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While 2023 was another financially healthy year for the private mortgage insurance industry, as the business written during and immediately after the pandemic ages, delinquencies are likely to pick up.The peak time frame for a borrower to fail to make a payment as scheduled is in the third through fifth years following origination. That period has already started for the 2020 vintage and will soon arrive for the 2021 production."On the fourth quarter conference call, management noted that while they are encouraged by the overall credit environment, they (along with industry peers) believe new notices will continue to tick up as the large vintage books from 2020-2022 season [age]," said Bose George, an analyst at Keefe, Bruyette & Woods, in his report on NMI Holdings.The industry's capital ratios — at least 25 states use some form of risk-based metric, while the secondary market requires active companies to meet the Primary Mortgage Insurer Eligibility Requirments standard — are stable at this point in the housing market cycle, Eric Hagen of BTIG wrote in his weekly mortgage industry overview on Feb. 12."We think the higher reported loss rates in [the fourth quarter] may be contributing to more limited visibility for earnings growth. Some investors had been anticipating a tapering-off of Covid-era reserve releases, but with somewhat uncertain timing until now. We're starting to turn to more story-specific catalysts for earnings and valuation upside," Hagen said.The six active companies logged $283.8 billion of new insurance written during 2023, down 30% from $405.1 billion in 2022 and less than half of the $600 billion produced in 2020, according to figures from KBW. The decline was in line with the change in overall volume of $1.64 trillion in 2023, versus $2.31 trillion for 2022, according to the Mortgage Bankers Association.Fourth quarter NIW of $59.2 billion was down 24% from the third quarter at $78.2 billion and 22% from $76 billion one year ago.

Commercial bank holdings of mortgage bonds are on the upswing. Photographer: Kyle Grillot/BloombergKyle Grillot/Bloomberg (Bloomberg) --U.S. banks are starting to ramp up purchases of everything from mortgage-backed securities to collateralized loan obligations after nearly two years of cutting back, adding fuel to a multi-month rally across credit markets.Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. have been boosting purchases of top-rated CLOs. Commercial bank holdings of mortgage bonds are also on the upswing, climbing 12 of the last 15 weeks, according to Federal Reserve data. It comes as Wall Street buyers added $41 billion of securities to their portfolios in the three months through December, according to data compiled by Citigroup, ending a streak that saw them shed more than $800 billion since March 2022, separate Fed data show.Amid an upturn in deposits, banks are searching for ways to put this new cash to work. The traditional option — boosting lending — is hard to do right now, though, after two years of interest-rate increases that curbed loan demand and pushed up defaults. That's left banks to park more money in high-quality securities that they believe will boost returns without heaping on too much credit risk.The renewed demand, while thus far modest, is already helping propel gains across credit, market watchers say. Spreads on new CLOs have tightened to the narrowest in more than a year-and-a-half in recent weeks, while MBS have rebounded from historically cheap levels. Further signs that banks are adding to their CLO and MBS holdings will only bode well for those markets, according to John Kerschner, head of US securitized products at Janus Henderson. "The credit rally has multiple drivers, but an important piece of it is bank demand and we're expecting only to see more of that," Kerschner said.U.S. bank deposits are on the rise again after tumbling in the wake of Silicon Valley Bank's failure last March. Bolstered by higher yields paid on savings accounts, deposits climbed almost $500 billion between April and the end of 2023, according to Fed bank report data compiled by Barclays Plc.The largest banks have historically stashed much of their holdings in high-quality debt such as Treasuries and agency MBS, preferring to take credit risk in their loan books and to stick to interest-rate risk in their bond holdings.In agency MBS, where banks have largely been missing in action for over a year, holdings have climbed by $74 billion since late October. Gross purchasing of Ginnie Mae mortgage bonds almost doubled in the latest quarter, according to Citigroup strategists. The reversal has coincided with dramatically tighter spreads. The yield gap on newly issued Fannie Mae current coupon MBS narrowed to 1.39 percentage point earlier this month, from as high as 1.89 percentage point four months ago, according to data compiled by Bloomberg.CLOs, which bundle leveraged loans into slices of varying risk and return, are also proving popular because their floating payouts help protect against the risk of rising interest rates eroding the market value of banks' portfolios, essentially what happened to SVB prior to its collapse.In addition, the highest rated slices of CLOs get relatively lenient treatment under new Basel III capital rules, which are poised to be finalized later this year. "Some banks are coming to the market now looking to add CLOs for the first time," said Ian Wolkoff, a managing director at Pretium Partners. "We think banks should have been buying CLOs earlier. The problems they faced last year might have been avoided with a higher allocation to floating rate assets."Banks have also plowed cash into Treasuries in recent months, adding $54 billion in the fourth quarter, according to a Citigroup analysis of bank holdings. 