Tradeweb’s August mortgage volume reached $200.6B
Investor interest in mortgage-backed securities is on the rise. Tradeweb Markets Inc., a global operator of electronic marketplaces for over-the-counter fixed income securities, reported that year-over-year, its mortgage bonds trading volume increased 14.1% in August.
The average daily volume (ADV) of mortgage bonds traded on the Tradeweb system in August increased to $200.6 billion, as record low mortgage rates continue to fuel new home sales and refinancing activity, the company said in a statement, and origination sustained the growth pattern seen in July.
August’s highlights include, continued trading growth “in specified pools, with the addition of new liquidity providers,” Tradeweb said, suggesting healthy investor interest.
In addition, electronic trading of Treasury Bonds that will mature in more than ten years “reached an ADV record.” The U.S. government bond ADV increased to $87.4 billion, up 2.2% year-over-year. Comparatively, European government bond ADV increased 5.7% year-over-year, to $22.2 billion.
Overall trading activity on Tradeweb rose year-over-year, despite dramatically lower and “extremely muted rates volatility compared to August 2019,” the company said, with strong activity at the front-end of the curve. For example, alongside records in U.S. Treasury bond trading, a growing number of clients used “direct streaming for on-the-run Treasuries,” and share of the Trade Reporting and Compliance Engine (TRACE).
“We saw strong volumes in U.S. Treasuries, European government bonds and mortgages, which underscores the breadth of our platform,” said Lee Olesky, CEO of Tradeweb.
Tradeweb reported a total trading volume of $15.7 trillion in August for rates, mortgages, credit, equities and money markets. The month’s average daily volume decreased 9.9% year-over-year, to $747.1 billion.
“Two important themes defined our activity in August – accelerated electronification among our clients and a stronger competitive position despite historically low volatility,” Olesky said.
“We had our highest-ever share of TRACE volume for U.S. high-grade, as adoption of all-to-all anonymous trading, portfolio trading and net spotting protocols took root in the work-from-home environment.”
The U.S. credit trading volume on the Tradeweb platform rose 65.9%, compared to 2019, the company said. In August, U.S. high-grade credit trading on Tradeweb represented a record 18.1% share of TRACE, of which 7.7% traded fully-electronically.
Tradeweb’s advanced technologies developed to enhance price discovery, order execution and trade workflows at greater scale, help reduce trading risks, according to the company website. Tradeweb serves 2,500 clients in more than 65 countries.
Redfin: Bidding wars continue
It is sellers’ paradise and the worst nightmare for buyers who keep bidding. Redfin reported up to 54.5% of offers on the popular real estate brokerage platform faced bidding wars in August.
Even though that finding is slightly lower than 57.3% in July, August marked the fourth month in a row that more than half of Redfin offers received at least one competing bid.
Redfin chief economist Daryl Fairweather expects competition “to continue picking up in more affordable parts of the country,” with bigger homes, which explains why the broader Bay Area is still the most competitive part of the country, even as sellers are dropping prices in the smaller San Francisco metro.
Competition is especially strong along California’s coastline where the three most competitive markets in August, San Francisco, San Jose area and San Diego, where roughly 65% of Redfin offers facing bidding wars, the report notes.
Competition continues in relatively more affordable places too. Bidding from migrants trying to relocate in affordable inland metros is up. Nearly 60% of offers in the top three most popular destinations for Redfin.com users faced competition in July, ranging from 57.8% in Sacramento, 56.5% in Phoenix and 58.2% in Austin.
“The market is on fire. There just isn’t enough on the market to supply the huge demand for homes,” said San Diego Redfin agent Lisa Padilla. “A lot of military buyers are trying to take advantage of the low interest rates for VA loans. Anything on sale for less than $600,000 has multiple offers, and sometimes they’re getting more than 20 offers. Only condos are a little slow, as most buyers want a home with a yard.”
The housing market continues to be a bright spot in an uncertain economy, despite the pandemic, thanks to exceptionally low mortgage interest rates, analysts wrote. The average 30-year fixed rate at 2.91% the week ending August 27, driving buyers to compete.
“The pandemic-driven trend of people moving away from densely packed cities toward more affordable and spacious regions means homes in places like Sacramento and Phoenix are becoming nearly as competitive as the Bay Area,” said Fairweather, and low mortgage rates are motivating homebuyers “to go through with it.”
Bay Area Redfin agent Suzanne Masella reported that many tech workers who are permanently working from home are selling their San Francisco condominiums and relocating to Alameda, Contra Costa and Marin counties, where they can buy a house for the same price.
“There’s such huge demand for homes with yards, a separate office and a quiet space for the kids to do schoolwork that a well-priced single-family home, between $950,000 and $1.5 million in this area, could end up with 15 to 20 offers,” she said.
Nonetheless, single-family homes and homes priced under $1 million are more likely to face competition, the report notes.
PointServ integrates with APPSolute transcripts
Direct mortgage document sourcing and verification boosts operational efficiency and prevents fraud. PointServ Technologies, a provider of source data for consumer financial documents for mortgage lenders and banks, has integrated with APPSolute Transcripts, a tax transcript solution developed by LoanBeam.
Under the partnership with LoanBeam, a document conversion and income verification subsidiary of Navesink Mortgage Services LLC, PointServe clients will have direct access to Internal Revenue Service (IRS) tax transcripts through the APPSolute Transcripts portal.
PointServ’s automated 4506-T Fulfillment technology will integrate with LoanBeam’s self-employed calculation tool and tax transcript solution, “to enable lenders to simultaneously calculate and verify tax return data,” the Burlingame, Calif., based fintech said.
Launched in August, APPSolute Transcripts is a part of LoanBeam’s APPSolute Certainty product offering. It allows lenders and investors to easily access IRS tax transcript data within LoanBeam’s existing platform, through the APPSolute Income borrower income verification and calculation platform that delivers data up front to mitigate risk.
The APPSolute Transcripts portal offers a three-fold solution, explained Roby Robertson, vice president of marketing at LoanBeam. “APPSolute Income pre-checks data for entry errors, verifies data against LoanBeam’s income calculations, doesn’t break the bank,” and is easy to activate.
“This integration further strengthens the synergistic partnership between PointServ and LoanBeam,” said Matt Ellis, SVP of business at PointServ. “We are proud to support a cutting-edge tax transcript offering that will help lenders certify borrower income in both an efficient and cost-effective manner.”
PointServ’s digital validation services also include automated 4506-T transcripts and instant access to borrower assets, payroll and tax documents and data.
“We choose to leverage PointServ’s 4506-T Fulfillment technology to power APPSolute Transcripts,” said Jerry Melia, COO of LoanBeam, because the technology, service and company culture are truly compatible.