MBS RECAP: Month-End Quells Volatility, but Keeps Bonds Green

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MBS RECAP: Month-End Quells Volatility, but Keeps Bonds Green

Posted to: MBS Commentary
Tuesday, March 31, 2015 5:12 PM

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It’s rare that I’ll decide to include a chart with a shorter maturity yield curve constituent in the Day Ahead. In this morning’s case, that happened to be the 3yr Treasury note, and 3’s continued outperforming 10’s and MBS today through the official 3pm close. In fact, the so-called “belly” (3, 5, and 7yr Treasuries) were the epicenter of month-end bond market strength, but fortunately, they were strong enough that 10’s and MBS were able to come along for the ride.

The yield curve levels (one Treasury yield minus another) between various maturities were the best technical…

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Daily Rate Update: Mortgage Rates Inch Lower to End March; Volatility Ahead

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dailyrateheader.png
30 Year Fixed
3.73% -0.02
15 Year Fixed
3.03% -0.02
10YR Treasury
1.93% -0.0244
FNMA 30YR 3.5
105.06 +0.17
FNMA 15YR 2.5
104.80 +0.11
View Today’s Rates
Mortgage Rates Inch Lower to End March; Volatility Ahead
March 31, 2015
Mortgage rates fell again today extending a 3 day winning streak after shooting abruptly higher in the middle of last week. That damage hasn’t been completely undone yet, and we shouldn’t expect it to be, given that underlying trading levels in bond markets have yet to make it back to the stronger levels seen last Tuesday. In addition, it’s the nature of the mortgage market for rates to move up more abruptly than they move down.

3.75% remains the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios. Most of the lenders that moved up to 3.875% with last week’s spike are now back down to 3.75% and a few of the most aggressive lenders are offering 3.625%, but the vast majority are at 3.75%.

Markets have been largely preoccupied with the month/quarter end trading process. While traders typically react to news and economic data, there are other reasons to move money beyond the the direction of the economy. Many investors are tasked with investing according to the decisions of their clients. Month-end, and especially quarter-end are busier times for this sort of housekeeping trading.

Even so, the morning’s economic data managed to create volatility, but it was subdued compared to what it might have been if not for the month/quarter-end environment. Naturally, with tomorrow marking the beginning of a new month, traders will have more liberty to react to the regular set of inputs. Incidentally, those inputs increase in importance, meaning there is an exceptionally wide range of possibilities tomorrow, for better or worse.


Loan Originator Perspective

“Month/Quarter end has been positive for bonds, but the gains have not been substantial. Lender rate sheets are slightly improved today. A new month and jobs data begins tomorrow which has me on the defensive side. The trend has been for rates to worsen heading into the non farm payrolls report which will be released on Friday. With today’s modest gains, i think it would be wise to lock in. ” –Victor Burek, Open Mortgage

“Just as the college basketball world has their big event coming up in the form of this weekends Final Four, we have ours coming up on Friday with the NFP jobs report. After getting through Monday and Tuesday’s relatively quiet month end gyrations and activitities things pick up starting tomorrow the the ADP jobs # and the ISM report. Jobless claims on Thursday could, but may not, add to any volatility/positioning ahead of Friday’s jobs report. As the Fed is now saying they’re more data dependent on when to raise rates I’d think a defensive approach may be prudent as far as your lock/float decisions go. And most definitely if you’re closing soon. The rest of the week should be interesting.” –Jeff Anderson, Loan Officer, Salem Five Mortgage, LLC


Today’s Best-Execution Rates

  • 30YR FIXED – 3.75
  • FHA/VA – 3.5
  • 15 YEAR FIXED – 3.125
  • 5 YEAR ARMS – 2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013. The catalyst was Europe and the introduction of European quantitative easing.
  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates. The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher. There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March. This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets. On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates. Others believe that the global economy is turning a corner and rates will grind higher. That creates a lot of volatility, and volatility is bad for mortgage rates. One result is that they have a slightly harder time keeping pace with movement in Treasuries. That can be good or bad, depending on which way markets are moving. The other result is that there really is no way to be sure that today’s rates will be available a few hours from now. They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.
  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’ Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy. It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method).

