rates: An Insightful Exploration”

In the financial markets, the seemingly uneventful week was highlighted by several speeches from the Federal Reserve that reiterated prevalent market speculation. The market, which previously predicted multiple rate cuts in 2024, now foresees only a single cut. A graphical representation of market expectations showed the Fed Funds rate at year-end – a futures contract that has been in circulation for some time. Notably, when the line descended in March and early April, it indicated the market’s expectation of a lower Fed Funds Rate by December. The orange line in this graph always signifies the rate at the December meeting. The current rate stands at 5.375, thus a value around 5.125 suggests one rate cut of 0.25%. Also, a rate cut at the July Fed meeting, once almost certain in April, is now considered highly unlikely. The April surge happened post the Consumer Price Index (CPI) release. While this week’s data and developments did nothing to hasten the pessimism surrounding rate cuts, they didn’t shift things the other way either.

Numerous Fed officials repeated rational responses to high inflation data in Q1. Here are some main takeaways, presented chronologically:

Jefferson discussed how the major surge in market rents during the pandemic might continue to elevate housing services inflation.

Barr noted that the Fed might need to continue its tight financial policy for some more time.

Barr further commented on Q1 inflation, saying it wasn’t reassuring enough to relax monetary policy.

Bostic suggested that there’s still a long way to go to achieve ideal inflation.

Daly expressed her lack of confidence about sustainable inflation reduction to 2%.

Mester mentioned that inflation progress stalled in the first three months and that the April CPI report was positive but premature to determine the future path of inflation.

Mester also suggested that rates could be held or even increased if inflation unexpectedly stagnates or declines.

Mester, who initially predicted three rate cuts for the year, now deems it inappropriate.

Bostic advocated waiting longer for a rate cut to ensure inflation does not become volatile.

Waller mentioned his need to witness several months of ideal inflation data before supporting a policy relaxation.

“Exploring the Future Landscape of the Mortgage Industry: A Comprehensive Analysis”

“Welcome to the inferno,” could aptly describe the sentiment of Times Square, as those freshly emerged from the Secondary conference might attest. Despite the pandemonium, attendees of the meeting can expect a repeat next year, from May 18-21, 2025, at the very same location and establishment. Beyond the conference and the chaotic Times Square, lies the vast expanse of Manhattan waiting to be discovered. In the next year, it’s anticipated that hot topics like Attorney Opinion Letters, potential savings on refinance and new development of Agency loans may remain in discussion. The intersection of real estate agents and LOs is also under scrutiny, especially in light of the unresolved NAR lawsuit. Lawyer Brian Levy shines a light on this issue in the segments, “Double Dipping and Conflicts of Interest” and “Employee or a Duck?”.

This week’s digital broadcasts are powered by Truv, an app that lets users verify their income, employment, assets, insurance, and even switch direct deposits. Delve into the potency of open finance with Truv, which featured an interaction with Joe Dombrowski, a Tour de France cyclist, discussing his potential shift from sports to residential lending in the latest episode.

Attention mortgage brokers! Kind Lending enthusiastically announces VIBE 2024’s return – the ‘Growth Mindset’ event primed to turbocharge your triumphs! Known as the mortgage industry’s singular growth mindset seminar, VIBE boasts speakers like Glenn Stearns, Grant Cardone, and Barry Habib. Be prepared for a thrilling lineup of speakers yet to be announced. Reserve your invitation to this upcoming seminar at the Pearl Theater within the beautiful Palms Casino Resort in Las Vegas, NV, scheduled for Friday, 10/18. Registration and sponsorship plans are now up for grabs! Surf over to www.kind-vibe.com to recap on VIBE 2023 or lock in your place at this exclusive, one-day seminar that champions a growth mindset. We eagerly anticipate seeing you in Vegas this coming October – the global hub of entertainment! The summary does not include any reference to the original source (eg. Realtor.com).

