Average mortgage rates drifted slightly higher to end the week, though they remained under the levels seen on Monday and Tuesday. Even then, none of this week’s movement was especially abrupt. That’s interesting considering there was a decent amount of economic data throughout the week. It could be that the rate market is simply waiting for the heavier hitting events on the horizon. Next Tuesday’s Job Openings data is on the watch list. It will be the first major October employment data from the Bureau of Labor Statistics (the same agency that publishes the big jobs report) since the end of the government shutdown. That’s especially notable in this case because we won’t ever get a full jobs report for October, and the portion that remains won’t come out until the following week. Then on Wednesday, the The Fed will announce its rate decision. Markets are fairly convinced the Fed will cut rates, but the confidence isn’t as iron-clad as normal. Additional surprises could arrive with the Fed’s dot plot (updated rate forecasts from each Fed members) as well as Fed Chair Powell’s press conference.  As always, keep in mind that a Fed rate cut has no bearing on longer-term rates like mortgages. It’s actually been more common to see mortgage rates rise following Fed rate cuts.  

If there’s one resounding theme in the bond market this week, it’s that trading momentum marched to its own beat with almost zero regard for the available economic data. While this was a notable disconnect on Wednesday (little reaction to ADP/ISM), it’s fairly easy to reconcile on a day like today where the PCE data is super stale (delayed release from September) and the only other report, Consumer Sentiment, rarely has an impact. 

In general, the past 5 days have marked a casual return to the prevailing range (or more appropriately, the prevailing trend channel), thus setting the stage for a bigger break after the bigger events on the horizon (Fed day next week and jobs report the week after).

Of the 50 highest risk markets in the country, 16 reside in California, followed by New Jersey with nine, Attom found.

The drop in mortgage rates as measured by Freddie Mac, came about even as the 10-year Treasury yield used to price loans moved higher since Thanksgiving.

The Government Accountability Office has agreed to investigate Federal Housing Finance Agency Director Bill Pulte for allegations of misuse of power and violations of federal privacy laws

Delinquency trends split in Q3, with securitized and agency loans showing more strain while banks and life companies saw small improvements amid uneven vacancy and rent conditions.

Gallego introduced legislation to amend the EB-5 immigrant investor visa program in order to funnel more money into the construction and rehabilitation of homes.

Bond Momentum Continues Ignoring Data

On multiple recent occasions, we’ve seen bonds make a moderate move on days with important economic reports, but not in response to those economic reports. Thursday was the latest example. The 8:30am jobless claims data was undoubtedly a tradeable event based on the big volume spike at the time, but the higher yields were already in place by the time the data came out. Moreover, there wasn’t much of a response afterward. Bonds spent the rest of the day drifting sideways to slightly weaker, but still very much in the prevailing pre-Thanksgiving range (i.e. 10yr yields 4.05-4.17).

Econ Data / Events

Challenger layoffs (Nov)

71.321K vs — f’cast, 153.074K prev

Continued Claims (Nov)/22

1,939K vs 1960K f’cast, 1960K prev

Jobless Claims (Nov)/29

191K vs 220K f’cast, 216K prev

Market Movement Recap

08:53 AM moderately weaker overnight with additional temporary selling after jobless claims data. MBS down 3 ticks (.09) and 10yr up 3bps at 4.093

01:59 PM 10yr yields are up 4bps at 4.104. MBS down 5 ticks (.16). 

03:02 PM MBS are now down 6 ticks (.19) and 10yr up 4.7bps at 4.11

Treasury Secretary Scott Bessent said the Federal Reserve Board should reject the renomination of any regional Federal Reserve Bank presidents who have not lived in their districts for three years, signaling a potential confrontation when reappointments come before the board in February.

A North Carolina homeowner says the large servicer’s $6.75 fee for borrowers to make mortgage payments with a debit card violates a state debt collection law.