30 Year Fixed Rate Mortgage
31?w=360
15 Year Fixed Rate Mortgage
31?w=360&p=15YRFRM

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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 3.73% -0.02
15 Yr FRM 3.03% -0.02
FHA 30 Year Fixed 3.40% -0.10
Jumbo 30 Year Fixed 3.60% -0.02
5/1 Yr ARM 3.05% -0.08

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 3.47% 1.11 +0.02
30 Yr. Fixed 4.33% 1.33 -0.01
MBA ** hdr_arrow.png
30 Yr. Fixed 4.01% 0.39 +0.05
15 Yr. Fixed 3.29% 0.30 +0.02
30 Yr. Jumbo 4.02% 0.27 +0.07
30 Yr. FHA 3.80% 0.20 +0.04
5/1 ARM 3.18% 0.40 +0.13
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 3.69% 0.60 -0.09
15 Yr. Fixed 2.97% 0.60 -0.09
1 Yr. ARM 2.46% 0.40 +0.00
5/1 Yr. ARM 2.92% 0.40 -0.05

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 102.25 +0.17
30YR FNMA 3.5 105.06 +0.17
30YR GNMA 3.0 102.94 +0.20
30YR GNMA 3.5 105.34 +0.19
15YR FNMA 3.0 104.80 +0.11
15YR FNMA 2.5 102.66 +0.14
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
2 YR 0.5591% -0.0275
5 YR 1.3750% -0.0390
10 YR 1.9301% -0.0244
30 YR 2.5434% -0.0106
Prices as of: 3/31/2015 4:31PM EST

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About This Report
Mortgage News Daily is a trusted source of mortgage rate market data and analysis, with over 1 million readers each month. Unlike many rate surveys, our survey is conducted on a daily basis and is designed to bring you the most current and accurate rate data available. We use a proprietary formula to calculate averages based on best-execution rates from top lender’s rate sheets, also taking into account feedback from hundreds of mortgage market professionals around the country.
© 2015 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
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This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates presented in this report are averages and are subject to change without notice.
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Daily Newsletter: Mortgage Rates Inch Lower; New Indicator says Housing Healthy, Downturn Unlikely; More Cities Seeing Flattening Home Prices

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dailynewsletter.png
30 Year Fixed
3.73% -0.02
15 Year Fixed
3.03% -0.02
10YR Treasury
1.93% -0.0244
FNMA 30YR 3.5
105.06 +0.17
FNMA 15YR 2.5
104.80 +0.11
View Today’s Rates
Tuesday March 31, 2015
Mortgage Rate Watch – 4:46PM
Mortgage Rates Inch Lower to End March; Volatility Ahead
Mortgage rates fell again today extending a 3 day winning streak after shooting abruptly higher in the middle of last week. That damage hasn’t been completely undone yet, and we shouldn …
MND NewsWire – 3:03PM
New Indicator says Housing is Healthy, Downturn unlikely
Nationwide said on Tuesday that the overall housing market is healthier than at any time since 2001 , the earliest point for which data is available and that data suggests there is …
MBS Commentary – 12:43PM
MBS MID-DAY: Month End Sees Complex Dance Between Stocks, Bonds, and the Yield Curve
After a relatively uneventful overnight session, bond markets began the day in slightly stronger territory. The shorter end of the yield curve began the day in much stronger territory …
MND NewsWire – 10:47AM
Fewer Cities Bucking Flattening Home Price Trend
Home prices flattened on a month-over-month basis in January even as annual prices continued to increase S&P Dow Jones Indices said today. The Case-Shiller indexes for national …

Latest Video


Closing Bell Exchange: Rate hike predictions

Santelli: Fed won’t remove punch bowl

Will jobs report disappoint?