'CMO Machine'Appetite is also growing for a type of securitization known as collateralized mortgage obligations. Newly issued CMOs accounted for about 18% of overall agency MBS issuance in January, up from an average of 11% over the last three years, according to data from Robert W Baird & Co."Banks are the major driver of CMO demand," said Kirill Krylov, a strategist at Robert W Baird. "If they're asleep, then there's not much CMO production. If banks are active, the new issue CMO machine is working overtime."Some market watchers are quick to point out that the growth in bank deposits is still in its early days, and should the trend reverse, it's likely that securities purchases will too. If loan demand picks up, banks could also look to boost their lending books.Given the significant presence the largest US banks command in these markets, were just a handful to decide to turn off the spigot, demand for mortgage-backed securities would likely dissipate just as quickly as it emerged, creating idiosyncratic risk and performance, according to Bloomberg Intelligence senior MBS strategist Erica Adelberg.Still, their renewed purchases are already having an impact, says Tracy Chen, who leads global structured credit investing at Brandywine Global Investment Management."Banks are really big players, and the fact they're getting more involved means we can expect some tightening," Chen said.

The Department of Justice is criticizing a proposed settlement in a real estate broker commissions lawsuit, suggesting the agreement doesn't alleviate anti-competitiveness concerns. The feds' filing Thursday in a Massachusetts case against a Multiple Listing Service is a significant development, analysts with Keefe, Bruyette & Woods wrote this week. The objection alludes to further stronger actions by the government to uproot the longstanding broker compensation structure."We view the development as a negative headline for companies with buyer agent commission-driven models, including the residential brokers and legacy real estate portals," analysts wrote.The lawsuit between consumers, real estate brokerages and the MLS Property Information Network, a Northeast-based service, is one of several large legal challenges to commissions structures. A federal jury last October dealt a major blow to leading industry firms in handing a $1.78 billion judgment to home sellers challenging compensation rules. Attorneys with the DOJ Thursday took aim at numerous aspects of the Massachusetts settlement, which the MLS PIN and consumers have yet to seek preliminary approval for. The proposed agreement puts forth rule changes such as compensation as low as zero rather than $0.01; allowing negotiations over compensation; and requiring brokers to issue disclosures about the new rules. "It makes insignificant and largely cosmetic changes to the rule, while perpetuating the existing structure that drives supra-competitive commissions," federal attorneys wrote. The zero-dollar compensation rule doesn't solve the issue of buyer brokers "steering" clients to listings with higher commissions, the government argued. Attorneys also cited a broker's suggestion that seller agents would bury their notification requirements in fine print, and continue to push traditional sales scripts. Feds propose the MLS PIN settlement should rather prohibit buyer-broker compensation offers entirely, and give the burden of commissions to each side of the transaction. Buyer brokers could choose to offer flat fees or hourly rates in lieu of percentage commissions since their efforts have "a weak correlation, if any" to the final sales price of a home. "Most, if not all, buyers would likely prefer a fee structure that does not reward their broker for helping them to pay more for a home," attorneys for the DOJ added.The DOJ's 33-page filing also takes issue with the proposed $3 million settlement fund, which they note attorneys for plaintiffs have not committed to distribute any of those funds to class members. Counsel for the class, which also has yet to be certified, didn't respond to requests for comment Thursday while the MLS PIN declined to comment on pending litigation. The government intervened in the Massachusetts lawsuit because of a 2005 law allowing feds to voice concerns over pending class action settlements on behalf of citizens. It hasn't intervened in the billion-dollar Missouri-based judgment involving the National Association of Realtors, or other prominent commissions suits. Feds are also awaiting a U.S. Circuit Court's decision, expected by the end of March, regarding its move to reopen a probe against NAR. That could allow the DOJ to intervene in other prominent cases, KBW analysts said. Another major deadline will come in May with a settlement hearing regarding multimillion dollar consumer payouts from Anywhere Real Estate, RE/MAX and Keller Williams.The impact of possible commissions rule changes on mortgage lenders remains unknown, although industry experts have mulled a variety of outcomes. KBW, which has previously theorized the Federal Housing Finance Agency and others could implement a commissions workaround, put the onus on the embattled NAR organization. "Ultimately, we believe the primary agent of change lies with NAR as it is the one that maintains the rules that govern the prevailing commission structure," wrote analysts.

