Pick your poison, mortgage people!  Bad economic news and falling rates or vice versa.  Actually, it typically doesn't much bother those of us in the mortgage origination community when we see some random piece of economic data coming in weaker than expected, as long as it's helping rates.  Sure, over time, a weaker economy is no fun for anyone, and it has eventual implications for the housing market.  But in today's case, the data is especially double-edged, as it concerns homebuilder sentiment.

This has traditionally bee a good bellwether of housing momentum, but it hasn't really done anything too interesting for the past 3 years in terms of big surges or drops.  That changed today.

• NAHB Housing Market Index
  • 60 vs 67 forecast (headline index)
  • 67 vs 64 previously (current sales)
  • 65 vs 75 previously (6-mo outlook)
  • 45 vs 53 previously (buyer traffic)

Due to the lack of drama in recent years, this hasn't been much of a market mover.  But today's numbers missed the mark by enough to get traders' attention.  10yr yields have rallied a quick 1.5bps since the data (that's meaningful when it comes to NAHB), and stocks have sold off a bit more.

Both Treasuries and MBS are still in modestly weaker territory on the day, but now are close enough to 'unchanged.'