Mortgage News Daily

Respectable Recovery. Is It a Trap?
Respectable Recovery. Is It a Trap? First thing's first: the parabolic flourish of bond selling of the past 2 weeks is arguably unprecedented in recent memory. Specifically, we've seen similar levels of overall weakness over similar time frames, but we haven't seen the same sort of concentrated acceleration of selling at the tail end of a months-long selling trend. The only remotely comparable precedent was late September 2023 when a Fed dot plot surprised the market with a higher rate outlook followed by 2 weeks of stronger-than-expected econ data. There was a decent recovery on several occasions on the way up, but a sustainable recovery didn't start until early November. Throughout that process, it was data that set the tone. With that in mind, we're heading into a week with big-ticket data and we expect bonds to take cues accordingly. Of course oil and war headlines continue to matter as well. While today's recovery was "nice," it doesn't make any guarantees about where we'll end up next week. That said, it very well could indicate that bonds have sold as much as they need to sell unless next week's data/events add additional provocation.  Econ Data / Events Core CapEx (Aug) 1.6% vs 0.5% f'cast, 0.2% prev Durable goods (Aug) 0% vs -0.4% f'cast, 1.1% prev Consumer Sentiment (Sep) 48.1 vs 47.6 f'cast, 51.7 prev Sentiment: 1y Inflation (Sep) 4.6% vs 4.6% f'cast, 4% prev Sentiment: 5y Inflation (Sep) 3.4% vs 3.4% f'cast, 3.3% prev U Mich conditions (Sep) 50.9 vs 49.5 f'cast, 51.9 prev Market Movement Recap 08:54 AM MBS up nearly a quarter point and 10yr down 1.9bps at 5.182 12:06 PM Rallying on war headlines. 10yr down 3.1bps at 5.169. MBS up 11 ticks (.34). 03:20 PM Best levels.  MBS up more than 5/8ths and 10yr down 3.7bps at 5.164
New Home Sales Back in The Range After Uncommonly Big Bounce
The new home market returned to the longer-term range last month, with sales seeing their 4th biggest rebound in 4 years.  Sales of new single-family homes rose to a seasonally adjusted annual rate of 684,000 in August, up 6.4% from July's revised 643,000 but 2.0% below the same month last year. The increase puts sales back above the 600,000 mark after July's pullback, although the broader trend remains relatively flat. The number of new houses for sale was virtually unchanged at 483,000 , down 2.0% from a year earlier. With sales picking up while inventory held steady, the implied supply fell to 8.5 months , down from 9.0 months in July and essentially unchanged from August 2025. Pricing was mixed, the median sales price edged up to $393,700 , a 0.4% increase from July but 5.8% below August 2025. The average sales price fell to $478,700 , down 9.1% from July and 8.8% from a year earlier. As a reminder, price movements in this data set are not necessarily apples to apples as they don't adjust for changes in square footage, neighborhood, etc. Sales (MoM): +6.4% Sales (YoY): -2.0% Inventory (MoM): 0.0% Inventory (YoY): -2.0% Months' Supply: 8.5 (down from 9.0 prior month; 8.5 YoY) Median Price: $393,700 Average Price: $478,700
Refi Demand Logically Lower While Purchases Grind Sideways
Mortgage demand remained subdued last week as the 30-year fixed rate climbed above 7%. The Mortgage Bankers Association (MBA) reported a 1.5% decline in total mortgage application volume for the week ending September 18, following a 4.1% drop the week before.  Purchase activity was the only saving grace. While technically 1% lower week-over-week, it has generally been moving sideways for the past few weeks.  Refinance demand was more sluggish. The Refinance Index declined another 3% and was 62% lower than a year earlier. MBA said the pace of refinancing has now reached its slowest level since February 2025 , a reflection of how few existing borrowers can benefit from replacing their current mortgage with one carrying today's higher rate. "Mortgage rates vaulted higher last week, with the 30-year fixed rate at 7.12 percent – the highest level since May 2024," said Mike Fratantoni, MBA's SVP and Chief Economist. He added that the higher fixed rates prompted more borrowers to consider adjustable-rate mortgages, even as both purchase and refinance applications continued to decline. The shift toward ARMs was one of the more notable developments in the latest data. ARMs accounted for 9.8% of application volume, up from 8.4% the week before. The average rate for a 5/1 ARM fell to 6.10%, putting it more than a full percentage point below the 30-year fixed rate. That spread is large enough to make the adjustable option more noticeable to borrowers facing 7% or higher fixed rates.
