“Analyzing Recent Mortgage Market Trends: A Deep Dive into May 2024 Figures”

The month of May has generally favored mortgage rates, with most days seeing improvements, except for a slight two-day decline recently. This downturn, however, starts from a five-week low. Significantly, if we ignore the past two days, today’s rates would rank as the lowest in over a month. Essentially, the rates have only slightly retracted following a consistent positive run. One could argue that the positive run is only due to rates being at a high of over five months by April’s end, but that’s a debatable viewpoint. Essentially, determining the performance of rates often depends on relative comparisons. From a broad perspective, not much has changed. Rates may be nearing the highest they’ve been in decades, but there’s still a possibility they will remain below the peak seen in October 2023. Whether we can prevent a return to last year’s high rates will largely depend on forthcoming economic data. The recent Consumer Price Index (CPI) was tolerable enough to sustain optimism, but we’ll need stronger results in June and potentially July and August to confirm a genuine trend change.

“Exploring Market Trends: An Insightful Commentary on Mortgage-Backed Securities – May 17th, 2024 Edition”

The only economic report on the agenda for Friday is the index of Leading Economic Indicators (LEI) by the Conference Board. However, it’s not recognized as a swift influencer of the market, and even with a result of -0.6 compared to the predicted -0.3, it had no noticeable effect this morning. The upcoming week doesn’t bring much of an improvement in the planned data. The only impactful report is the S&P PMIs that happen on Thursday, though only the provisional version will be published (the final figures are set to release the same week as the ISM PMIs in early June). Consequently, the upcoming week will be predominantly filled with talks by the Federal Reserve, which haven’t brought anything novel for the past few months, making the incoming week rather uneventful.

This, when paired with the formal 3.5-day Memorial Day weekend and another 3 days (including today and this weekend), results in what could be called an informal 11-day weekend for bonds.

This doesn’t imply that the bond market will remain shut next week, or that there will completely be a lack of bond market activity. In spite of familiar Federal Reserve narratives, the jittery market could still react impulsively should certain Federal Reserve members say anything that could influence potential adjustments in the dot plot of June, which summarizes the Federal Reserve members’ predictions for the Federal Funds Rate.

The lack of intrigue regarding the Federal Reserve’s current perspective is emphasized by the chart that juxtaposes expectations of the Federal Funds Rate and long-term bond returns. As part of the mortgage market, we’re more interested in long-term yields, and these have moved appreciably over the past fortnight. However, the Federal Reserve’s outlook has stayed rather consistent since the Consumer Price Index data on April 10 (with a slight increase following the Personal Consumption Expenditures data at April’s end, and a minor rebound in May’s first week).

“Analyzing Future Trends and Impacts in the Mortgage Industry: A Deep Dive”

As the MBA’s Capital Markets Conference is just around the corner, attendees should remember to collect their badges. Interestingly, U.S. Secretary of State Antony J. Blinken is rumored to take center stage at a subsequent MBA conference, having recently initiated the Global Music Diplomacy initiative.

A crucial concern for the conference will be managing and assessing the value of servicing rights and their transference. The interest rates visible to borrowers are influenced by multiple elements, incorporating the price of mortgage-backed securities and that of servicing. This last component’s cost may not always accurately represent its worth.

While there exists a vibrant, liquid market with clearly displayed prices for securities backed by Agency mortgages, pricing servicing isn’t so straightforward. There’s no comparable market with visible pricing. Consequently, a pricing model is applied, comparing market value to Fair Market Value.

The model might place a certain value on servicing, but it may be traded at a unique, differing cost, causing discrepancy. Occasionally, the market may price a servicing package above its fair market value, but this is a rarity.

This week’s featured podcasts are provided courtesy of LoanCare, an acclaimed sub-servicer of mortgages known for its stellar customer experience delivery. LoanCare’s award-winning portfolio management tool, LoanCare Analytics, has a significant impact on customer engagement and liquidity and credit risk for MSR investors. Listen to an interview with Tim Braheem, a seasoned expert, discussing tactics originators can employ to garner more referrals. The interview comes with a complimentary script aimed at facilitating deal closures.

“Exploring the Weekly Mortgage Market Trends: A Comprehensive Recap for May 16, 2024”

Today marked the conclusion of the scheduled economic data until next week’s end. The data will not be of much relevance until around two weeks from now when the next PCE price index is released. Intriguingly, we have generally viewed Import Price data as not entirely relevant, but it seems to have shaken that perspective today. This change is mostly due to a significant divergence from expected figures (0.9 vs 0.3). Thus, a metric previously overlooked as insignificant suddenly contributed a small increase in the forecast for PCE. The day started with a slight weakness that stabilized promptly, followed by a slow, steady decrease throughout the day, leaving MBS down by a quarter point.

