“Exploring the Surprising Upswing in Mortgage Application Volume: January 2024 Report”

Week ending January 12 saw a continuation of robust mortgage application activity post-holidays. There was an increase in the Market Composite Index, which gauges mortgage loan application volume, by 10.4 percent from the preceding week’s figure, according to the Mortgage Bankers Association (MBA). The previous week saw a 10 percent rise in the index, though it was adjusted to factor in the New Year holiday. When unadjusted, the index climbed by 26.0 percent. The Refinance Index saw an 11.0 percent increase from the week before and was up 10.0 percent compared to the same week a year earlier. The proportion of refinancing among total applications was 37.5 percent, slightly down from 38.3 percent the previous week. Meanwhile, the Purchase Index rose 9.0 percent after seasonal adjustment and 28.0 percent prior to adjustment, although it is still 20 percent down year-on-year.

Joel Kan, Vice President and Deputy Chief Economist at MBA, pointed out that last week saw a decrease in mortgage rates across the board as Treasury yields dropped in response to new inflation figures. This boosted mortgage applications. The 30-year fixed-rate dropped six basis points to 6.75 percent, the lowest in three weeks. Both purchase and refinance applications witnessed an increase during the post-holiday week, primarily driven by the conventional market. While purchasing activity continues to trail last year’s levels, refinancing applications have begun to pick up from their recent dip, though they remain relatively low. Kan adds that if mortgage rates continue to fall, there is cautious optimism for a potential uptick in home purchases in the forthcoming months.

“Exploring the 10% Surge in Mortgage Demand: How Lower Interest Rates are Attracting Homebuyers”

The overall quantity of mortgage applications saw a notable surge of 10.4%, in contrast to figures from the week prior. This information, factoring in seasonal adjustments, is derived from the index of the Association of Mortgage Bankers.

“Insight into the Rising Treasury Yields and their Effect on Mortgage-Backed Securities – A Comprehensive Analysis”

The previous week witnessed a generally moderate fluctuation, yet bonds successfully overturned a fortnight of losses with 10-year yields declining from 4.05 to 3.95. This improvement was significantly amplified by Friday’s PPI data results. As we move into the current week, bonds are reconsidering the past week’s assertive approach. At a casual glance, it could be interpreted as an inexplicable surge in yields, pushing the 10-year back into its former consolidation band.

Nevertheless, it’s essential not to forget that other financial sectors remained active on Monday. Indications from the Treasury futures suggest that the weakness has been steady and straight-line.

The final analysis may not vary significantly. In either scenario, it can be inferred that there’s been some form of a short squeeze or an excess of short covering leading into the weekend, causing trading levels to gradually level out. This positioning offers a more balanced stance from which to interpret the upcoming reports from Fed’s Waller (later today) and Retail Sales (tomorrow).

“Exploring the Latest Trends in Mortgage and Real Estate: A Comprehensive Analysis”

Recognizing our elders becomes a challenge as youthful generations take the stage. It seems to mirror the difficulty of finding a bank willing to step outside its usual territory and offer loans. It’s not hard to encounter individuals between the ages of 30 and 40 – the median age in the U.S. lies at 38. The industry is rife with individuals hitting their fourth decade, resembling the iPhone 6 model: perhaps not as flashy as the new releases, but reliable and cost-effective nonetheless. On the topic of times past, it was highlighted yesterday that ‘Happy Days’ made its debut on ABC a half-century ago; it lasted a decade until mid-1984. Despite being set in Milwaukee, it was filmed in California home to nearly a quarter of residential loan production and recently in headlines because of its ADU policy. You can tune into today’s podcast featuring a recruiting expert’s advice on how job contenders can make themselves stand out and common resume mistakes, courtesy of nCino Mortgage Suite. Its three main products (nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics) aim to connect the dots along the mortgage process. Spring EQ, topping the list as the best non-bank and sixth overall home equity lender as per Bankrate data, is aware that finances might be tight post-holiday season. Their fixed-rate equity loans and variable-rate HELOCs could just be the solution for your borrowers to spring back from seasonal debts without having to refinance their low first mortgage rate. Try their Pricing Calculator for quick loan pricing and don’t forget, partnering with Spring EQ can earn you up to 2.5 percent broker compensation on HELOCs and HELOANs. Kick start the new year by participating in their webinar today, exploring why borrowers are opting to tap into their home equity. Choose Spring EQ for all your second mortgage requirements. Become a partner or get in touch with your Account Executive today.

“Empowering Gen Z: Essential Steps to Establish Credit Before Leasing Your First Home”

While there’s a noticeable downward trend in the cost of renting, rates have yet to reach the realm of affordability. In the interim, renters can equip themselves with three strategic approaches.

“Exploring the Wonders and Risks of the Mortgage Market: A Detailed 2024 Analysis”

The past week presented a favourable performance in the bond market, even more so than forecasts anticipated, considering the core monthly Consumer Price Index (CPI) meeting its estimation of 0.3. The market displayed increasing bullishness and resilience, seemingly due to rumours surrounding the Federal Reserve’s (Fed) upcoming perceived amicability despite the sharp fall in rates at the closing stages of 2023. Speculators expect insights into the Fed’s future strategy at Waller’s forthcoming Tuesday appearance. The validity of this prediction remains uncertain; however, if true, the week ahead promises intriguing developments.

Economic Data / Events

Month-on-Month Core Producer Price Index

0.0 compared to a forecast of 0.2 and the previous figure of 0.0

Market Movement Summary

At 09:34 AM, despite a slightly weaker position overnight, the market was stronger following the Producer Price Index data, with the ten-year rate down by 2.7 basis points at 3.948. Mortgage-backed securities (MBS) increased by 3 ticks (0.09).