U.S. new-home construction sank at the start of the year by the most since the onset of the pandemic, indicating the recovery in the housing market will be gradual as many buyers await a further decline in mortgage rates.Residential starts decreased 14.8% last month to a 1.3 million annualized rate, after an upward revision to the prior month, government data showed Friday. Multifamily home construction plummeted by more than 35% after surging in the prior month, while single-family groundbreakings also slowed.The headline figure — which was lower than all estimates in a Bloomberg survey of economists — was the slowest pace in five months."The monthly housing starts numbers are extremely noisy and prone to revisions, but the bigger picture is that single-family starts are trending higher, lagging the drop in mortgage rates towards the end of last year, while multi-family starts are trending lower, lagging the rollover in rent inflation," Kieran Clancy, senior U.S. economist at Pantheon Macroeconomics, said in a note.Building permits, a proxy for future construction, decreased to a 1.5 million rate. Permits for one-family homes edged higher after rising consistently throughout 2023, and multifamily authorizations fell 7.9%, the most since September.The government's report showed housing starts fell in all four of the nation's regions, led by the Midwest and Northeast. The number of single-family homes completed plunged to the lowest level since May 2020.The housing market's recovery has struggled to maintain momentum as mortgage rates are still elevated near 7%. However, the nation's builders have been gaining confidence in recent months on expectations that a further decline in borrowing costs will boost demand.So far, builders have enjoyed limited competition from existing homes for sale. Homes available on the resale market are well below pre-pandemic levels as most owners remain reluctant to give up mortgages locked in at much cheaper rates.At the same time, the inventory of new houses for sale remains elevated and suggests builders may be cautious about beginning new projects.The National Association of Realtors will give a glimpse of the nation's resale market Feb. 22, when it releases existing-home sales figures for January.A separate report Friday showed prices paid to US producers rose in January by more than forecast, highlighting the sticky nature of inflation. 

