While the House passed President Trump’s budget resolution, the industry is abuzz about the TV at HUD’s headquarters showing an AI video of Donald Trump… There are some shifty IT folks out there. Meanwhile, focusing on reality, borrower psychology is a topic here at the Northeast Mortgage Summit, and who knows more about it, you or the CFO of Home Depot? Renovation and HELOC specialists took note that Home Depot’s chief financial officer said people are “moving on” from today’s high mortgage rates and have started investing more in their homes. HD reported strong fourth-quarter results, although CEO Ted Decker said consumers are still reluctant to make larger remodeling investments. There are plenty in our biz who tell me that people may start to view today’s mortgage rates as normal, especially when compared to historic rates. (By the way, speaking of Home Depot, Indiana’s Carol K. sent over a website that shows where corporations donate their money; you can see where Home Depot’s has gone lately.) (Today’s podcast can be found here and this week’s is sponsored by Sagent. Sagent brings the modern experience customers now expect from loan originations to loan servicing, where lifetime customer relationships are managed and grown. Hear an interview with Curinos’ Ken Flaherty on home equity lending, from origination data to borrower sentiment.) Lender and Broker Products and Services What’s an “energy-integrated” mortgage? Meet Ben Miller, Matt Hansen, and Cole Bestgen at the Wynn to find out. Ben and Matt reshaped the mortgage landscape when they founded SimpleNexus. Now they’ve hooked up with Arcasa CEO Cole Bestgen to help lenders close more loans by integrating solar into the mortgage process in a way that ACTUALLY makes sense. From interest-rate buydowns to generous tax credits to unlocking down payment assistance programs, Arcasa turns solar into your secret weapon for structuring creative deals that are efficient to originate and investor-friendly. See how this approach benefits both homebuyers and loan officers by meeting with Arcasa at the Wynn Las Vegas March 10-12. Spots are limited. Reserve your meeting now.

While the economic calendar may look a little busy today, there are, once again, no big ticket market movers in play.  The last time data had an impact was last week.  Since then, the notion of general concern over the economic outlook has helped bonds. Looked at another way, bond gains have frequently coincided with stock losses. As such, we might be concerned when/if stocks bounce higher. But on each of the past two sessions, such bounces have failed to sow fear among bond traders, and the same pattern is repeating this morning.

Mortgage rates are directly connected to the bond market, and bonds can seemingly do no wrong over the past week.  Specifically, demand for bonds has been strong and steady.  Higher demand begets higher prices and, when it comes to bonds, higher prices result in lower rates. On several occasions since last Friday, we’ve seen obvious examples of investors moving money out of stocks and into bonds.  The risk there is that bonds/rates would bounce back in the other direction if stocks manage to do the same.  But so far, the moderate attempts at recovery in the stock market have  not spilled over into the bond market.  In other words, rates have held their gains very well, even at times when it seemed like stocks might be trying to stage a recovery. Today didn’t see nearly as much movement as several of the past few days, but rates managed to start out right in line with yesterday’s levels.  By the early afternoon, bonds had improved enough for the average lender to offer a modest mid-day improvement. The result is the lowest average 30yr fixed rate since December 10th. [thirtyyearmortgagerates]

In a forum Tuesday, Senate Democrats railed against President Trump and Elon Musk’s efforts to shutter the Consumer Financial Protection Bureau as anti-consumer and illegal.

Recent housing trends more favorable to buyers will ease some of the pressure for higher down payments in order to secure a winning bid, Redfin finds.

The Justice Department said in a legal brief that the Consumer Financial Protection Bureau will continue to exist, but said instead that the agency will have fewer employees and a reduced budget under the Trump administration.

Texas Capital is arguing against summary judgment, saying prior assertions about reverse mortgages’ initial and subsequent draws need to be examined in court.

“Red flags are emerging for the US economy,” said Elias Haddad, senior market strategist at Brown Brothers Harriman. “Another month or two of poor US economic data would deliver a blow to the US exceptionalism narrative.”

Impressively Calm Rally Continues Amid General Growth Concerns

In the absence of the typical motivations required for the present pace of bond market gains, we’re left to ponder vague generalities such as the famous “global growth concerns” that were such a fixture in 2015 and 2019.  Some traders are citing such things as a reason to fade stocks and buy bonds at the moment, but those motivations will only last as long as the data allows.  In other words, we’re seeing a bit of a lead-off ahead of the next round of big-ticket data, but if that data is surprisingly strong, rates could easily snap back. Conversely, if the data confirms the wisdom of the lead-off, there’s more room to improve despite seemingly overbought technicals. 

Econ Data / Events

Consumer Confidence

98.3 vs 102.5 f’cast, 104.1 prev
Biggest 1 month drop since August 2021

Market Movement Recap

10:53 AM Sharply stronger overnight and continuing to rally.  MBS up 3/8ths and 10yr down 11bps at 4.297

12:03 PM Down an eighth from highs, but MBS still up 9 ticks (.28) on the day.  10yr still down 9.8bps at 4.309, but up from lows of 4.286

02:25 PM Bouncing back a bit in the PM hours.  MBS up almost 3/8ths and 10yr down 10.4bps at 4.303

They day begins with 10yr yields down more than 10bps and trading under 4.30% at times. MBS are up 3/8ths with 5.5 UMBS coupons getting close to par.  All of this transpired without any big-ticket data or scheduled events. In other words, despite a few mini-gluts of bond buying, the move has been relatively linear today.  One of the gluts coincided with the EU open, which is not uncommon in overnight trading.  Same story with the 8:20am CME open and the 9:30am NYSE open.

Some might also say that lower energy prices bode well for inflation. Others might say that the correction seen in crude oil is just another way the market is expressing concern over the pace of global growth.

There isn’t too much to glean from the timing apart from a simple reinforcement of the broad-based buying sentiment. So what’s driving the sentiment? The best guesses among traders and analysts involve a few usual suspects including but not limited to the potential economic impact of new fiscal austerity at home, the global economic impact from tariff/trade policy, the labor force implications (both due to tariff/trade policies, government lay-offs, and immigration policy), and lastly, corporate updates on hiring/firing/earnings.