Stocks are lower as the tech sell-off continues. Good numbers out of Meta and Tesla aren’t enough to pull markets up. Bonds and MBS are rallying.
Just like the bond selloff was global, so is they bond rally. Bunds and Gilts are seeing lower rates. Bucking the rally is the French OAT which now yields 5.1%. MBS seem to be taking this rally with a grain of salt. So far mortgage rates are reluctant to follow the 10 year lower. The recent rally in bonds has recaptured about 25 basis points of the roughly 50 basis point increase since the beginning of September.
Initial jobless claims fell to 194k. The labor market continues to be robust.
Homebuilder Pulte reported earnings this morning of $2.53 per share. Revenues fell 9% and gross margins contracted 140 basis points to 24.8%. New orders fell 6% in units. “The rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines,” added Mr. Marshall.“Within this environment, we continue to appropriately balance the price and pace of home sales, align production accordingly, and remain disciplined in our allocation of capital.”
Move-up and active adult now account for over 60% of deliveries, which are the more profitable sectors.
Northpointe announced that it is selling its distributed retail and consumer direct business to CMG Financial, with the transaction expected to close by the end of the year. “Given today’s economic and operating environment, and the continued evolution of the mortgage distribution channels, we are refocusing our strategic priorities where we have the strongest competitive advantages,” Williams continued. “This allows us to deepen client relationships, generate attractive portfolio assets, and grow relationship-based deposits, which we expect will improve operating leverage, capital efficiency and create a more robust, stable and scalable earnings profile…We believe CMG would be a strong home for our origination team and a constructive path for our customers, referral partners and team members,” Williams concluded. “We remain highly committed to the mortgage banking industry, and believe allocating capital and resources to our businesses with the strongest client relationships and balance sheet opportunities provide us the best path forward for long-term growth and shareholder returns.”
Single family rents rose 2% in August according to Cotality. This is the sixth consecutive month of of YOY increases. “August marks an important milestone for the rental market,” noted Molly Boesel, senior principal economist at Cotality. “Annual single-family rent growth returned to its long-run range, albeit at the lower end, for the first time since August 2025, and the number of markets experiencing rent declines fell to its lowest level since September 2023.”
The hip-to-be-square trade continues, with MSAs like Chicago, Philly and NY experiencing the biggest increases while Florida and Texas saw more modest growth.
