The Canadian bank fell short of analysts’ expectations on non-interest income partly because of a higher-than-anticipated tax rate. Scotiabank’s results also included a one-time impairment charge related to its investment in Bank of Xi’an Co. in China.

Tis the season to have some fun, right? How about we start with this interesting musical duo? While the CFPB’s proposal addressing the selling of data has garnered some attention, with the Winter Solstice less than three weeks away and it isn’t exactly the season when home buying picks up. Nor are interest rates or insurance costs cooperating. But those two aren’t the only obstacle. Clever found that the true cost of buying a home includes an additional $31,975 in home-buying expenses for buyers on top of their down payment. And that figure doesn’t include the average of $12,944 in commission buyers may pay their agents if the seller doesn’t. On average, home buyers spend the following amounts on repairs and renovations ($13,498), furniture, fixtures, and appliances ($6,446), closing costs ($4,754), concessions to the seller ($3,943), moving costs ($2,670), and private mortgage insurance ($387 annually). (Today’s podcast can be found here and Richey May is sponsoring this week’s. Richey May’s consulting, cybersecurity, business intelligence, and automation services are designed by mortgage experts to help you continue to drive growth and increase profitability. Hear an interview with Union Home Mortgage and WithLove Charity’s Tay Schiebe about #GivingTuesday and the ways you and your organization can make a difference both in and beyond your community.) Lender and Broker Software, Services, and Products Join ICE for the Mortgage Monitor webinar where you’ll gain critical insights into U.S. housing and mortgage market trends. The information presented in this preeminent, widely attended monthly webinar is based on the most current data available from ICE’s vast mortgage, housing and property data assets, including the largest servicer-contributed loan-level database in the industry. Learn how borrower demand, housing affordability, interest rates, available equity, and other factors may impact your lending strategies. Register for the next webinar which will be hosted this Thursday, December 5, from 2 – 3 p.m. ET.

The bond market is the primary driver of mortgage rate movement and normally, “weakness” equates to higher rates.  Bonds are slightly weaker today compared to yesterday afternoon, but mortgage rates nonetheless managed to move lower.  What gives? Timing is partly to blame.  Bonds may be weaker than yesterday afternoon, but they’re still stronger than yesterday morning, when most lenders publish their rates for the day.  After that initial rate offering, it takes a fair amount of bond market volatility before the average mortgage lender will make changes to mortgage rates.  Several lenders offered improvements yesterday afternoon in response to bond market improvements.  In those cases, their rates were fairly similar today.  Ironically, just as yesterday’s volatility resulted in improvements for rates, today’s volatility is doing the opposite with several lenders “repricing” to slightly higher levels. The net effect is an average rate that is just a hair below yesterday’s, and also the lowest in just over a month. 

Friendly Fed Comments No Match For The Range

The day began with a bond rally courtesy of geopolitical headlines (martial law declared in South Korea). Traders were done reacting to the news by 9am and yields were heading back up after that with a 10am push from stronger JOLTS data. There were several friendly comments from Fed speakers in the early afternoon, but they only materially benefitted the short end of the yield curve (i.e. 2yr yields are lower on the day while 10yr yields are several bps higher). The other way to view the move is simply that the bond market rallied as much as it was willing to rally by the end of last week and yields haven’t been able to make any additional progress since then. Indeed, each of the past 3 trading sessions has seen a 10yr yield low of almost exactly 4.17%.  Tomorrow brings an important slate of econ data with ADP employment, ISM Services, and an afternoon Powell speech. 

Econ Data / Events

Job Openings

7.744m vs 7.480m f’cast, 7.372 prev

Job Quits

3.326m vs 3.071m prev

Market Movement Recap

09:36 AM Slightly weaker overnight, then stronger on geopolitical headlines.  MBS up 2 ticks (.06) and 10yr down 1.7bps at 4.177

10:55 AM At the lows of the day with MBS now unchanged and 10yr up 1.2bps at 4.206

02:48 PM Modest recover into 1pm hour, but back near same lows now.  MBS down 3 ticks (.09) and 10yr up 1.9bps at 4.213

Of all of the motivations in all the markets, this one had to walk into ours.  Or perhaps it rolled in on tank tracks.  Just over an hour ago, South Korea’s president declared martial law.  If you don’t follow Korean politics, yes, this is a head scratcher.  Upon verifying the authenticity of the headlines, rather than scratch their heads, investors simply bought bonds in a classic, modest safe haven rally.  This has been the dominant theme so far this morning, turning modest overnight losses to modest early morning gains.  The forthcoming JOLTS data could change or accelerate the move.

A longer term chart emphasizes the small scale nature of today’s move.  The big gains happened as the beginning of last week and little has changed since then.

Redfin data supports findings from this summer when a significant share of buyers said they would move on purchases only after the election.

Federal Reserve Gov. Christopher Waller said the central bank’s last framework review was too focused on the post-global financial crisis period and difficult to explain.

Listing the changes already made to its business model in his first 90 days, CEO Ryan Marshall said Voxtur could be EBITDA positive if trends hold in 2025.

Real estate investment trust United Development Funding IV is facing a Dec. 10 showdown with NexPoint and the $181 million deal could be a lifeline for management.

Federal Reserve Gov. Christopher Waller, a Trump appointee, said that while recent inflation readings are concerning, monetary policy would remain restrictive even if the central bank cuts interest rates by another quarter-point this month.