Mortgage Rates Had a Better Day, Ultimately Dropping Just Slightly
(NOTE: This article was updated  at 5:30pm from the version originally published at 2:36pm ET to reflect late day rate improvements). Mortgage rates have risen more than half a point in 2 weeks. While that's certainly not the fastest jump we've seen, it is an extraordinarily uncommon pace--happening less than once per year on average (i.e. it only happened 3 times between 2010 and 2019). Today's initial increase was modest in the bigger picture, adding only 0.04% to yesterday's levels and leaving the average top-tier 30yr fixed rate still just a hair below 7.50%. This is roughly in line with the highs from early 2024 and still well below the highs of 8% seen in October 2023. Much of that initial 0.04% increase can be thought of as a hangover from yesterday's volatility. In fact, the underlying bond market had already improved day-over-day at the time we marked the 0.04% increase. Thankfully, additional gains in the afternoon led lenders to drop rates back below yesterday's latest levels. The final mark was 7.43% for the average lender. [thirtyyearmortgagerates] Whether this friendly bounce means anything about the road ahead is a different matter. If traders knew what the road ahead looked like with any certainty, they wouldn't sit on their hands and lose money between now and then. In other words, anything that you or I can conclude about the near-term future is already priced-in to current levels. The next leg higher or lower for rates will likely be determined by a combination of economic data that hasn't come out yet and war-related headlines that could either help or hurt the fuel price outlook. Next week is a big week for econ data and every week brings new potential for oil price fluctuations these days. In addition, the month/quarter end trading environment increases the risk of volatility regardless of directional cues from data/events.
Cotality's Product Array; NEXA on the Move, Mike Kortas Interview; AI and Experimentation
“Hey, it’s either network or no work.” For lenders, networking is an important part of their business. In addition, generally speaking, renters are prime “feeding grounds” for loan originators searching for clients. But there’s some disturbing signs out there: what if renters can’t even afford their rent? I was talking to a successful LO recently who uttered, “50 calls, 5 leads, 2 applications, 1 closing. The next day, 50 calls, 5 leads, 2 applications, 1 closing. Rinse and repeat, every day, it’s a pyramid.” Being an originator is a numbers game, as is running a branch. A manager recently told me, “Manage to the numbers. It doesn’t matter how long your team has been with you.” You can be cheap, easy, or fast. Pick one. You’re not going to be all three consistently. Meanwhile, LOs faced with keeping up with technology. Recently I received, “I stopped asking, ‘Will AI replace me’ and started asking, ‘How can AI make me better?’” And I regularly receive emails to the effect of saying, “I am not competing against other LOs. I am competing against Google, YouTube, TikTok, AI search, Reddit, ChatGPT, and (Today’s podcast can be found here. This week’s ‘casts are presented by Spring EQ, the clear choice in home equity and non-QM solutions. Since 2016, Spring EQ has helped more than 160,000 homeowners access over $16 billion in equity. Today’s has an interview with Spring EQ’s Reno Heine on actively navigating a volatile mortgage market by expanding into non-QM offerings, evolving its third-party origination strategies to meet modern broker needs, and advancing a new digital platform to capture future growth opportunities.)
