With zero change versus Thursday’s latest levels, the 30yr fixed mortgage rate index maintained a 0.03% range for the entire week (and 0.04% going back to last Tuesday). At 6.32%, today’s mark is close enough to Friday’s 6.29% to say rates are hovering at the lowest levels in more than a month. The sideways drift reflects uncertainty surrounding the next phase in the Iran war. Prospects for negotiations were called into question for most of the week, but improved somewhat on Friday. A successful end to the war would likely bring some additional improvement for rates, but the true test would be the longer-term realities for oil prices and their impact on inflation. The week ahead brings the next Fed announcement. Markets are pricing in a zero percent chance of a cut or a hike. The Fed’s rate cutting hands are tied until/unless inflation moves back down and they won’t preemptively assume that will happen until post-war oil price dynamics play out for a few months.

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Mortgage applications surged last week, posting a strong rebound as declining rates and improving market sentiment drove broad-based gains. The Mortgage Bankers Association (MBA) reported a 7.9% increase on a seasonally adjusted basis for the week ending April 17. Both refinance and purchase activity contributed to the increase, with the Refinance Index rising 6% from the previous week and standing 52% higher than one year ago. Purchase applications showed even stronger momentum, climbing 10% week over week and up 14% on an annual basis — a notable shift after recent softness. The improvement comes as mortgage rates moved lower, with the average 30-year fixed rate declining to 6.35% . The drop was driven in part by easing geopolitical tensions and lower oil prices, which helped stabilize financial markets and restore some borrower confidence. MBA’s Mike Fratantoni said, ” Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices… purchase application volume increased an even stronger 10 percent and was up 14 percent compared to last year’s pace. Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country… ” Application composition shifted slightly away from refinancing, with refinance share decreasing to 44.2% from 45.5% the prior week. ARM share also declined to 8.0% . FHA share held steady at 18.2% , while VA share decreased to 15.0% and USDA share remained unchanged at 0.5% .

Foreclosure auctions available jumped on both a quarterly and yearly basis, but the sales rate did not move in tandem, according to a new report.

The Mortgage Bankers Association is recommending the option for Fannie Mae and Freddie Mac borrowers with strong credit with a tri-merge for others. Here’s why.

The 30-year fixed is still over 20 basis points higher than its February bottom, but fell 7 basis points this past week on Iran peace hopes, Freddie Mac said.

More than a third of sellers have mortgage rates below 5%, yet still plan to list their homes this spring, according to a survey from Coldwell Banker.

An uptick in problem loans within the heavily scrutinized office sector pushed down share prices at Rhode Island-based Washington Trust and Bank OZK in Little Rock, Arkansas, even though both banks reported solid profits.

Thursday saw a continuation of the recent trend of very low volatility for mortgage rates. The average lender’s top-tier 30yr fixed rates were perfectly unchanged from yesterday and in the same narrow range as the past 7 business days (6.29-6.33%).  Despite the uneventful outcome, there was some underlying market volatility mid-day following a series of war-related headlines. The news involved the status of Iran’s negotiation team as well as potential indications of air strikes in Iran. The market reacted swiftly (a resumption of hostilities would push rates/oil higher and stocks lower), but several of the headlines were subsequently retracted/clarified and the overall market reaction ended up being relatively small. A handful of mortgage lenders responded to the market movement and increased rates. Bonds (which dictate rates) remain a bit worse off compared to this morning, so if there’s not a bond market rebound by tomorrow morning, other lenders could make similar adjustments.

Volatility Picked Up Despite Lackluster News Quality

It’s not exactly a new problem, but the issue of incorrect or misconstrued headlines is growing larger as the Iran war persists. It makes sense considering the current lull in both military and diplomatic developments. People who write and profit from breaking newswires are eager to cash in on clicks and dollars. Around 1pm ET today, several newswires created obvious volatility for bonds/oil/stocks. These involved an apparent resignation of a key Iranian official from the negotiations team and the implication that Tehran’s activated air defenses meant a breach of the ceasefire. Both were refuted. Markets corrected slightly, but a certain amount of damage was done (also, markets may not believe the refutations). The net impact on bonds remained small with 10s only up a few bps and MBS down just over an eighth of a point.

Econ Data / Events

Continued Claims (Apr)/11

1,821K vs 1820K f’cast, 1818K prev

Jobless Claims (Apr)/18

214K vs 212K f’cast, 207K prev

Market Movement Recap

08:34 AM A hair stronger after being flat overnight. MBS up 2 ticks (.06) and 10yr yields are up nearly 1bp at 4.295

11:54 AM MBS up 2 ticks (.06) and 10yr down half a bp at 4.298

01:43 PM Weakest levels. MBS down nearly a quarter point and 10yr up 4.5bps at 4.349

02:31 PM Bouncing back a bit as previous headlines have been mostly retracted. MBS still down an eighth and 10yr up 1bp at 4.313