The Downside of Ultra Low Rates Actions and reactions are as true in the bond market as in the natural world.  The equal and opposite reaction to a sub 3% 30yr fixed rate is a spike in the supply of new MBS.  From there, supply/demand 101 says we should see downward pressure on prices.  That's exactly what happened after the Fed was done buying for the day. Econ Data / Events 20min of Fed 30yr UMBS Buying  10am, 1130am (M-F) and 1pm (T-Th) Philly Fed Survey 24.1 vs 20.0 f'cast , 27.5 prev Jobless Claims 1.3m vs 1.25m f'cast , 1.31m prev Retail Sales 7.5 vs 5.0 f'cast , 18.2 prev NAHB Builder Confidence 72 vs 60 f'cast 58 prev Market Movement Recap 08:59 AM Bonds were stronger overnight, generally following weakness in stocks on yesterday's covid numbers and bank earnings.  The AM econ data helped extend the gains just a bit, but volatility remains muted.  10yr yields down just over 2bps and MBS up just over an eighth on the day. 11:17 AM Stocks have tried to stage a bounce since 5am, but haven't been able to get any decent traction.  Bonds are taking some solace in that with 10yr yields now down nearly 3bps and UMBS 2.0s up 6 ticks (.19). 01:34 PM It looks like the Fed's 1-1:20pm UMBS buying operation left sellers hanging (they weren't as capable of selling MBS as they would have liked).  That's putting some quick downward pressure on prices, but we're still nearly an eighth higher on the day. 03:27 PM MBS losses extended a bit and prices turned negative just after 3pm.  Broader bond markets have been weakening since 11am, which isn't helping.  Stocks are near domestic highs, now down less than half a % on the day.

July 16, 2020 Download our Mobile App: Download our Mobile App: MBS Commentary MBS Live Recap: The Downside of Ultra Low Rates The Downside of Ultra Low Rates Actions and reactions are as true in the bond market as in the natural world.  The equal and opposite reaction to a sub 3% 30yr fixed rate is a spike in the supply of new ... (read more) Housing News Another Massive Jump in Builder Confidence Economists talk about the potential for a V shaped recovery from the pandemic and that is exactly the pattern displayed by the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The HMI, a measure of builder confiden... (read more) Rob Chrisman Broker, Cost Analysis, Audit, Credit Tools; CFPB's Legal Action; Capital Markets I was on the phone yesterday with my psychic who told me, “You will live a long and healthy life if you abstain from anything that brings you joy.” Okay, I don’t really have a psychic. Besides, who could predict that an event in 202... (read more) Housing News New Home Sales Expected to Surge The Mortgage Bankers Association (MBA) is expecting new home sales to spike again in June, based on results of its Builder Application Survey (BAS). That survey shows that mortgage applications for new home purchases were up 20 percent from May and 5... (read more) Mortgage Rate Watch Mortgage Rates Fight The Urge To Move Higher Mortgage rates recovered to some extent today, after moving slightly higher on Friday and yesterday. The bond market (which underlies rate movement) was surprisingly resilient (good for rates) even as stock prices moved up roughly 1%. Rising stock pr... (read more) Housing News Mortgage Application Volume is Up, Forbearances Continue to Wane Mortgage application volume increased last week, bouncing back slightly from the prior holiday shortened period. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of volume, gained 5.1 percent on a seasonally adjusted ... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.89% +0.02% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.89% +0.02 0.00 15 Yr. Fixed 6.14% +0.02 0.00 30 Yr. FHA 6.38% 0.00 0.00 30 Yr. Jumbo 6.95% -0.03 0.00 7/6 SOFR ARM 6.24% -0.02 0.00 30 Yr. VA 6.40% 0.00 0.00 Updates Daily - Last Update: 6/5 15 Yr. Fixed Rate 6.14% +0.02% Rate Change Points Freddie Mac 30 Yr. Fixed 6.85% -0.04 0.00 15 Yr. Fixed 5.99% -0.04 0.00 Updates Weekly - Last Update: 6/5 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.92% +0.06 0.69 15 Yr. Fixed 6.21% +0.09 0.72 30 Yr. Jumbo 6.94% +0.09 0.72 Updates Weekly - Last Update: 5/21 MBS / Treasuries UMBS 30YR 5.5 98.98 -0.20 Price / Yield Change MBS UMBS 5.5 98.98 -0.20 UMBS 6.0 101.00 -0.16 GNMA 5.5 99.28 -0.19 GNMA 6.0 100.97 -0.13 Pricing as of: 6/5 8:37PM EST 10 Year US Treasury 4.3945 +0.0393 Price / Yield Change US Treasury 2 YR Treasury 3.920 +0.047 5 YR Treasury 3.990 +0.063 7 YR Treasury 4.202 +0.075 10 YR Treasury 4.396 +0.040 30 YR Treasury 4.879 0.000 Pricing as of: 6/5 8:37PM EST Latest Video Homebuilding stocks surge as sentiment climbs to pre-pandemic level. What's... Here are the jobs that are disappearing and booming because of Covid-19 Stocks drop after weak jobs data, company earnings—Three experts on how to ... July homebuilder sentiment jumps to 72, vs. 62 expected Around the Web CNBC Nancy Pelosi says coronavirus aid bill will cost at least $1.3 trillion, but 'that's not enough' Calculated Risk Blog Comments on Weekly Unemployment Claims Calculated Risk Blog Hotels: Occupancy Rate Declined 38% Year-over-year NAHB Eye on Housing Remodeling Market Shows Optimism despite COVID-19 CNBC Even if the $600 weekly unemployment boost is extended, payment could be delayed for weeks Calculated Risk Blog Retail Sales increased 7.5% in June CNBC Weekly jobless claims total 1.30 million, vs 1.25 million estimate CNBC August is shaping up to be 'ugly' if stimulus, extra unemployment runs dry for millions NAR - Realtor.com Low Mortgage Rates Could Hurt First-Time Home Buyers for Years To Come Calculated Risk Blog Fed's Beige Book: "Economic activity increased in almost all Districts, but remained well below where it was prior to the COVID-19 pandemic." CNBC If you file your taxes by today, Uncle Sam will pay up to 5% interest on your late refund Calculated Risk Blog NMHC: Rent Payment Tracker Finds Decline in People Paying Rent in July NAHB Eye on Housing Single-Family Permits Slow-Down in May

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