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Mortgage News Daily News Feed

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MBS RECAP: Attempting To Consolidate After Wednesday's Sell-Off

Posted To: MBS Commentary

MBS Live : MBS Afternoon Market Summary Treasuries had a bit of an easier time today than MBS, the latter feeling the effects of a shift in duration preference that has been historically unkind to Fannie 3.0 30yr Fixed MBS. So far in 2013, when 10yr yields have approached 2.0%, The lower end of the production MBS coupon range feels the biggest pinch. This has to do with the negative convexity inherent to MBS markets. In short, if the broad swath of interest rates in the financial world are at a certain level and moving higher, there is a certain point on the spectrum of liquid MBS coupons where liquidity begins to dry up and prices tend to fall much faster than higher coupons because investors don't want to be stuck earning interest at a lower rate in a rising rate environment. That's a bit...(read more)

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Mortgage Rates Carried Higher Still By Yesterday's Momentum

Posted To: Mortgage Rate Watch

Mortgage rates weren't quite finished with what they began on Wednesday, which was the worst we've seen in a long time . Despite bond markets managing to hold their ground for the most part today, rates were carried higher by yesterday's momentum--that is to say, lenders' rate sheets were worse this morning than yesterday afternoon despite the fact that trading levels in Mortgage-Backed-Securities weren't appreciably worse. (catch up with yesterday's big move: Why Did Mortgage Rates Skyrocket Past 2013 Highs on Wednesday? ) Considering that yesterday's rates were the highest in exactly one year, today's claim the "over a year" title and best-execution is pushing well into 3.75% for most lenders with some closer to 3.875% already. This isn't universally the case and a few lenders were closer...(read more)

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Can't Count on Low Rates Forever, Right? Why QE3 Could be Expensive; HUD disaster relief

Posted To: Pipeline Press

The Fed giveth, and the Fed taketh away. Both stocks and bonds fell on Wednesday after a Q&A session with Ben Bernanke , and minutes from the latest U.S. Federal Reserve meeting, shed some uncertainty on the schedule of QE3. We also had U.S. existing home sales move higher in April, +.6%, and so once again we have numbers showing a continued improvement in the housing market. Even though sales have likely been restrained by limited available inventory in recent months, the pace of sales reported for April was the strongest of the expansion to date (excluding the home buyer tax credit periods). The sales mix has also become healthier lately with distressed sales accounting for only 18% of the market in April, down from an average of 23% in 1Q and 28% in April 2012. The median price of an...(read more)

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New Homes Hit Record Median Price in April, Sales Rise

Posted To: MND NewsWire

New home sales rose 2.3 percent on a seasonally adjusted basis in April to an annual rate of 454,000 units . The Census Bureau and the Department of Housing and Urban Development also revised the March estimate of new home sales dramatically upward from 417,000 units to 444,000. The April rate of sales was 29.0 percent higher than the April 2012 rate of 352,000 units. On a non-seasonally adjusted basis there were 45,000 sales during the month compared to 42,000 in March. This brings the year-to-date total to 153,000 units. Sales fell in April in two of the four regions. In the Northeast the seasonally adjusted annual rate was 30,000 units, down 16.7 percent from March but up 3.4 percent from April 2012. Sales in the Midwest were down 4.8 percent to a rate of 59,000, an annual increase of 18...(read more)

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MBS MID-DAY: Treasuries Green, MBS Red

Posted To: MBS Commentary

MBS Live : MBS Morning Market Summary Mortgage markets are less than thrilled with the broader move into higher rates that was effectively confirmed yesterday, and we have 2 negative reprice alerts on MBS Live , early in the session to show for it. Although Fannie 3.0s managed to open in the green, it was only a byproduct of a resounding rally in Treasuries overnight from 2.06+ to 1.96 by 4:30am New York time. From then on out, Treasuries leaked higher in yield into Jobless Claims. MBS were dipped briefly into negative territory, but managed to "fade" the Claims data (FADE: jargon for trading in such a way that runs counter to the conventionally accepted suggestion of the data), but only for so long before stronger home sales data and the Fed's Treasury buying operation (which proved difficult...(read more)

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