“Exploring the Dynamics of the Debt Market: A Detailed Outlook into May 24th, 2024’s Mortgage News”

Durable Goods has unequivocally established its relevance as a significant factor affecting the big ticket market, as demonstrated by the market’s non-responsive reaction to a significant variances in its recent data. While comparing +0.7 to -0.8 points out a large-scale discrepancy, there has been no notable movement in the market. While it’s true that the negative adjustment to the previous month’s data was even more substantial, markets have always had a proclivity for the most recent data, especially when they’re caught in anticipation of the initial hint of any major paradigm shift in inflation and growth.

If there’s no emergence of another risk triggering selling forces, there’s a high likelihood that this week will witness a trading range in 10yr yields from 4.34 to 4.50, fulfilling the so-called 11-day weekend prophecy, a rather exaggerated term considering the facts. Do not mention the source (ie. Realtor.com) in the summary.

“Exploring the Influence of Bonds on the Mortgage Market: A Recap on Market Analysis for May 2024”

Unexpectedly, the Services PMI experienced a powerful boost that tested its range limit. Possibly as a result of our regular attention to this week’s lack of large-scale market activators, or perhaps due to an intense response to one of the week’s infrequent potential market influencers—an output considerably larger than anticipated. Indeed, the common belief is anything occurring within a 4.34 to 4.50 range in the 10yr Treasury yields is dull. However, this universal opinion remained passive within the larger context, with today’s immediate spike from 4.42+ to 4.49+ following the S&P Global Services PMI data announcement proving to be as exciting as an otherwise bland event could be. Although the extent of the overcome is indeed shocking (54.8 compared to a projected 51.3), the market’s reaction to such an occurrence is reasonable.

Regarding Economic Data/Events:

Unemployment Claims:

Recorded were 215k VS a predicted 220k, with a previous number of 223k.

Chi Fed Activity Index:

Noted was -0.23 VS a predicted +0.125, with a previous number of 0.15.

S&P Global Services PMI:

Registered was 54.8 VS a forecasted 51.3, with an identical prior number of 51.3.

New Home Sales:

They stood at 634k VS a forecasted 680k, with a previous number of 665k.

Summary of Market Movements:

As of 08:35 AM, the overnight market was mostly balanced with minimal change after the announcement of data. The MBS gained 1 tick (.03), and the 10yr decreased by 0.8bps, leaving it at 4.415.

At 10:33 AM, the market weakened considerably following the PMI data release. The MBS lost just above a quarter point, while the 10yr added 7.1bps and reached 4.496.

By 02:35 PM, there was a slight recovery from the morning’s weak performance, with the MBS decreasing by 7 ticks (.23), while the 10yr added a mere 0.5 bps, reaching 4.474.

As of 03:28 PM, there was no change from the latest 3 PM CME close update. The summary does not contain reference to the source (for instance, Realtor.com).

“Critical Insights into Mortgage Rate Trends As of May 2023”

This week, there’s a noticeable scarcity of regular economic events and data, which usually trigger substantial shifts in interest rates. However, today’s services sector report provided one significant exception. While those interested in some volatility were not disappointed by the data, those expecting positive changes were less fortunate. The service sector PMI from S&P Global hit its highest point in a year, matching its most significant growth in over two years. It also revealed the steepest prices in 18 months. Unfortunately, these developments proved unfavorable for interest rates, prompting traders to raise bond yields swiftly. Mortgage lenders, who base their rates on bond market trading levels, reacted swiftly. Those who had not published their rates before the report was released adjusted them upward shortly afterward. Similarly, lenders who had already announced their rates for the day also revised them upward in response to the new economic data. However, the recent fortnight’s highs in mortgage rates are not overly significant given the relatively steady range during this period. More critical data and events are expected to emerge in the first half of June, potentially resulting in more notable shifts in the interest rate landscape.

“Exploring the Intricacies of the Mortgage Market: A Morning Overview of May 23, 2024”

We’re on the sixth day of the remarkable 11-day break, including a regular weekend, a three day stretch for Memorial Day, and the five weekdays in between without significant market movements. Going into this week, it was uncertain whether the general financial atmosphere would be as static and lackluster as it has turned out to be. Nevertheless, as of Thursday AM, every hint points to that being the case. One of the few events on this week’s economic calendar was the revealing of the Unemployment Claims data. However, as usual it didn’t make a large impact and today was not an exception. As for yields, they were generally steady after hours, with slight fluctuations in response to variations in the European bond market. Overall, the local trading session commenced almost exactly at the same levels as yesterday, displaying little change.

