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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