Coronavirus (or nCov for short) made more disconcerting headlines over the weekend and has generally proven itself to be far more capable in that regard than it's long lost cousin, SARS.  When the nCov market narrative first emerged in mid-January, the comparison to SARS was still unknown.  Now that the virus is unequivocally spreading faster, farther, and killing more people, markets are free to express more panic. But why panic?  It's not as if nCov will kill more people than the flu does each year, right?  So what's the big deal? In short, the big deal is that everyone is used to dealing with the flu.  There are well-established figured on how many people will probably get it and how many of those will die.  There's also a vaccine that is occasionally effective and that may at least mitigate symptoms even if it fails to prevent infection. nCov, on the other hand, is a new thing.  There's no vaccine yet.  There's no cure (fight it off or die).  There has even been some suggestion that the re-infection risk is much higher than that of the flu.  Despite all that, you'd still be well within your right to contend that it will not wipe out humanity.  I would not disagree, but that's not what matters. What matters is simply that a NEW disease has been virulent and deadly ENOUGH to force the global economy to slow down as events/plans are canceled or changed.  These events drive some small portion of economic growth.  Combine that with the general fear about going somewhere or doing something that the general public may feel in many parts of the world and commerce/consumption is guaranteed to decreasing before our very eyes by some yet-to-be-determined amount.  The net effect for financial markets is a flight-to-safety or a "risk-off" trade pushing bond yields and stock prices lower. The net effect for bonds specifically is a 10yr yield less than a decent few hours of trading away from all-time lows. In this environment, please understand that MBS cannot, will not, and should not be doing as well as Treasuries.  You wouldn't really want them to anyway.  Reason being: if MBS improved that quickly and a few lenders decided to adjust rates accordingly, it would produce massive lock fallout on top of the already massive prepayment speed increases.  The faster MBS are being paid off and the more locks that are falling out, the worse MBS will be able to keep pace with Treasuries in the first place.  MBS need to be the tortoise to the Treasury's hare in this case.  The upside is that even if the hare turns around and heads back in the other direction, the tortoise (with its satchel of mortgage lender rate sheets) could easily decide to keep heading for the finish line.

February 24, 2020 Download our Mobile App: Download our Mobile App: 30 Yr. Fixed 6.28% -0.01%   6.11% 7.26% 15 Yr. Fixed 5.65% +0.05%   5.54% 6.59% 30 Yr. Jumbo 6.25% +0.00%   6.25% 7.45% Compare Mortgage Rates from Local Lenders for Feb 24, 2020 Full Steam Ahead for Refi Boom as Rates Hit New Lows Fri, Feb 21, 2020 3:52PM Yesterday's mortgage rate commentary noted a fresh move down to the lowest levels in more than 3.5 years . With just a bit more improvement, the same is true today . This isn't some isolated opportunity. Rates have been pushing long-term lows off-and-on for months. In fact, we've spent more than 7 months in territory that makes refinancing attractive for big contingent of homeowners who purchased or refi'd in 2017-2018. Making the boom even boomier is the fact that folks who refi'd in early 2019 are already back in the money for another refi now. The numbers corroborate this. The Mortgage Bank... (read more) Mortgage News Daily Rate Change Points 30 Yr. Fixed 6.28% -0.01 0.00 15 Yr. Fixed 5.65% +0.05 0.00 30 Yr. FHA 5.94% -0.01 0.00 30 Yr. Jumbo 6.25% 0.00 0.00 7/6 SOFR ARM 5.62% +0.03 0.00 30 Yr. VA 5.95% -0.02 0.00 Updates Daily - Last Update: 9/8 Freddie Mac Rate Change Points 30 Yr. Fixed 6.50% -0.06 0.00 15 Yr. Fixed 5.60% -0.09 0.00 Updates Weekly - Last Update: 9/4 Mortgage Bankers Assoc. 