WTMS Blog Today = What’s up in Mortgage Today (PM) – 08/25/2024

The mortgage-backed securities market is experiencing moderate volatility today as traders digest mixed economic signals and Federal Reserve commentary. UMBS pricing has shown resilience despite broader market uncertainties, with spreads tightening slightly against Treasury benchmarks. Bond traders are closely watching for any shifts in Fed policy expectations following recent economic data releases. The 10-year Treasury yield continues to hover near key technical levels, creating a cautious trading environment for mortgage originators. Current pricing reflects ongoing concerns about inflation persistence and labor market strength. Market participants are particularly focused on upcoming economic releases that could influence Fed decision-making. GNMA securities are trading in line with conventional mortgage bonds, showing steady demand from institutional investors.

The government-backed nature of these securities continues to provide stability in an otherwise choppy market environment. Secondary market liquidity remains adequate but dealers are reporting tighter bid-ask spreads. Mortgage origination volumes remain under pressure as higher rates continue to dampen refinance activity. Purchase money applications are showing more stability, though affordability concerns persist in many markets. Lenders are adjusting capacity and focusing on operational efficiency to navigate the challenging rate environment.

Real estate markets are displaying regional variations, with some areas showing surprising resilience while others face inventory challenges. Home price growth has moderated in most regions, though supply constraints continue to support values in desirable markets. Subscribe to get this essential mortgage market intelligence delivered to your inbox daily, completely free.