| Last | Change | Percent | |
| S&P Futures | 2036.0 | 6.0 | 0.30% |
| Eurostoxx Index | 3357.5 | -15.1 | -0.45% |
| Oil (WTI) | 45.15 | -1.1 | -2.34% |
| LIBOR | 0.256 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 94.19 | 0.171 | 0.18% |
| 10 Year Govt Bond Yield | 1.80% | -0.02% | |
| Current Coupon Ginnie Mae TBA | 103.1 | 0.0 | |
| Current Coupon Fannie Mae TBA | 102.8 | 0.1 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.85 |
Markets are higher after yesterday's sharp sell-off. Bonds and MBS are flat.
Mortgage Applications fell 3.2% last week as purchases fell .1% and refis fell 5.1%.
There is anecdotal evidence (Redfin and also D.R. Horton) of buyer demand for homes, which bodes well for business this year. The wrinkle is that buyers are highly price sensitive and are not chasing homes, even though rates are lower. Existing home inventory is at 4.4 months, which is well below the mid 5s we have been seeing for years and the mid 6s, which indicates a balanced market.
Mel Watt testified before the House Financial Services Committee yesterday. Here are the prepared remarks. He more or less defended an activist government role in the housing market. On the subject of principal mods for Fannie and Freddie loans, he told the left that the check is in the mail, saying that they are still looking at the best way to serve both homeowners and the government. As the FHFA home price index is within 5% of peak levels already, this problem is melting away over time.
We will have the FOMC decision today around 2:00 pm. Nothing major is expected, as there is no press conference. I suspect any action will be in the minutes, not the statement.
Is the non-QM securitization market finally coming back? Maybe. As if now, non-QM loans are portfolio'd. However some hedge funds are thinking of selling MBS backed by these loans. Of course the big question will be how much overcollateralization the Street will require. High quality jumbos have been having something like a 50% equity tranche. That said, financial repression leads to investors reaching for yield, so this may work.
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