30 Yr. Fixed 6.64% -0.05 0.59 15 Yr. Fixed 5.84% -0.19 0.84 30 Yr. Jumbo 6.58% -0.09 0.39 Updates Weekly - Last Update: 9/3 UMBS 30YR 5.5 101.26 +0.13   97.47 101.61 UMBS 30YR 6.0 102.53 +0.05   99.66 102.53 10 YR Treasury 4.048 -0.039   3.621 4.780 MBS Live Week Ahead: High Gear nCov Fear Pushing Rates Toward All-Time Lows Mon, Feb 24, 2020 10:58AM Coronavirus (or nCov for short) made more disconcerting headlines over the weekend and has generally proven itself to be far more capable in that regard than it's long lost cousin, SARS.  When the nCov market narrative first emerged in mid-January, the comparison to SARS was still unknown.  Now that the virus is unequivocally spreading faster,... (read more) MBS Price Change UMBS 5.0 99.74 +0.27 UMBS 5.5 101.24 +0.12 UMBS 6.0 102.54 +0.05 GNMA 5.0 100.06 +0.23 GNMA 5.5 101.19 +0.07 GNMA 6.0 102.13 0.00 Pricing as of: 9/8 4:40PM EST US Treasury Yield Change 2 YR Treasury 3.493 -0.025 5 YR Treasury 3.565 -0.024 7 YR Treasury 3.770 -0.031 10 YR Treasury 4.041 -0.046 30 YR Treasury 4.686 -0.084 Pricing as of: 9/8 4:40PM EST Other News Cheaper Construction Loans Mean More Custom Homes Mon, Feb 24, 2020 12:20PM Builders are finding that acquisition, development, and construction (ADC) loans in the last half of 2019 were both easier to access and less costly. That may be, in part, behind a fourth quarter 2019 surge in custom home building. The National Association of Home Builders' (NAHB's) quarterly survey of its builder and developer members found that the average... (read more) Existing Home Sales Showing Resilience and Lots of Potential for 2020 Fri, Feb 21, 2020 11:12AM If it's January it must mean fewer home sales. That, at least, has been the recent pattern according to National Association of Realtors (NARs). Existing home sales have bounced up and down on a near monthly basis. Strong sales in December, they rose 3.6 percent month-over-month, were expected to result in a slowdown in January and they did. Sales of single-... (read more) Delinquencies are at Lowest Levels Since 2000 Fri, Feb 21, 2020 9:49AM Tighter underwriting and a strong economy seemingly continue to be reflected in mortgage loan performance. In its "first look" at January loan data, Black Knight says the national delinquency rate hit the lowest level since they began tracking it in 2000. The rate, 3.22 percent, represents a 5.4 percent decline from December and 14.2 percent year-over-year. ... (read more) Controller, LO Jobs; Compliance and Servicing Events; Coronavirus Dominating Markets Mon, Feb 24, 2020 8:52AM With the coronavirus driving worldwide markets and politics dominating the headlines, who doesn’t like “easy?” Easy: Krispy Kreme is launching donut delivery. Thank you to Ken S. who passed along this report, brought to us by our friends at the NAR (or is it just “NAR”?), on the easiest places to buy a house this year . Surprisi... (read more) Latest Video Markets are pricing in aggressive response to coronavirus from Fed How home refinancing has stagnated the housing market Hogan: The market has taken notice now of the increase in virus cases outsi... Bonds signaling economic slow patch: Investment strategist Around the Web CNBC Fed's Mester sees 'downside risk' from coronavirus, but does not want to cut rates Reuters World must avert 'dramatic' effects of coronavirus on health, economy: U.N.'s Guterres Reuters U.S. CDC confirms 53 coronavirus cases, including repatriated citizens Reuters Markets bet Fed is pushed to cut rates in coronavirus response Calculated Risk Blog House Prices and Inventory CNBC The rate rout is heating up, and that could be good news for homebuilders CNBC Goldman cuts US first-quarter GDP forecast to just over 1% on the coronavirus CNBC Coronavirus fears could push mortgage rates past 4-year low CNBC Coronavirus fears could push mortgage rates past 4-year low Calculated Risk Blog Dallas Fed: "Texas Manufacturing Expansion Continues" Reuters Factbox: Charting the impact of the new coronavirus Calculated Risk Blog "Chicago Fed National Activity Index Points to an Uptick in Economic Growth in January" Redfin Housing Shortage Leads to Intense Competition Among Homebuyers

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