Its Arc Home lending business made money in December and January as the company leans more into home equity originations, which helped financial performance.

The companies did not disclose a purchase price, nor how many of the Houston-based Nations Reliable Lending employees would join the Ohio firm.

Bonds Start Week Off With a Bang

After a weaker overnight session, bonds bounced back swiftly after this morning’s ISM Manufacturing data. The headline was roughly as-expected, but sharply weaker employment and “new orders” outweighed the highest “prices paid” component in more than 2 years. It took less than 15 minutes for moderate losses to flip to moderate gains.  Very little happened after that apart from a slow and mostly steady trickle to even stronger levels. It bears repeating that the gains were centered on econ data as opposed to any other news. 

Econ Data / Events

ISM Manufacturing 

50.3 vs 50.5 f’cast, 50.9 prev

ISM Prices

62.4 vs 56.2 f’cast, 54.9 prev

ISM Employment

47.6 vs 50.1 f’cast, 50.3 prev

ISM New Orders

48.6 vs 54.6 f’cast, 55.1 prev

Market Movement Recap

10:09 AM Bouncing back to positive territory after ISM data.  MBS unchanged and 10yr down 2.1bps at 4.194

01:10 PM Stock losses spilling over to help bonds again.  10yr down 4.1bps at 4.174.  MBS up 2 ticks (.06).

03:22 PM Best levels of the day.  MBS up 3 ticks (.09) and 10yr down 5bps at 4.165

Treasury Secretary Scott Bessent expects the U.S. housing market to quickly pick up steam after recent indicators came in below forecasts.

California leads the nation with over 1.5 million at-risk properties, but many threatened homes sit east including $68 billion worth of Florida real estate.

Nexpoint Real Estate Opportunities has now made its own bid for the REIT, just days prior to a special meeting to vote on the merger with Ready Capital.

The Consumer Financial Protection Bureau’s decision to no longer pursue its enforcement action against the credit reporting bureau marks the eighth lawsuit dropped by the agency in recent days.

Authors in two separate Urban Institute papers warn how headcount reductions at the entities could negatively impact borrowers, taxpayers and the housing market.

Bonds End The Week and The Month at Best Levels

Both MBS and Treasuries were easily at their best levels of the month as of today’s close (whether you want to use the 3pm CME close or the 4pm NYSE close, which can be more of a consideration for bonds on a month-end trading day). The bond strength was all the more notable in light of a fairly swift bounce in the stock market.  PCE data in the morning was a relative non-event.  If anything, it helped pave the way for the stronger momentum thanks to the unrounded core month-over-month numbers coming in below forecast. From here, we turn our attention to next week’s bigger ticket econ data, culminating in the next jobs report on Friday.

Econ Data / Events

Core PCE Price Index, MM

0.3 vs 0.3 f’cast, 0.2 prev
Unrounded, .285

Core PCE Price Index, YY

2.6 vs 2.6 f’cast, 2.9 prev

Market Movement Recap

09:45 AM Modestly stronger after data, but choppy.  MBS up 2 ticks (.06) and 10yr down 1.5bps at 4.246

12:18 PM Choppy still, and some more improvement.  MBS up 3 ticks (.09) and 10yr down 2.1bps at 4.24

02:22 PM MBS still up 3 ticks (.09).  10yr now down 3.7bps at 4.223

04:06 PM More strength at the 4pm NYSE close. Bonds at best levels with MBS up 5 ticks (.16) and 10yr down 4.9bps at 4.213

After more than a week of consistent and meaningful improvement, mortgage rates finally showed us that they were at least capable of moving in the other direction yesterday. Thankfully, that demonstration was short-lived.   The average lender got back to the recently typical business of offering the lowest conventional 30yr fixed rates in several months. As of today, you’d have to go back to December 9th to see anything lower, but if rates improve just a tiny bit more, you’d have to keep feeding quarters into the time machine until reaching October 18th. At that point, it would take quite bit more doing to extend the “best in x months” time frame, but no one’s complaining. The average lender is easily back into the upper middle 6% range with many of the more aggressive lenders actually in the mid 6% range for top tier scenarios. This is a surprising turn of events given the interest rate fears being parroted by many pundits as the market considered the potential impact of tariff implementation.  To be fair, fiscal policies will take much more time to make their impacts known on the economy and interest rates.  For now, the gains are courtesy of softer economic data, as-expected PCE inflation (announced just today), and investor concern over the economic impact from fiscal policy.  [thirtyyearmortgagerates]