Saturday news flow is light, so this one is short. The bond market spent Friday holding most of the week's rally rather than adding to it. The 10-year Treasury closed Friday at 5.09%, 1 bp under Thursday's 5.10% close, and Mortgage News Daily described the session as traders consolidating gains, with tech-stock weakness still in the background and import prices up 1.1% for the month. Mortgage News Daily's own 30-year index rose to 7.37% Friday from 7.33% Thursday. Bankrate's 30-year reads 7.46% this morning, the same as Thursday and Friday, 11 bps under Monday's 7.57% high and 40 bps above the 7.06% it read a month ago. The VIX, a gauge of expected stock-market swings, closed Friday at 19.99, up from 16.46 the day before.
Yesterday's edition flagged Freddie Mac's weekly survey holding at 7.40% for the first time after seven straight weekly increases. Friday added the other side of that picture. The Mortgage Bankers Association's weekly survey for the week ending October 9 showed total applications down 2.7%, the purchase index down 4% for the week and 16% below a year ago, and refinance applications down 0.4% and 56% below a year ago, with the MBA's contract 30-year rate at 7.50%. Mortgage News Daily points out that most of this week's rate drop came after October 9, so that survey week caught none of it.
The connection worth making is between that lag and the housing data. NAR reported September existing-home sales at a 3.99 million annual rate, up 1.5% from August and down 2.2% from a year ago, with a median price of $417,500, up 1.3% from a year ago. Inventory rose to 1.60 million homes, up 4.6% from a year ago, which is 4.8 months of supply. More homes on the market and a 30-year 11 bps off its high is a better setup for buyers than the one the October 9 applications reflected, and the next two weekly MBA surveys are where that shows up or does not.
For pipelines, the level still matters more than the direction. On a $400K loan, 7.46% is about $2,786 a month in principal and interest, $30 under the $2,816 at Monday's 7.57% and $109 above the $2,677 at 7.06% a month ago. Next week's calendar: September housing starts and permits are due by October 20, Freddie Mac's survey and weekly jobless claims on October 22, new home sales in the October 23 to 26 window, core PCE in the October 23 to 30 window, and the FOMC meets October 27 to 28, a meeting without a new dot plot. A 10-year that holds near 5.09% into those prints gives the daily surveys room to drift lower; a reversal takes back this week's gain.
On the capital-markets side, National Mortgage News reports that a Figure Technology Solutions unit postponed a $346 million residential mortgage-backed security as investors asked for more yield, HousingWire reports First Horizon sold a $4.5 billion mortgage portfolio at a discount to focus production on its relationship clients, and National Mortgage News reports a home equity securitization became the first to go through S&P Global's preliminary rating process with VantageScore 4.0 used to underwrite all of its loans. Separately, National Mortgage News reports a dv01 study showing the gap between positive and negative outcomes on distressed non-QM loans narrowed from a year earlier, though positive outcomes still lead.
pull every active purchase file that priced during the October 12 week and re-run it at today's 7.46% so you have the payment difference ready for Monday's calls.