The post-pandemic increase in consumers falling behind on their credit card bills seems to be tapering off. “For 2025, we’re seeing a lot of stability in delinquencies,” an industry researcher said.

The Federal Housing Administration is giving mortgage companies it works with a break when it comes to certain early-payment defaults in official disaster areas.

There’s no easy way to say it: it was a bad week for mortgage rates.  Actually, it was a bad week for interest rates in general and mortgage rates typically follow the rest of the rate market.  After hitting the lowest levels in a month and a half last Friday, each of the next 5 days saw a modest to moderate increase in the average lender’s mortgage rates. But why? Rates are tied to the bond market. Movement in bonds dictates what mortgage lenders can offer.  Bonds can move for multiple reasons, but if we could only ever consider one input, it would be the broad category of “economic data.”  That’s what makes this week frustrating.  Economic data arguably didn’t suggest the type of damage we ended up seeing.  Unfortunately, once we move past economic data, rate motivations become much less obvious and much harder to discuss without esoteric bond market jargon. Suffice it to say that there are factors beyond the domestic economy that have traders shifting their bond holdings.  Some of those have to do with end-of-year requirements for financial statements.  Some are more focused on getting into position to react to next week’s Fed rate announcement on Wednesday.  At that point, we’ll either see some reprieve, or an acceleration of the recent momentum.

Why So Much Selling in Bonds?

Without a doubt, it’s been a frustrating and puzzling week for the bond market.  Everyone knows that bonds have moved consistently higher in yield, but there is very little understanding and agreement about WHY that move has taken place.  Europe had a rough week, but EU bonds didn’t lose as much ground as US bonds, so we can’t really stop there.  We also know that econ data wasn’t to blame (or if it was, traders bought bonds at first and then changed their minds later in the day–not typical behavior, to say the least).  Beyond those considerations, we’re left with guesses and possibilities that are much harder to substantiate and much more esoteric.  These include things like year-end positioning constraints, a move to the sidelines before the Fed announcement, and curve trading driven by one of several factors.  

Econ Data / Events

Import Prices

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Export Prices

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Market Movement Recap

09:07 AM Initially slightly stronger overnight, then weaker with Europe.  MBS down 2 ticks (.06) and 10yr up 1.5bps at 4.346

10:01 AM Additional weakness.  MBS down 7 ticks (.22) and 10yr up 3.2bps at 4.362

12:18 PM More of the same.  10yr yields are up 5.8bps at 4.388.  MBS down 10 ticks (.31).

03:10 PM Leveling off near weakest levels with MBS down 11 ticks (.34) and 10yr up 7bps at 4.40

Bonds can’t seem to catch a break this week.  Data hasn’t necessarily been unfriendly either with both CPI and PPI hitting forecasts at the core monthly level (not to mention higher-than-expected jobless claims). Despite that, rates have risen every day this week with the biggest sell-offs ironically on the days with the not-unfriendly data.  Friday is effectively data free with only import/export prices (a report that never has an impact) and bonds are selling off once again. 
We have to agree that there are non-data-related reasons for this week’s weakness, but from that point on, the assignment of blame becomes somewhat speculative.  Opinions range from “pre-Fed positioning” to “year-end balance sheet constraints.”  Those are hard to prove, and maybe we don’t need to have an ironclad scapegoat to simply observe this trend is not our friend until further notice. 
That much is obvious, but what’s next?  It’s always a coin flip, more or less, but if you’re looking for hope, here are a few options.  First, yields just filled an opening gap from Monday Nov 25th.  Some technicians think this is the kind of thing that precedes a friendly bounce.

One could also consider even longer term trends where yields have moved from the bottom to the top of a trend channel that has been intact for more than a year now.  Of course, trend channels aren’t permanent, but if we do happen to see rates show some resilience next week, these technical considerations would bolster the case for that rally to have a bit of staying power.

“They say that mafia members are nasty people. But while growing up, I lived next door to one mafia member, and he was actually a nice guy. In fact, every morning, he paid me $20 just to start his car.” Membership has its privileges. “Rob, I own a smallish independent mortgage bank (IMB). We mostly bank and have a servicing portfolio, but also do some brokering depending on the product and the pricing in the market (especially for MSRs). We currently don’t belong to any outside organizations. How are we supposed to make up our minds between the MBA, CHLA, our state organization, a regional organization, NAMB, AIME, Lenders One, or The Mortgage Collaborative, and probably some that I didn’t list?” That is a great question. I suggest that you contact each one and see where the best cultural and financial fit is. (Let me know if you need contacts.) Obviously, you can belong to more than one, but several memberships can become expensive in a hurry. Remember that advocacy is as important as it’s ever been! (Today’s podcast can be found here and this week’s podcasts are sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industry. Save 20 percent all week with the code “Chrisman.” Hear an interview with Treefort Technologies Jay Krushell and iProov’s Joe Palmer on the rising threat of home seller impersonation fraud, and how biometrics have become a preferred line of defense.) Lender and Broker Software, Services, and Products

Using homeowner data available on ICE’s servicing platform, the integration can prompt users to use a self-guided appraisal valuation tool.

Feds allegedly reneged on an agreement with the trade group at the onset of the Biden Administration.

For the fourth month in a row, overall mortgage delinquency rates have increased, with loans 30 days or more late up 0.2 percentage points in September.

The average surplus premium to protect property this year was roughly $46,000 in the wealthy enclave and the situation is only likely to worsen as climate change ups the odds of destructive wildfires.