By 02:37 PM, the market was moving sideways to slightly weaker but showing signs of stabilising as the afternoon progressed. MBS had gone up by 2 ticks (0.06) and the ten-year rate had decreased by 1.9 basis points to 3.956.

By 04:45 PM, the market showed sustained resilience as MBS increased by 3 ticks (0.09) and the ten-year rate fell to 3.939 after a decline of 3.6 basis points.

“Understanding the Intricate Dance of Mortgage Rates: A Deep Dive into 2024 Predictions and Trends”

This week saw the awaited release of the Consumer Price Index (CPI), a significant indicator of monthly inflation. While some hoped this would signal a return to desired inflation levels at the Federal Reserve’s target, the outcome was somewhat underwhelming. Regardless, interest rates, which largely rely on trade activities in the bond market, managed to drop slightly. Typically, high inflation drives up bond yields/rates, and the market has been awaiting signs of decreased inflation to enable a decline in interest rates. The CPI has previously incited significant changes in rates and had shown promising signs of reaching inflation rates conducive for significantly reduced rates in the recent months. However, the CPI has been misleading in the past, which has left traders cautious. The report released this week did not confirm a solid defeat of inflation, nor did it suggest particularly concerning outcomes. This resulted in a negligible response from rates to the CPI release, with a slight lean towards a marginal increase. However, the following day’s Producer Price Index (PPI) provided stronger evidence of mild inflation, as both CPI and PPI have been trending downwards, with the PPI returning to target levels.

“Analyzing the Mortgage Market Trends: An Insight into MBS and Bond Market Performance for January 2024”

The Producer Price Index (PPI) provides an early indication of inflationary trends at the wholesale stage. Although it’s not generally regarded as a robust or impactful influence on market trends, there are times when it creates a noticeable ripple. A recent example of this was when PPI diverged from forecast consensus on inflation, which differed from the previous day’s Consumer Price Index (CPI) findings. In fact, the CPI’s crucial component (core Month-on-Month) stood at 0.3, aligning with the forecast, while the PPI reported a contrasting core Month-on-Month of 0.0 against a 0.2 projection. This created a minor trading opportunity in the market.

A critical reflection poses the question of why the market doesn’t give more weight to the PPI? At first glance, PPI appears to be a reliable advanced indicator. However, consider the 2015 period, when PPI dipped close to zero and CPI continued its upward trend without any significant drop.

“Exploring Future Market Predictions and Key Economic Factors Impacting Mortgage Industry”

A fellow loan officer contacted me recently, relaying a conversation she had with her hairstylist. They discussed the stability differences between occupations, such as the consistent income stream a hairstylist receives versus the volatility in our mortgage industry. Looking ahead to 2024, everyone in our sector is hoping for a decent year.

The topic of consistent back-and-forth in income brought up an interesting point; while folks may not need mortgages frequently, they certainly need frequent haircuts. As for our industry, lending institutions are diligently working to secure at least some profitability. Industry moves are often collective, influenced by rate changes, regulatory stipulations, or volume shifts.

Despite seeing an increase in loan agreements in November – leading to solid December earnings for many – companies have reverted to evaluating overhead costs, tech investments, investor demographics, and lead generations. As for lead generation, BankingBridge shared its list of the best mortgage lead providers for 2024, which includes Bankrate, BestMoney, Credit Karma, LendingTree, Money, Movoto, NerdWallet, Own Up, and Zillow, without advocating for or against any of them.

Currently, the lending industry is exploring verification platforms like Truework, which consolidates all verification processes. Such solutions aim to minimize disruptions, optimize the borrower experience, and curb the financial implications of income verifications. Check out this week’s podcast for more insights.

“Understanding the Unusual but Welcome Stability in Mortgage Bonds: A Recap of Market Movements on January 11, 2024”

Despite the build-up, the release of today’s Consumer Price Index (CPI) was fairly unremarkable. The core month-by-month statistics were as predicted, albeit with slightly higher unrounded numbers and a few factors that raised concerns about steady, moderate inflation. The initial response was unsurprisingly negative, although there was some recovery in the bond market, particularly at the shorter end of the yield curve, given the forthcoming auction for long-term bonds. After the auction and following some potential support from Federal Reserve remarks, international news headlines, and a sizable trade at the CME, the longer-term bonds made some progress. Still, 10-year bonds continued to hover within the week’s typical range, signaling an overall mundane end to the day known for CPI release.

Regarding key economic data:

The month-on-month core CPI was at 0.3, which matched the forecasted and last month’s figure. The year-on-year core CPI was 3.9, higher than the expected 3.8, but less than the previous data which was at 4.0. Unemployment claims were lesser than expected at 202,000 compared to 210,000 predicted and the previous figure of 203,000.

Here’s a brief reiteration of the market fluctuations:

At 8:41 AM, markets weakened following CPI, with the 10yr rising by 1bp at 4.042 and the MBS down by 7 ticks (0.23).
By 11:35 AM, there was a satisfactory recovery from the initial weakness, with MBS going up with 3 ticks and the 10yr hovering at 4.043.
At 1:41 PM, the Treasury auction did not cause much disturbance to the market.
By 2:33 PM, a gigantic block trade of 5s ignited a boost bringing the 10yr down to 3.99 and the MBS up 9 ticks.
As of 4:10 PM, the market maintained its gains, with the 10-year at 3.985.