Economic Data / Events

Unemployment Claims

Reported as 222k against a forecast of 220k, down from 232k

Philly Fed Index

Reported as 4.5, down from an 8.0 forecast and 15.5 previously.

Import Prices

Reported as 0.9, up from a 0.3 forecast and 0.6 previously.

Building Permits

Reported as 1.44m, down from a 1.48m forecast and 1.467m previously.

Housing Starts

Reported at 1.36m, down from a 1.42m forecast and 1.287m previously.

Industrial Production

Reported at 0.0, down from a 0.1 forecast and 0.1 previously.

Market Movement Recap

By 08:35 AM, we saw minor losses following data release. 10yr still down 0.2 bps on the day at 4.339 and MBS down 2 ticks (.06).

By 11:01 AM, MBS held steady with the previous update (down 2 ticks or 0.06), but 10yr now up 1.8bps at 4.358.

By 02:33 PM, there was additional weakness with MBS down approximately a quarter point on the day, and 10yr up 3.6bps at 4.376.

As of 04:41 PM, we remained near the weakest levels with no significant changes in MBS and Treasuries versus the previous update.

“Unraveling the Latest Mortgage Rate Trends: An Insightful Review”

Typically, most lenders don’t alter their mortgage rates during an average day, unless certain movements occur in the fundamental bond market triggering mid-day revisions. A recent scenario saw a minor increase in rates, although its impact remains insignificant. Even with this change, the prevailing lender rates continue to hover around the lowest since the start of April. Rather than resting just below the 7% mark, the mainstream top-tier conventional 30-year fixed rate is now slightly above it. This dip in the bond market started after the import price data for the morning recorded higher figures than projected, and the decline continued steadily throughout the day. This might indicate the end of strong market vibes that rose from Wednesday’s inflation data; the rate market is expected to now stabilize and doesn’t seem to forecast further enhancements.

“Analyzing Recent Trends and Shifts in Mortgage Markets – May 16 2024 Insights”

Following the release of the Consumer Price Index (CPI) data, there’s a focused plan to steer clear of interpreting each commentary as a mere countdown towards the upcoming CPI. Instead, the focus moves towards the considerably active economic schedule in the first week of June, culminating with the jobs report on June 7th. Once that’s out, attention shift towards anticipating CPI could naturally follow. However, for now, pre-emptive market shutdowns for Memorial Day might kick off sooner.

Slight variations are noted in bond trading with minor gains turning into subtle losses post 8:30am economic data. The apparent weak performance should not be misinterpreted, as the trade levels remain comfortably within the range following yesterday’s CPI announcement. The morning’s push-back could be attributed to the Import Prices report, an unusual influencing factor. This time round, it has deviated significantly from its estimated value of 0.3 to actual value of 0.9.

“Exploring the Intricacies of Mortgage Market Developments: An Insightful Overview”

Next week’s MBA Secondary conference promises to offer an interesting blend of fun and educational experiences. A highlight sure to captivate attendees is the large hot dog in Times Square, set to expel confetti at midday. Beyond the frivolity, the conference offers an array of educationally rich activities. Attendees can gain insights about the economy, regulative bodies, and the latest product offerings by Agencies and aggregators. Recognizing the importance of every client, originators strive to provide a comprehensive product suite from their companies and vendors. On a positive note, homeowner equity recently reached an impressive almost $17 trillion, with property values in March recording a historic peak, as reported by Intercontinental Exchange. However, considering unit production this year, the MBA fears the upcoming period could see the lowest production recorded in decades. Despite previous conventions suggesting a possible drop in attendance, the conference atmosphere is projected to remain high spirited and positive. This week’s noteworthy podcasts are brought to you by LoanCare, renowned for its exceptional customer service and convenience, alongside providing a top-tier portfolio management tool, LoanCare Analytics. The tool notably assists MSR investors in enhancing customer interaction, managing liquidity, and credit risk. The podcast also includes an insightful future-focused discussion between Jay Voorhees of JVM Lending and Robbie on the prospects of mortgage origination. Stay updated on the latest in Lender and Broker Software, Products, and Services.

“Analyzing the Impact: A Review of Mortgage Bonds Market Performance – May 15, 2024 Recap”

In an anticlimactic turn of events, the much-awaited CPI data perfectly aligns with the predicted 0.3% growth on a month-to-month basis at the core level. While this does not meet the 0.17% growth required to maintain a 2.0% annual inflation target on average, it was sufficient to please bond traders for the day. Auxiliary support also came from Retail Sales which underperformed its forecast (0.0 vs 0.4), in contrast to last month’s exceptional 0.7% performance, now revised to 0.6%. This caused bonds to rally aggressively at first, before gradually pacing themselves throughout the afternoon. At the end of the day, 10-year yield levels replicated those prior to the April 10th CPI data release, creating an illusion as if the event never occurred.