A consumer has filed yet another class action lawsuit against a lender over a recently disclosed data breach, suggesting she's already suffered from the hack.Toni Hyde, who obtained a home loan from Premium Mortgage Corp. in 2021, is suing the company for at least $5 million in a complaint filed last week in a New York federal court. The Rochester-based Premium last month said a cyber attack this past summer compromised the names and Social Security numbers of 10,835 clients. The suit claims Premium wasn't specific enough in its disclosure to help affected consumers mitigate the harm caused by the incident. Hyde claims her Frontier Airlines credit card was accessed by an unknown party in December, between the time of the attack and Premium's notice.An attorney for Hyde didn't respond to requests for comment Thursday. Premium didn't address the lawsuit but said in a press release the attack, which occurred for a week in late August, apparently stemmed from an attachment sent from a government email from another state."Immediately upon learning of the attempted breach Premium Mortgage enacted multiple levels of analysis to determine if any of its customers had been impacted," the company's statement read.The lender claimed it didn't see any of its customers hurt by the hack, and offered 12 months of free credit monitoring and identity protection services through IDX, a subsidiary of cybersecurity firm ZeroFox.Neither Premium's disclosure nor the lawsuit contained further details around the culprit or the form of cyber attack, details often omitted or unknown by parties in other data breach suits.  Hyde's lawsuit referenced Premium's privacy policy, which as of Thursday afternoon informed consumers of the firm's cyber security measures including regular malware scanning.The lawsuit for four counts including negligence requests Premium adhere to increased cyber security requirements, including appointing a third-party assessor for 10 years to conduct technical testing. Randi Kassan, an attorney with Washington, D.C.-based Milberg Coleman Bryson Phillips Grossman, P.L.L.C., is representing Hyde. She also represents a plaintiff in a pending class action lawsuit against Carrington Mortgage Services and vendor Alvaria, which suffered a hack last March.Premium lists 10 branches in New York and 2 in Florida, and 76 sponsored mortgage loan officers according to consumer Nationwide Multistate Licensing System records. The lender, according to data from S&P Global, originated $971 million in mortgage volume last year through November.Numerous industry players such as Loandepot, Mr. Cooper and Planet Home Lending face class action complaints over major hacks they've disclosed in recent months. Most of those claims are far from potential jury trials, while a larger lawsuit against three servicers owned by Bayview Asset Management is further into its discovery phase.

The logo and name of Flashhouse LLC's real estate platform fello has an uncanny resemblance to Loandepot's real estate services platform mello, the latter alleges in a recently filed suit. The legal action filed in a federal court in California accuses the competing real estate platform provider of using "a trademark confusingly similar to Loandepot's federally registered trademarks…for mortgage lending servicers and various other real estate services."  By doing so, FlashHouse is "amplify[ing] consumer confusion," the suit filed Jan.9 said. Loandepot wants to "protect its valuable intellectual property rights" by having fello's logo taken down.Loandepot declined to provide commentary regarding the lawsuit. FlashHouse LLC did not respond to a request for comment.In the suit, the mortgage lender points out similarities between the style and look of the two logos. It also claims the email addresses created for customer outreach are strikingly alike. (Loandepot has a hello@mellohome.com email, while FlashHouse uses a hello@hifello.com email.)Such similarities could contribute to deception among the general public where they might assume that fello is associated with Loandepot, the suit claims. Irvine, California-based Loandepot has had its trademark registered for a little over six years. Meanwhile, Flashhouse filed an intent-to-use application to register the fello mark on Dec. 2, 2021, documents show. Furthermore, Flashhouse registered additional trade names with the Ohio Secretary of State including "fello insurance" and fello "mortgage" on March 31, 2022.The similarities between the two trademarks constitutes unlawful and unfair trade practices and unfair competition in violation of California state law, Loandepot argues.The mortgage lender also has qualms with fello operating and directing advertising to areas where Loandepot itself does business in Southern California. "Flashhouse has purposefully directed business activities toward consumers residing in this judicial district, including, without limitation, by entering into sales contracts with residents of this judicial district and directing online advertising toward residents of this judicial district," the suit said.Loandepot is seeking injunctive relief to prevent "irreparable harm" that will be caused by FlashHouse's use of a similar logo. Without such a ruling, "defendants will continue to offer real-estate-related products and services that infringe on the mello marks," Loandepot said.

