DAILY MARKET BRIEFING:
Mortgage Trends & Rate Activity
MARKET RATE INDICES
Daily Market Briefing: Mortgage Trends & Rate Activity
Market Index Current Rate 1-Day Delta 7-Day DeltaDelta Since
2/18/20
30-YR Conforming 2.96%
30-YR Jumbo 3.24%
30-YR FHA 3.01%
30-YR VA 2.66%
Source: Optimal Blue Mortgage Market Indices (OBMMI) – optimalblue.com/obmmi2
2.6%
2.8%
3.0%
3.2%
3.4%
3.6%
3.8%
4.0%
4.2%
Rates drifted 1-5 bps lower
yesterday. FHA and VA led the
pack with 4 and 5 bp drops,
respectively. The conforming
30-year fixed hit another record
low with a 2-basis point
decrease to reach 2.96% for the
first time ever!
30-YR CONFORMING TO 10-YR TREASURY RATE SPREAD
Market Index Current Value 1-Day Delta 7-Day DeltaDelta Since
2/18/20
10-YR Treasury 0.59%
30-YR Conforming 2.96%
10-YR to 30-YR Spread 2.37%
Source: Optimal Blue Mortgage Market Indices (OBMMI) – optimalblue.com/obmmiU.S. Department of the Treasury – treasury.gov
3
Daily Market Briefing: Mortgage Trends & Rate Activity
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
The 30-year conforming to
10-year treasury spread
dropped 1 basis point
yesterday.
2.9%
3.1%
3.3%
3.5%
3.7%
3.9%
4.1%
0
50
100
150
200
250
300
350
400
450
500
RATE LOCK VOLUME BY LOAN PURPOSE
Source: Optimal Blue Mortgage Market Indices (OBMMI) – optimalblue.com/obmmiOptimal Blue Market Analytics – optimalblue.com/market-analytics
Market Volume Index Current Value 1-Day % Change 7-Day % Change% Change Since
2/18/20
Purchase 124
Cash-out Refinance 43
Rate-Term Refinance 150
Total 316
Refinance Share* 60.9%
4
(Total Volume indexed to 100 on 1/2/2020)
OBMMI 30-YR Conf.
Daily Market Briefing: Mortgage Trends & Rate Activity
*Refinance Share changes reflect inter-period delta
Lock volume was up again
yesterday with a 9% increase, led
by 15-20% increase in refi
volume. Purchase volume was
flat.
MIX OF BUSINESS BY LOAN PRODUCT
Source: Optimal Blue Market Analytics – optimalblue.com/market-analytics5
Loan Product Mix Current Value 1-Day Delta 7-Day DeltaDelta Since
2/18/20
Conforming 72.6%
Non-Conforming 5.7%
FHA 9.4%
VA 11.3%
USDA 1.0%
Daily Market Briefing: Mortgage Trends & Rate Activity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Product mix did not materially
change yesterday.
PURCHASE & REFINANCE PULL-THROUGH RATES
Daily Market Briefing: Mortgage Trends & Rate Activity
Pull-through Rate Current Rate 1-Day Delta 7-Day DeltaDelta Since
2/18/20
Purchase Pull-through 81.4%
Refi Pull-through 73.2%
Source: Optimal Blue Hedge Analytics – optimalblue.com/hedge-analytics6
60%
65%
70%
75%
80%
85%
90%
(5-Day Moving Average)
Purchase and refi pull-through
increased 67 and 162 bps
yesterday, respectively.
Purchase pull-through
continues to hover around 80%
and refi pull-through is making
a push back to 75%.
BEST EFFORTS TO MANDATORY DELIVERY SPREADS
Daily Market Briefing: Mortgage Trends & Rate Activity
Best Efforts vs. Mandatory Current Spread 1-Day Delta 7-Day DeltaDelta Since
2/18/20
30-YR Conforming 52 bps
15-YR Conforming 44 bps
30-YR Government 42 bps
7
bps
20 bps
40 bps
60 bps
80 bps
100 bps
120 bps
140 bps
160 bps
180 bps
(5-Day Moving Average)
Source: Optimal Blue Hedge Analytics – optimalblue.com/hedge-analytics
Best efforts to mandatory spreads
were quiet yesterday for conforming
products but dropped 7 bps on
government loans. These spreads are
almost back to "normal," a signal
that we are maintaining a steady
recovery in secondary market prices.
Combined with higher volume and
margins, these spreads contribute to
a major improvement in gains for
most lenders.
WHOLE LOAN DELIVERY TO 30-YR TBA SPREADS
Daily Market Briefing: Mortgage Trends & Rate Activity
8
(700 bps)
(600 bps)
(500 bps)
(400 bps)
(300 bps)
(200 bps)
(100 bps)
bps
100 bps
Source: Optimal Blue Hedge Analytics – optimalblue.com/hedge-analytics
(All Spreads indexed to 0 on 2/3/2020)
Whole Loan vs. 30-YR TBA Current Spread 1-Day Delta 7-Day Delta 4-Week Delta
Best Ex vs. UMBS 3.0 (227 bps)
Best Ex vs. GNMA 3.0 (226 bps)
Cash Window vs. UMBS 3.0 (119 bps)
Best Ex prices gained 5 bps versus
UMBS 3.0 and 13 bps versus GNMA
3.0 Friday. Cash window spreads
versus the UMBS 3.0 gained 17 bps.
We continue to see gradual
improvement in spreads. This
dynamic is significantly enhancing
gains over already elevated margins
and BE/Mand spreads, which are
combining to generate record
earnings for most lenders.
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Daily Market Briefing: Mortgage Trends & Rate Activity
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