Key Economic Data and Market Activities:

– Monthly Core CPI: Actual at 0.3% vs forecast at 0.3%, Previous at 0.4%
– Annual Core CPI: Actual at 3.6% vs forecast at 3.6%, Previous at 3.8%
– Retail Sales: Actual at 0.0% vs forecast at 0.4%, Previous at 0.6%

Market Fluctuations Recap:

– As of 08:39 AM: 10-year yield down by 6bps at 4.38, and MBS increased by nearly 3/8ths.
– As of 10:53 AM: Surprisingly steady within a new, stronger range, 10-year yield down by 6.5bps at 4.374, with MBS up 10 ticks or .31%.
– As of 01:01 PM: Continued steady gains since 10 AM, MBS up by 14 ticks (.44) and 10 year yield down by 9.4 bps at 4.345.
– As of 03:01 PM: Marginally off best levels, MBS up by 3/8ths and 10 year yields down by 8.8 bps at 4.351.

“Unraveling the Recent Shifts in Mortgage Rates – An Insightful Overview”

We’ve been focusing on potential rate fluctuations linked to today’s inflation data, the reasons for which have become clear with today’s figures. The Consumer Price Index (CPI), a significant and dependable gauge of momentum for interest rates regarding scheduled data, carries such weight, that even when results align perfectly with predictions, the impact can still be significant. As such, today’s inflation data didn’t deviate from predictions. On a month-over-month basis, core inflation stood at 0.3%, and annual inflation equated to 3.6%. The Federal Reserve is keen to see these figures drop to 0.1-0.2% monthly and 2% annually to feel confident about rate cuts. However, a precise 2% annually is not obligatory if the monthly figures indicate we’re firmly on that path. But, the current monthly figure pointed to potential annual inflation of 3.6% (0.3 x 12). Despite this being almost double the desired rate, the 0.3% monthly core inflation figure turned out to be a relief for bond traders, who immediately started to lower rates. Mortgage rates are primarily based on mortgage-specific bonds that significantly align with US Treasuries. Moreover, stagnant retail sales report for April assisted, defying predictions for a 0.4% increase. The resulting picture, combining as-anticipated inflation data with disappointing retail sales, indicates lighter inflation strain in comparison to the data from Q1, which was a welcomed relief for those hoping for lower rates. Consequently, mortgage lenders lowered their standard top tier traditional 30-year fixed rate to 6.99%, down from yesterday’s figure of 7.11%.

“Exploring the Future Landscape of Real Estate and Mortgage Industry: An Insightful Analysis”

There’s a myriad of misconceptions out there, and here are a few intriguing ones to clear up. First, Venturing into Manhattan will acquaint you with a peculiar character known as The Naked Cowboy residing in Times Square — just to clarify, he isn’t really naked. Meanwhile, a funny incident involving former US President, Jimmy Carter, is worth mentioning. Carter made an attempt to deliver a joke during a speech at a Japanese college post-presidency, only to find his long-winded joke condensed into a laugh command by the translator who wasn’t able to accurately translate the joke.

A prominent misunderstanding in the housing market is the assumption that home buyers must furnish a 20 percent down payment for a property’s purchase. In fact, the emphasis in our industry should be on the numbers of units dealt by underwriters and loan officers per day or month rather than the monetary transaction. The Mortgage Bankers Association anticipates amounts ranging from $1.5 to $2 trillion this year, despite it potentially being the lowest number of units in several decades.

Lastly, address the oblivious misunderstanding of Etienne Constable from California, who, tasked with the responsibility to obscure his boat from his neighbors’ sight by building a 6-foot fence, instead embellished the fence with a painting of his boat.

Lastly, with no mention of source reference, we’d like to present this week’s podcasts sponsored by LoanCare, a mortgage subservicer renowned for superb customer experiences which employ a mix of personalization and convenience. Its award-winning portfolio management instrument, LoanCare Analytics, caters to Mortgage Servicing Rights (MSR) investors with a concern for customer engagement, liquidity, and credit risk. Noteworthy is our conversation with LoanCare’s leaders Kevin Cooke and Eric Seabrook on various servicer-relevant topics, spanning dominant players in the MSR market, the repercussion of fewer Fed rate cuts, and servicing of home equity lines of credit and second lien.