Valley National Bancorp's stock price has fallen 17% since turmoil hit New York Community Bancorp, which also has a concentration in commercial real estate lending. "Not all CRE portfolios are created equally," said Travis Lan, Valley's deputy chief financial officer.Adobe Stock Few banks are as concentrated in commercial real estate as New Jersey-based Valley National Bancorp, whose stock has once again hit trouble as investors fret about real estate loans. The bank's stock price, which fell sharply during last year's banking crisis, has tumbled 17% since turmoil hit the neighboring regional lender New York Community Bancorp. But executives at Valley, along with analysts who follow the bank, note that its loans are more diversified than New York Community's apartment-heavy portfolio and that it has a solid track record at keeping losses contained."Not all CRE portfolios are created equally," Travis Lan, Valley's deputy chief financial officer, said in an interview.The bank acknowledges its high concentration in commercial real estate, a constant source of investor angst as some offices sit empty and other types of buildings struggle with rising interest rates and costs. Valley is among the few regional banks — New York Community is another — where commercial real estate loans make up more than 300% of total capital, a threshold that triggers additional regulatory scrutiny.One problem at New York Community is that its real estate portfolio is largely made up of rent-regulated multifamily buildings, a sector that's struggling as high interest rates intersect with New York state's stricter rent increase rules. The Long Island bank, reportedly facing pressure from regulators, recently took steps to bolster its position and has since seen a more than 50% drop in its stock price.Valley's rent-regulated portfolio is just $420 million, or less than 1% of its total loans. CRE-related loans make up around half of Valley's portfolio, which consists of a mix of apartments, retail buildings, offices, industrial buildings and health care facilities. Its portfolio is largely in New Jersey, New York City, elsewhere in New York state and in Florida, where Valley expanded years ago to diversify its footprint.No segment of CRE has struggled more than the office sector, which has been hit particularly hard by remote work, as floors of office buildings sit empty. And few cities are seeing that issue play out more acutely than New York City.But Valley has largely stayed away from the big office towers in Manhattan that are facing steep declines in their value. Its office portfolio is instead largely made up of smaller buildings in suburban areas, and the bank's executives say the owners of those buildings remain in good shape.Even if those property owners do hit trouble, Valley's small-building focus makes it easier to turn a troubled office property into apartments or industrial centers, said Valley President Tom Iadanza. Government officials across the country have explored turning stressed office buildings into new housing, but they're finding that it's hard to make the math work."You can't take a Midtown high-rise and convert it to anything else today. Financially, it just doesn't work," Iadanza said, contrasting that with Valley's office loans where "you can do a lot more because it's not as big a space."Some investors, sensing universal pain in commercial real estate, remain unconvinced. The ratings agency S&P Global also downgraded its rating on Valley last year by one notch, saying that a sustained period of high interest rates poses risks to its CRE-heavy portfolio.Steven Alexopoulos, an analyst at JPMorgan, has a neutral rating on Valley even as its shares hover around multiyear lows. Last year was "challenging" for Valley, which started 2023 thinking its net interest income would soar by 16% to 18% but ended up seeing basically no change, he wrote in a note to clients last month.Alexopoulos wrote that he's become "more comfortable" with the risks surrounding Valley's large commercial real estate portfolio and pointed to the company's track record in past cycles. After the 2008 crisis, Valley's strong underwriting helped keep its loan losses contained, while some competitors struggled.But investors need more proof that that track record is "still intact," Alexopoulos wrote, noting the company's strong growth in recent years and its expansion into new markets such as Florida and Alabama."Once a fresh credit report card is in hand, this will answer the question as to whether the company has been able to thread the needle and maintain its historically better than peer credit risk profile while simultaneously delivering above peer growth," Alexopoulos wrote in a note to clients.Other analysts are more optimistic and recommend that investors buy Valley's stock. High expenses and weaker income trends at Valley last quarter led to a disappointing earnings report, Stephens analyst Matt Breese wrote in a note to clients. But the "turning point is coming later this year" in the likely case that the Federal Reserve pivots to cutting interest rates, he predicted. Valley "continues to