FHFA announces maximum conforming loan limits for 2019
The Federal Housing Finance Agency (FHFA) has announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. See below for the new limits that will be available for origination next month.
1 unit – $484,350
2 unit – $620,200
3 unit – $749,650
4 unit – $931,600
1 unit – $726,525
2 unit – $930,300
3 unit – $1,124,475
4 unit – $1,397,400
Stocks are little changed to begin Tuesday’s exchange as the trade war narrative shifts back into focus. Yesterday’s rally in equities was well received on the street, but short lived. The POTUS conveyed that he plans to increase tariffs on $200 billion worth of Chinese goods, and may potentially implement levies on all remaining imports from the world’s second-largest economy. The S&P500 is currently trading at 2,674.14, 0.03% higher.
Treasuries are moving lower in the AM after Federal Reserve Vice Chairman Richard Clarida said that rate hikes “accumulate more information from the data about the ultimate destination for the policy rate and the unemployment rate at a time when inflation is close to our 2 percent objective,” clearly supporting the US Central Bank’s policies. The US 10-YR Note is currently trading at 3.0626%, 0.0091 higher.
MBS Performance and Volumes
MBS mostly outperformed Treasuries on Monday. 30-year Fannie 3s through 4.5s outpaced the 10-year note by 2-3 ticks, duration-neutral, although FN 5s only managed to track 10s. Ginnie II 3.5s through 5s similarly outperformed, while GNII 3s were the laggards of the stack, ending the day underperforming 10s by 1/32. 15-year Fannies outperformed the 5-year note by 1-2 ticks, with 3s and 3.5s the best performers in the Dwarf coupon stack. Trading volumes were relatively light, with activity totaling $143 billion including just under $10 billion in spec pools.
TBA MBS’ are little changed to begin Tuesday’s exchange as trade war fears couple with hawkish central bank rhetoric to subvert pricing. Additionally, the S&P CoreLogic Case-Shiller 20-City Index came in at a 5.15% increase YoY, versus analyst estimates of a 5.20% increase for the month of September. This marks the slowest pace of home-price gains in nearly two years, and further supports the notion that home-buyer interest is slowing amidst rising interest rates and lofty home valuations. Liquid coupons are currently trading 0+ tic higher.
The USD is moving higher in the AM as Brexit fears push investors out of the EUR and GBP. The DXY is currently trading at 97.25, 0.20% higher.
Oil is flipping between gains and losses in the early morning shuffle as investors patiently await color from the G-20 summit in Argentina, where a plethora of OPEC members will be present ahead of their scheduled meeting in Vienna next week. WTI is currently trading at 51.93, 0.58% higher.