MBS RECAP: Slow but Strong Start to a Busy Week

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MBS RECAP: Slow but Strong Start to a Busy Week

Posted to: MBS Commentary
Monday, September 30, 2019 5:45 PM

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Bonds were slightly weaker in the overnight session. European bonds set the tone early, potentially in response to Draghi comments on the need for fiscal stimulus. US yields followed, but never at a pace that anyone would consider “alarming.”

10yr yields were a few bps higher by the time the day’s only data came out. Chicago PMI was much weaker than expected (47.1 vs 50.2) with a quarterly average at its lowest level since 2009. That was good enough for small but immediate improvement in bonds. Both MBS and Treasuries made it back to unchanged levels or…

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Daily Rate Update: Mortgage Rates Lowest in Weeks

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dailyrateheader.png
30 Year Fixed
3.72% -0.03
15 Year Fixed
3.35% -0.04
10YR Treasury
1.67% -0.0190
FNMA 30YR 3.5
102.61 +0.13
FNMA 15YR 2.5
102.20 +0.20
View Today’s Rates
Mortgage Rates Lowest in Weeks
September 30, 2019
Mortgage rate movement was fairly uneventful last week. The bond market (which is most directly responsible for driving day-to-day changes in mortgages rates) was focused on consolidating, meaning the gaps between lows and highs were getting smaller and smaller. At the same time, there wasn’t significant movement in the average trading prices of the bonds that underlie mortgages. In other words, rates were mostly sideways for much of the week.

Over the past few business days, the sideways momentum gradually began to give way to modest improvements. Lenders have been slow to adjust their rate sheet offerings, but as of today, the average lender is back in line with its lowest rates since September 9th. More than a few lenders offered mid-day improvements today. Those who didn’t will be able to catch up tomorrow morning, as long as the underlying bond market hasn’t moved too much by then.

Loan Originator Perspective

Bonds remained confined with their narrow recent range today, and my pricing improved minimally from Friday’s. DC impeachment drama hasn’t incited a rush to bonds yet, but could as details emerge. I’m still locking my October closings early, going case by case for November’s. –Ted Rood, Senior Originator

Today’s Most Prevalent Rates

  • 30YR FIXED -3.75%
  • FHA/VA – 3.375%
  • 15 YEAR FIXED – 3.375%
  • 5 YEAR ARMS – 3.25-3.75% depending on the lender


Ongoing Lock/Float Considerations

  • 2019 has been the best year for mortgage rates since 2011. Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections and as of September, it looks like such a correction is underway
  • Fed policy and the US/China trade war have been key players. Major updates on either front could cause a volatile reaction in rates
  • The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad, as well as trade war updates. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will lead to new long-term lows.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.

30 Year Fixed Rate Mortgage
30?w=360
15 Year Fixed Rate Mortgage
30?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 3.72% -0.03
15 Yr FRM 3.35% -0.04
FHA 30 Year Fixed 3.40% -0.04
Jumbo 30 Year Fixed 3.73% -0.02
5/1 Yr ARM 3.38% -0.02

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 3.79% 1.21 -0.12
30 Yr. Fixed 4.39% 1.12 -0.22
MBA ** hdr_arrow.png
30 Yr. Fixed 4.12% 0.38 +0.08
15 Yr. Fixed 3.48% 0.32 +0.06
30 Yr. Jumbo 4.07% 0.21 +0.04
30 Yr. FHA 4.01% 0.28 +0.04
5/1 ARM 3.58% 0.27 +0.02
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 3.64% 0.60 -0.09
15 Yr. Fixed 3.16% 0.50 -0.05
1 Yr. ARM 2.68% 0.20 +0.01
5/1 Yr. ARM 3.38% 0.40 -0.11

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 101.53 +0.14
30YR FNMA 3.5 102.61 +0.13
30YR GNMA 3.0 102.70 +0.20
30YR GNMA 3.5 103.98 +0.28
15YR FNMA 3.0 102.20 +0.20
15YR FNMA 2.5 100.86 +0.13
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.
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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 1.6257% -0.0118
5 YR 1.5456% -0.0180
10 YR 1.6680% -0.0190
30 YR 2.1140% -0.0167
Prices as of: 9/30/2019 5:06PM 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.
© 2019 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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Fannie and Freddie Allowed to Make Money Again

Fannie and Freddie Allowed to Make Money Again

Posted to: MND NewsWire
Monday, September 30, 2019 2:49 PM

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On Monday the government slightly loosened the leash on which it has held the two government sponsored enterprises (GSEs) for more than 11 years. In a letter signed by Treasury Secretary Steven Mnuchin and Federal Housing Finance Agency (FHFA) Director Mark Calabria, Fannie Mae and Freddie Mac will be allowed to retain a larger share of their profits to protect against any future financial downturns.