More News from ‘Around the Web’

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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 3.73% -0.02
15 Yr FRM 3.03% -0.02
FHA 30 Year Fixed 3.40% -0.10
Jumbo 30 Year Fixed 3.60% -0.02
5/1 Yr ARM 3.05% -0.08

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 3.47% 1.11 +0.02
30 Yr. Fixed 4.33% 1.33 -0.01
MBA ** hdr_arrow.png
30 Yr. Fixed 4.01% 0.39 +0.05
15 Yr. Fixed 3.29% 0.30 +0.02
30 Yr. Jumbo 4.02% 0.27 +0.07
30 Yr. FHA 3.80% 0.20 +0.04
5/1 ARM 3.18% 0.40 +0.13
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 3.69% 0.60 -0.09
15 Yr. Fixed 2.97% 0.60 -0.09
1 Yr. ARM 2.46% 0.40 +0.00
5/1 Yr. ARM 2.92% 0.40 -0.05

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 102.25 +0.17
30YR FNMA 3.5 105.06 +0.17
30YR GNMA 3.0 102.94 +0.20
30YR GNMA 3.5 105.34 +0.19
15YR FNMA 3.0 104.80 +0.11
15YR FNMA 2.5 102.66 +0.14
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
TR_Eikon_Email.png
2 YR 0.5591% -0.0275
5 YR 1.3750% -0.0390
10 YR 1.9301% -0.0244
30 YR 2.5434% -0.0106
Prices as of: 3/31/2015 4:31PM EST

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This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates and terms are subject to change without notice.
© 2015 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
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New Indicator says Housing is Healthy, Downturn unlikely

New Indicator says Housing is Healthy, Downturn unlikely

Posted to: MND NewsWire
Tuesday, March 31, 2015 12:03 PM

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Nationwide said on Tuesday that the overall housing market is healthier than at any time since 2001, the earliest point for which data is available and that data suggests there is little reason to fear a national housing downturn over the next year.

The insurance and financial services organization unveiled a new housing market indicator, the Leading Index of Health Housing Markets (LIHHM). The indicator’s national score as well as regional readings and breakdowns will be released quarterly in Nationwide’s Health of Housing Markets (HoHM) Report. (As an aside, we wonder if anyone at Nationwide ever pronounced that acronym aloud.)

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MBS MID-DAY: Month End Sees Complex Dance Between Stocks, Bonds, and the Yield Curve

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MBS MID-DAY: Month End Sees Complex Dance Between Stocks, Bonds, and the Yield Curve

Posted to: MBS Commentary
Tuesday, March 31, 2015 12:43 PM

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After a relatively uneventful overnight session, bond markets began the day in slightly stronger territory. The shorter end of the yield curve began the day in much stronger territory, carrying on the theme discussed in the Day Ahead charts. As the morning progressed, longer-dated bonds were clearly sold for two reasons. The first–and probably biggest–motivation was the age-old, super simple asset allocation trade. In other words, bonds were sold so stocks could be bought at the open.

Secondarily, month-end tradeflows look like they’re attempting to keep…

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Update from MBA Tech Conference; What Percentage of Lenders is Testing TRID?

Update from MBA Tech Conference; What Percentage of Lenders is Testing TRID?

Posted to: Pipeline Press
Tuesday, March 31, 2015 8:26 AM

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Amelia Earhart was quoted as saying, “Never interrupt someone doing something you said couldn’t be done.” Few thought that the refi boom could have lasted this long, yet it is still alive. Sure refis are bound to taper off – that is a safe bet. But mortgage refinance share rose further in February according to Ellie Mae Origination Insight Report, jumping 8 percent to 59 percent of lenders’ loan volume, compared to 41 percent of purchase loans, down from 48 percent a month earlier. Conventional loans dominated the market at 69 percent in February, compared to 19% for FHA loans and 9% for VA loans. The average interest rate for a 30-year fixed rate mortgage fell from 4.154 percent to 4.008 percent, the lowest level in two years and the average interest rate for 30-year fixed FHA loans fell below 4% for the first time since June 2013. Click here to read more about the monthly findings in Ellie Mae’s Origination Insight Report.

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