“Understanding the Impact of Inflation on MBS Markets: A Detailed Recap”

The market did not showcase any significant volatility in response to the release of the Fed meeting minutes from three weeks ago. The near-stable trading range of 10-year Treasury yields following the release spoke volumes about its uneventful nature, in line with our expectations. The insights provided in the Minutes bore no surprises, particularly to those well-acquainted with recent Fed updates. Bonds saw a minor downturn during the overnight session due to the surge in UK inflation, primarily affecting the shorter end of the curve. As a result, a minor underperformance was seen in MBS.

Review of Market Movements

At 11.23 AM, there were signs of moderate weakness overnight, driven by UK inflation, but the situation was mostly neutral by this time. MBS saw a decrease by 2 ticks (.06) with 10yr witnessing a half bp increase at 4.422.

As of 1:57 PM, markets moved away from the highest levels ahead of the Fed Minutes. MBS dropped an eighth with 10yr remaining unchanged at 4.417.

By 3:10 PM, there was a minimal market reaction to the Fed minutes with MBS down 5 ticks (.16) and 10yr increasing by 0.9 bps at 4.427.

“Forecasting the Future: An Insider’s Look at Mortgage Rate Trends for 2024”

The mortgage market has been experiencing a steady period, following a series of uneventful days over the past few weeks. This is largely due to the way the bond market, which governs rate fluctuations, reacts only to specific economic news and events. When these reports are released, rates see major shifts, however, during the remaining periods, the movement tends to be lethargic and lacks discernible direction. Today’s market drift led to insignificantly higher rates than what was presented yesterday. For the average mortgage borrower, this minor variance won’t be much of a concern. Prime 30-year fixed plans continue to hover slightly above 7% for most lenders, although real-world figures could demonstrate a notable range around these levels, reflecting variations in individual circumstances.

“Exploring Key Updates and Emerging Trends in the Mortgage Sector: A Comprehensive Review”

Many attendees jetting home from the conference this week were abuzz with knowledge acquired throughout the engagements. Highlighted discussions include climate change and disaster statistics. A memorable highlight was the chance for my son Robbie and I to meet with the founders of CapitalW Collective, a non-profit organization, in New York during the MBA Secondary. With Amy Creason, Pat Peters, and Leslie Winick at the helm, the Collective is working tirelessly to revolutionize the mortgage capital market to be more inclusive and vibrant, inviting inputs from all industry players.

However, not everything was going smoothly. The Consumer Financial Protection Bureau (CFPB), led by Director Chopra, expressed keen interest in the escalating costs related to acquiring credit reports. The concern is that a small number of firms monopolize the industry, imposing charges on every mortgage application or transaction across the country. Consequently, mortgage lenders can assess fewer applicants, and homeowners bear the brunt of the increased costs, usually at the conclusion of the process. The term “price gouging” was floated about, creating unease among credit professionals.

Featuring a discussion with new CEO of Figure Technology Solutions, Michael Tannenbaum on the evolution of the Home Equity Line of Credit (HELOC) and second lien segment in mortgage, this week’s podcast was brought to you by Truv. Truv empowers applicants to confirm their income, employment, assets, insurance, and alter direct deposits – this is the power of open finance.

In the realm of Lender and Broker Software, Products, and Services, a noteworthy industry update involves Usherpa, the pioneer of mortgage enterprise CRM technology. They have amplified their strategic collaboration with MortgageFlex, an original mortgage technology developer and the creator of the MortgageFlexONE LOS. Usherpa’s SmartCRM enjoys exclusive rights as the marketing automation and Relationship Engagement Platform linked to MortgageFlex Loan Origination System. Only MortgageFlex provides a cloud-native unified technology platform for both origination and servicing in the industry. Paired with Usherpa’s advanced Relationship Engagement Platform, this alliance is perfectly positioned to secure more business for lenders.