check off a few key boxes," including a balance sheet that's well positioned for lower rates, low exposure to New York City office buildings and rent-regulated apartments and a history of strong credit quality, Breese wrote."While we were disappointed with 4Q23 earnings, we think it's too soon to cut bait on what we think could be a strong turnaround story in 2024," he wrote.Higher interest rates are certainly putting some pressure on Valley borrowers, who are simultaneously dealing with higher building insurance premiums and maintenance costs. But the sticker shock of higher interest payments hasn't impeded building owners' ability to repay their loans to Valley.The bank has repriced a good chunk of its loan book to reflect today's higher interest rates without having to modify a single loan to make it easier for a struggling borrower to stay on track, according to company executives. Other borrowers who are facing loan repricings in the next year should also be well positioned to avoid modifications, Iadanza said.He chalks that up to Valley's conservative underwriting, including a policy to avoid loan amounts that surpass more than 60% of buildings' values on average."We don't deviate. We don't push the envelope on that portfolio," Iadanza said. As Valley's stock comes under pressure again, Iadanza said he and other executives have gotten a "handful of calls" from inquiring customers, and that any worries are quickly mollified.Those calls are far less frequent than they were last March and April, when the sudden failure of Silicon Valley Bank prompted worries that other regional banks would be next. At the time, Iadanza said he jumped on more than five calls a day; now it's been five in the span of a couple of weeks.But Lan, Valley's deputy CFO, acknowledged the recent stock drops aren't easy to stomach. "It's not fun looking at the screen, and it's tough internally, right, to deal with days where your stock's down 8% or 10%," he said.As some investors bet against Valley, the bank is having more conversations with "high-quality, long-only buyers" who see value in buying shares of Valley and other regional banks, Lan said.The KRE index, an exchange traded fund that tracks regional banks, jumped 3.19% on Thursday as investor worries over the sector eased. Valley's shares rose 3.47%, while New York Community's stock price increased 6.25%.On research platforms, the two banks do have similarities beyond just their proximity, Lan said. Like New York Community, Valley has lower capital levels than larger banks and a high concentration in CRE.But the "people that know us … acknowledge the differences" between Valley's portfolio and New York Community's, Lan said. Observers may also be cognizant that, unlike New York Community, Valley is unlikely to face a sudden surprise from regulators.Last year, New York Community quickly jumped above the $100 billion asset mark thanks to two acquisitions, subjecting it to a vast set of tougher regulatory requirements for larger banks. It had switched regulators under its acquisition of Flagstar Bancorp, making the Office of the Comptroller of the Currency its primary federal regulator rather than the Federal Deposit Insurance Corp.The OCC reportedly pressured New York Community to build more capital and announce the actions that ultimately triggered its recent stock volatility.Valley is different in two ways. It has some $61 billion of assets, putting the $100 billion mark much further away unless it undertakes a major merger. And if it were to cross that barrier, its lengthy history of being regulated by the OCC could help prevent sudden surprises."The OCC has been our regulator for, I think, as long as anyone here can remember," Lan said. "There is a different level of scrutiny that comes with that."

(Bloomberg) -- The New York State Common Retirement Fund plans to restrict its investments in Exxon Mobil Corp. and seven other oil and gas companies after reviewing their efforts to shift to a low-carbon economy.The pension plan will sell stocks and bonds, worth roughly $26.8 million, in Exxon, Guanghui Energy Company Ltd., Echo Energy Plc, IOG Plc, Oil & Natural Gas Corp., Delek Group Ltd., Dana Gas Co. and Unit Corp., New York State Comptroller Thomas DiNapoli, who oversees the fund's $260 billion, said in a statement.The public retirement fund, one of the biggest in the US, said four years ago it would review all of its fossil-fuel holdings as it sought to reduce investment risks linked to climate change. Last year it curbed holdings in 50 companies involved in coal, shale oil and gas, and oil sands, including Pioneer Natural Resources Co. and Hess Corp. The retirement fund said Thursday it plans to now focus on investments in utility companies and their efforts to shift away from fossil fuels. It also set a goal to invest $40 billion in sustainable and climate investments by 2035, after meeting an initial target of $20 billion. Those assets include energy storage, resource efficiency and green infrastructure. Additionally, the fund said it will boost its investments in climate indexes by 50% to more than $10 billion in the next two years, with a goal to double that by 2035. (Adds target for climate investments in fifth paragraph.)More stories like this are available on bloomberg.com

