The $300 million strong team brings with it two top producers in the state.

Howard Lutnick’s influence in housing today is primarily tied to tariffs but his firm also had a storied past in mortgages and was hit hard by the 9/11 attacks.

While Sen. Elizabeth Warren, D-Mass., is continuing to try and save the agency she helped create, Sen. Adam Schiff, D-Calif., who benefited from crypto spending in his primary race, is a new ally.

Shares of all 18 members in the S&P Composite 1500 Homebuilding Index fell, sending the gauge to the lowest intraday level since December 2023, after results from luxury homebuilder Toll Brothers Inc. and key construction data Wednesday indicated the residential real estate market may be in store for more turbulence.

Reality TV contributed to heightened demand for fixer-uppers and DIY projects, but today’s economics are altering consumers’ home buying considerations.

It was almost a mildly interesting day as rates started out slightly higher.  To be fair, even that would not have been too interesting because the move was so small that most rate quotes would have been unaffected.  Still, just to be sure to avoid any and all excitement, rates received a minor, friendly bump back to yesterday’s levels in the afternoon.  The improvement followed the bond market’s favorable reaction to the release of the minutes from the most recent Fed meeting.   Mortgage lenders tend to avoid making mid-day changes to rates unless the underlying bond market moves by a certain amount. Because today’s intraday bond market movement was on the small side, only a handful of lenders changed their rates, but it was enough for the average 30yr fixed rate to drop 0.01%–the smallest increment we measure.

Deep Dive on Today’s Misunderstood Fed Comments

Today’s only potential big ticket event was the release of the minutes from the Fed’s most recent meeting (3 weeks ago). These weren’t very likely to cause a stir, but an odd inclusion caught the market’s attention. In not so many words, it had to do with the potential for the Fed to pause its balance sheet run-off (something that would technically create net buying demand in bonds) in order to maintain enough of a balance sheet cushion to accommodate volatility associated with Treasury’s account balance in the run up to the next debt ceiling showdown. While nothing has been decided yet, and while it would only be temporary, some traders viewed it as a short term opportunity and acted accordingly (by buying a few more bonds today). 

Econ Data / Events

NY Fed Manufacturing 

5.7 vs -1.0 f’cast, -12.6 prev

NAHB Housing Market Index

42 vs 47 f’cast, 47 prev

Market Movement Recap

11:17 AM Weaker overnight but bouncing back into positive territory in early trading.  MBS up 2 ticks (.06) and 10yr down 0.1bps at 4.542

03:39 PM Zero reaction to Fed minutes at first, but then some buying owing to the notion of pausing balance sheet run-off pending further clarity on the debt ceiling. MBS up 6 ticks (.19) and 10yr down 2.2bps at 4.53

Bonds extended yesterday’s selling streak in the overnight session, but not in an alarming or serious way. Momentum reversed at 9am without any clear catalyst apart from the technical ceiling at 4.57% in 10yr yields.  Yields have dropped a few bps since then to return to just-barely-stronger levels. The day’s only notable calendar event is the release of FOMC Minutes at 2pm.  Not to be confused with an actual Fed day, the minutes are simply a more detailed account of the Fed day 3 weeks ago. They can occasionally offer market-moving revelations, but it’s hard to imagine what they could convey in the present environment that hasn’t already been widely discussed by Powell and other speakers over the past 3 weeks.

So, you drive across town to a gym to walk on a treadmill? There are always interesting and strange things going on out there. Huh? The Florida’s governor wants to eliminate property tax? Yes, the state currently runs a budget surplus, but with no income tax, and no property tax… Huh? KFC is leaving Kentucky for Texas?! Yup. Huh? HUD is cutting 50 percent of its workforce? Join the crowd. Huh? Totally freezing the CFPB in place would mean that all of Cordray’s and Chopra’s work will be frozen in place, right? Even my cat Myrtle would have known that and warned against a total freeze. Of course we have the report/letter that the CFPB sent to all of the states about being more aggressive in enforcing consumer financial protection laws. Most lenders adhered to rules and regulations before the CFPB came along. Most. Huh? Homeowner’s insurance in some areas is more expensive than principal and interest? Yup. “Rob, have you heard that lenders are actually watching the ratings of insurance companies, and may go to borrowers saying ratings have dropped, and requesting the borrower obtain new insurance or else…” Yes, I have. (Today’s podcast can be found here and this week’s is sponsored by nCino. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Hear Part two of an interview with Rocket’s Bill Emerson, with questions provided by the Institutional Risk Analyst’s Chris Whalen, on the lending landscape in the digital age of mortgage.)

The new tool taps into Intercontinental Exchange’s AllRegs database, which contains over a million pages of guidelines from various sources.