The two corporations, which continue to provide most of the mortgage market for the U.S., were placed in government conservatorship in August 2008 at the start of the Great Recession. At that time, under the terms of a Senior Preferred Stock Purchase Agreement (SPPA), they were permitted to borrow up to $100 billion (later increased to $200 billion) in order to withstand potentially billions of dollars in losses from mortgage loans that defaulted during the housing crisis. In return, the Treasury was granted senior preferred stock in the two corporations on which the two were obligated to pay a 10 percent dividend each quarter even though it took four years for them to return to profitability. In effect this meant they had to borrow from Treasury each quarter in order to pay Treasury its dividend. Each draw on the Treasury increased the Treasury’s Liquidation Preference.

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MBS Week Ahead: Range Breakout Guaranteed as Data and Calendar Collide

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MBS Week Ahead: Range Breakout Guaranteed as Data and Calendar Collide

Posted to: MBS Commentary
Monday, September 30, 2019 9:53 AM

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In the week just passed, the bond market committed to a perfectly sideways consolidation pattern after having moved down from the highest yields in more than a month. There were a few moderately relevant economic reports throughout the week and the bond market was surprisingly willing to react to several of them. That said, trade-related headlines hit the wires in close proximity to some of the econ data, thus muddying the waters of market movement investigation. To be sure, the biggest spikes in volume were definitely reserved for the unexpected news headlines, but…

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Sales, Management Jobs; Study on Helping Borrowers; The Fed and The Election

Sales, Management Jobs; Study on Helping Borrowers; The Fed and The Election

Posted to: MND NewsWire
Monday, September 30, 2019 8:19 AM

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The final day of Q3 already… Aside from F1 drivers, did you know that Ferrari employees are not allowed to buy Ferrari cars? The exotic car market certainly has its own price movements, with various models going up and down in price independently from economic conditions. In general consumer inflation hasn’t been a threat for decades, yet financial markets continue to be focused on it and influenced by it. And the financial markets can’t help but be influenced by politics. In favor of it or against it, thinking it is necessary or unnecessary, the impeachment inquiry is in the news. And quickly with it, for better or worse, come the jokes. For example, Indiana’s Carol K. sent along, “Wine Pairings for Impeachment Scenarios.” Analysts believe that the inquiry won’t directly impact mortgage rates, but it certainly shifts the focus off of other pressing issues and economic events.

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MBS RECAP: Perfect Adherence to The Trend

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MBS RECAP: Perfect Adherence to The Trend

Posted to: MBS Commentary
Friday, September 27, 2019 8:46 PM

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There’s never a way to be 100% sure that a consolidation trend will continue to guide the highs and lows in the bond market for any certain amount of time, but sometimes it seems like it should be. This week and especially this morning were two such occasions. Here was the chart from the morning’s commentary:

20190927 open

and here’s how the day ended up:

20190927 close

In other words, yields went just about everywhere inside the consolidation trend without actually breaking it.

The adherence to the equivocal trend is made all the more interesting by the presence of seemingly important …

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MBS Day Ahead: Bonds Doubling Down on Consolidation

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MBS Day Ahead: Bonds Doubling Down on Consolidation

Posted to: MBS Commentary
Friday, September 27, 2019 10:23 AM

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In the day just passed, bonds did their best to make it seem as if they were paying attention to various headlines and events without actually moving much at all. By midnight, yields had already unwound nearly half of Wednesday’s weakness, and for no particular reason! The domestic session didn’t add much to the gains, although a case could be made for political headlines providing general guidance. Still, that was more of a stock market sort of thing.

At first glance, the stock market is in a similar position as bond yields. Both rose fairly quickly…

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