Limbo Rock! US Treasury 10Y Yield Falls 12.6 Basis Points To 0.926% As Dow Drops 800 Points

The Washington Post had a howler of a story yesterday: “U.S. markets post big gains as Joe Biden’s Super Tuesday surge offers coronavirus respite”

It that was true, it was a very short-term effect given that the Dow dropped 800 points this morning.

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Or was it something else … like the IMF throwing $50 billion at the Coronavirus. And more stimulus from Central Banks like The Federal Reserve? But those effects were short-lived too.

The US 10Y Treasury yield fell another 12.6 basis points this AM to 0.926%. The lowest in history.

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And Freddie Mac’s 30Y mortgage survey rate (green line) continues to follow the 10Y Treasury rate down the rabbit hole.

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How long will rates go?

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I want to thank Rick Sharga for remembering that I was one of the few that predicted what is happening today with interest and mortgage rates while most others predicted mortgage rates would rise above 8%.

Mortgage Lenders Hire Like Mad to Meet Demand as Rates Slide (Mortgage Applications Boom with Coronavirus)

Mortgage interest rates and US Treasury yields keep on going down. This is resulting in a wave of jobs for mortgage lenders and underwriters.

(Bloomberg) – By Shahien Nasiripour and Prashant Gopal – A drop in interest rates in response to the coronavirus outbreak is adding urgency to a hiring spree across the mortgage industry.

Executives at four of the nation’s 15 biggest mortgage lenders, already gearing up for a busy 2020, anticipate hiring thousands of employees this year to keep up with what they expect to be a flood of demand for purchase loans and refinancings.

Lenders are zipping through applications so fast that some expect to blow past origination records they set just last year. At Quicken Loans Inc., the nation’s largest mortgage lender, Monday was the busiest day for mortgage applications in the company’s 35-year history, said Chief Executive Officer Jay Farner.Michigan-based United Wholesale Mortgage, meanwhile, approved $2.5 billion of preliminary loans, a single-day record for the company, according to Alex Elezaj, its chief strategy officer.

The drop in rates, coming as Treasury yields plunge, is taxing an industry that was operating near capacity and setting off a battle for talent. Eric Mitchell, an executive at Michigan-based Gold Star Mortgage Financial, is luring underwriters with signing bonuses and the chance to make big money. That assumes they’re willing to work long hours while the market stays hot.

“If you’re not making a $1 million this year as a loan officer, you’re grossly incompetent,” Mitchell said. “‘I tell them, ‘We’re not working 40 hours a week, kiss your families goodbye.’”

Fears that the virus outbreak will stall growth have hammered stocks and raised fears of a recession. The Federal Reserve on Tuesday slashed its benchmark rate by half a percentage point in its first emergency move since 2008. And with the Treasury yields that guide mortgage rates sliding, loan officers juggling a mountain of refinancing applications, which soared last week to the highest level since May 2013.

Quicken expects to hire a few hundred new employees a month this year. United Wholesale Mortgage, a division of United Shore Financial Services Inc. and the nation’s third-largest home lender, plans to hire another 2,000 people in 2020 after it doubled in size last year to roughly 5,400 employees, Elezaj said.

Today’s MBA report on mortgage purchase applications and refinancing applications show a burst in application activity.

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Refi applications in particular are soaring as Treasury yields collapse.

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The spread between mortgage rates and Treasury yields is now at the highest level since the financial crisis.

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Only in America would a virus epidemic scare The Federal Reserve into lowering rates … that benefits mortgage borrowers and lenders.

charley