Lumber retains protections for now, but construction stocks still fell, and while the initial market reaction lowered rates, there could later be a reversal.

While prices are still rising, an increase in reductions from listing suggests sellers are adjusting to the new reality for home buying this season.

The systematic miscalculations diverted thousands of dollars from people who fell behind on loans, said documents filed in federal court in Brooklyn.

The bank said it will appeal the judge’s ruling, which it suggested would have a chilling effect on lenders participating in such government programs.

Homebuyers would be able to take advantage of streamlined finance options, folding energy infrastructure costs with their mortgages, the companies said.

The Chinese curse, “May you live in interesting times” can easily be applied to the residential mortgage business in the last month or so. This week and yesterday was no exception, with some brokers benefitting from both Trump’s tariffs (fully expected to slow the economy, driving rates lower) and United Wholesale trying to keep its market share while Rocket Companies is spending about $11 billion to cement its place in real estate transactions and be in touch with a potential borrower from shopping for a home all the way to servicing it. (More below.) Meanwhile, just in time for the MBA’s Advocacy event next week in Washington, DC, House Republicans, led by Rep. French Hill, R-Ark., have sent letters to top US financial regulators urging them to reverse several Biden-era banking rules. Their priorities include rescinding the revamped Community Reinvestment Act (CRA), rolling back CFPB rules on overdraft fees and medical debt, and pausing Basel III reforms. The lawmakers said recent regulations have hurt innovation and access to financial services, especially for families and small businesses. (Today’s podcast can be found here and this week’s is sponsored by Calque. Calque provides a binding backup offer on your borrower’s departing residence to clear the existing mortgage balance and closing costs in 48 business hours or less. Today’s features an interview with Waymaker Mortgage’s Scottie Campbell and Revest Loans’ Jim Black on how buy-before-you-sell loan products are helping drive up origination volumes.)

Yesterday afternoon’s tariff announcement sent financial markets on a ride that ultimately resulted in sharply lower stock prices and moderately lower bond yields. Stocks don’t always correlate with bond yields, but that has been a common pattern since late February. The correlation between bond yields and mortgage rates, on the other hand, is perpetual and nearly flawless. After all, “yield” is just another word for “rate.”  Additionally, mortgage rates are based on mortgage-backed securities (MBS) which are basically bonds.  All that to say: rates have been benefitting from the market chaos that’s been hurting stocks, and stocks got hurt quite a bit over the past 24 hours.  Considering the average 30yr fixed rate was already close to its lowest levels since mid October yesterday, it’s no surprise to see an official breakout today. [thirtyyearmortgagerates] Tariffs and stock market volatility are not the only games in town for rates. Economic data is also very important and tomorrow’s jobs report is typically the most important economic report of any given month. Depending on the results, it could help rates move even lower or bounce back up into the recent range. 

Big, Early Rally, Then Flat All Day

On any given day in the bond market, Sometimes everything that’s going to happen ends up happening in the morning, thus leaving the rest of the day to drift almost perfectly sideways. Thursday was one of those days. Overseas markets dogpiled on Wednesday afternoon’s tariff reaction, sending stocks ripping lower and bond yields following. By the time US markets began active trading, most of the gains were in for bonds.  MBS, specifically, barely budged from 11:40am through the close.

Econ Data / Events

Jobless Claims

219k vs 225k f’cast, 225k prev

Continued Claims

1.903m vs 1.860m f’cast, 1.847m prev

ISM Services

50.8 vs 53.0 f’cast, 53.5 prev

ISM Employment

46.2 vs 53.9 prev

ISM Prices

60.9 vs 62.6 prev

Market Movement Recap

08:35 AM Stronger overnight as tariff rally extends.  MBS up a quarter point and 10yr down 8bps at 4.044

01:01 PM Sideways near highs.  MBS up 9 ticks (.28) and 01yr down 7.5bps at 4.048

04:17 PM Still sideways!  MBS up 10 ticks (.31) and 10yr down 8.3bps at 4.041

While plenty of uncertainty remains over the finer points of Wednesday afternoon’s tariff announcement, markets have heard enough to brace for impact on global trade. That “bracing” is being traded in the form of a flight to safety (sell stocks, buy bonds) that began yesterday and continued overnight. 10yr yields were already close to 4.0% before this morning’s weaker ISM Services data, and have been inching closer since then. 
That said, the additional “inching” isn’t really in response to ISM. Almost all of today’s trading looks like an afterthought compared to yesterday’s initial tariff reaction and the early overnight trading. 

The housing regulator has been mum on details about its reshuffling, but Secretary Scott Turner has emphasized mission-critical functions would persist.