Sentiment among U.S. homebuilders rose to a six-month high in February as buyers continued to take advantage of mortgage rates that have fallen from their October peaks. The National Association of Home Builders/Wells Fargo gauge of housing market conditions rose by 4 points to 48 this month, according to data released Thursday. That beat the median estimate in a Bloomberg survey of economists that called for a reading of 46.Builder sentiment began rebounding late last year as mortgage rates declined, falling below 7% in December. While borrowing costs have started to rise again, that hasn't yet undermined the nascent recovery in the new-homes market.The Federal Reserve has signaled a willingness to lower interest rates this year, though progress in lowering inflation has slowed, pushing back expectations for when the central bank might start its cuts."While mortgage rates still remain too high for many prospective buyers, we anticipate that due to pent-up demand, many more buyers will enter the marketplace if mortgage rates continue to decline this year," Alicia Huey, chair of the NAHB, said in a statement. The NAHB's measure of expected sales increased three points, while gauges of prospective buyer traffic and current sales also rose.Builder sentiment climbed in all four regions of the US, with especially strong gains in the West and Northeast. With mortgage rates still down from their fall peaks, fewer builders are cutting prices to lure customers. In February, 25% of builders reported cutting prices, compared with 31% who trimmed prices a month earlier. The average price reduction has stayed at 6% for eight months. The share of builders offering incentives to customers also declined, to 58% in February from 62%. It was the smallest share offering incentives since August. Overall, the NAHB expects single-family starts to rise about 5% this year, NAHB Chief Economist Robert Dietz said in the statement. The federal government is scheduled to release data on January housing starts on Friday. 

For the first time since mid-December, average mortgage rates broke back above the 6.7% mark because the latest inflation report was hotter than expected, Freddie Mac said.The 30-year fixed-rate loan was 13 basis points higher on a week-over-week basis, up to 6.77% from 6.64%, the Freddie Mac Primary Mortgage Market survey found. For the same time last year, the rate was 6.32%.This week the 15-year FRM moved back above 6% for the first time since December, up 22 basis points to 6.12% from 5.9% for the week of Feb. 8. At this time in 2022, it was at 5.51%.The news from the Consumer Price Index report, which came as a surprise to some, could affect the upcoming spring purchase market."The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season," said Sam Khater, Freddie Mac chief economist, in a press release. "According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier."The Freddie Mac survey had been in a range between 6.6% and 6.7% since Dec. 19, after dropping below 7% the prior week, while other indicators, including Zillow's rate tracker had been more closely tracking changes in the 10-year Treasury yield.As of Thursday morning, Zillow put the 30-year FRM at 6.69%, up 21 basis points from last week's average of 6.48%."Rate cuts that the market expected in the first half of this year may simply not materialize, because strong January economic data raised the risk that disinflation could be stalling," said Orphe Divounguy, senior macroeconomist at Zillow Home Loans, in a statement issued Wednesday night. "As a result, yields and mortgage rates soared. Mortgage rates bottomed in the last week of December and have trended up ever since."The 10-year yield was at 4.25% as of 11:30 a.m. eastern time on Thursday morning, down nearly 2 basis points on the day, but it peaked at 4.32% on Wednesday. On Feb. 1, the 10-year was at 3.86%.Redfin's economists expect rates to remain around 7% in the near term. "Activity should pick up a bit in the spring, partly because it'll be selling season and partly because people are getting more and more accustomed to elevated rates," Redfin Economic Research Lead Chen Zhao said in a press release. "We expect mortgage rates to start declining later in the spring as inflation eases and the Fed finally starts cutting interest rates."Divounguy is relatively bullish on the near-term for home sales activity as well. The problem last spring was that people weren't selling homes."New listings are higher this year, giving buyers more options," Divounguy continued. "If layoffs remain low, and core inflation continues to moderate, housing market activity should rebound modestly this spring — with slightly lower price growth but more sales."Meanwhile the Personal Consumption Expenditures index has been below the target for the past three months, Divounguy said, and issued a warning to the market: Be ready: the release of the PCE report in two weeks will likely cause more rate volatility."