More Mid-Morning Selling, But MBS Outperforming
10yr yields began the morning in slightly stronger territory, generally following a modest decline in oil prices overnight. That trend actually ran its course by 5am ET and yields began rising gradually at that time. Sellers picked up the pace after 10am (partly oil-related, but certainly also plenty of bond-specific selling pressure). Yields are now up a few bps on the day with the 10yr at 5.227 as of 10:45am. MBS, meanwhile are still just a hair stronger (though they've also lost ground at the same time as Treasuries). The outperformance has a lot to do with the yield curve today. Shorter term yields are still green, and MBS tend to trade less like a 10yr and more like a 5yr.  The rest of the day is anyone's guess. There's a lot of fear and uncertainty in the bond market this week. Next week's econ data is high-stakes, and the month/quarter-end trading environment adds extra potential volatility to the mix.
Brutal Day And For The Scariest Reasons
Brutal Day And For The Scariest Reasons Despite a slightly stronger start and initial promise of resilience in the face of higher oil prices, bonds bounced nauseatingly higher starting around 10am. Oil prices do a fairly terrible job of explaining the bond weakness, even though oil moved a few bucks higher throughout the day. So what moved markets? That's the scary part: there was no obvious intraday catalyst. The fact is that a lot of traders have decided to sell a lot of bonds very quickly. As obvious as that sounds, we're referring to a staggering uptick in volume as well as average volume per minute. Today, it resulted in roughly 3.8m 10yr futures contracts. Contrast that to Friday the 11th when volume was "only" 2.8m contracts (the prevailing range for the past few months has largely been 1-2m). This is the kind of price action we have in mind when attempting to define undefinable concepts like "repricing of risk."  Econ Data / Events Continued Claims (Sep)/12 1719.0K vs 1750K f'cast, 1730K prev Jobless Claims (Sep)/19 197.0K vs 201K f'cast, 196K prev Market Movement Recap 08:51 AM Initially a hair weaker overnight but gaining some ground now. MBS up 2 ticks (.06) and 10yr down 1.9bps at 5.093 11:35 AM MBS down 10 ticks (.31) and 10yr up 5.4bps at 5.167 04:25 PM MBS down 3/4th of a point and 10yr up 10.2bps at 5.213
Mortgage Rates Now Close to 7.5%
More than a few media outlets will tell you that 30yr fixed mortgage rates are just now moving over 7% based on the fact that Freddie Mac's weekly rate survey hit 7.03%, up from 6.95% last week.  Before continuing, let's be clear that Freddie's weekly rates are a valuable resource for long-term, big picture analysis. But the survey is not an ideal tool to keep track of where rates are on any given day. There are a few reasons for this, but the easiest to understand is that today's update from Freddie is calculated from an average of rates seen between last Wednesday and yesterday. In other words, it hasn't even measured what rates did today, not to mention the fact that the number is artificially dragged down by lower rates earlier on in the 5-day cycle. In daily terms, 7% was first broken back on September 10th following inflation reports that raised the risk of the Fed rate hike seen last week. A combination of Fed comments, higher oil prices, and stronger economic data have added to the pain since then. As of yesterday, our daily rate index was already up to 7.26%. Today, it's up to 7.45%. [thirtyyearmortgagerates] It is still definitely possible for a mortgage NOTE RATE to be quoted in the high 6% range today, but 7.45% is the rate that captures an apples to apples comparison to all of the past daily rate index entries we've published over the years. A rate that's near or under 7% would require additional upfront points/costs/buydown relative to the average rate quote methodology. Our index automatically takes points/buydown into account in order to capture the true change in rates over time.
Verification, MERS Review, AI, LOS, Compliance Tools; KBW's Bose George Interview
When in doubt, hold a conference. It is an aging group of attendees… exhibitors’ displays and giveaways tell the tale. Frisbees have been replaced with reading glasses. Golf balls by nail files and hangover remedy pouches. MBA cut its 2027 forecast to $2.101 trillion; $634 billion is what the Mortgage Bankers Association now expects Americans to refinance in all of 2027. What’s new out there? At the ACUMA event, I had a chance to spend some time with Kent Staudmyer with NFP Property & Casualty Services, Inc.. Home equity is a big growth area, and NFP provides a credit enhancement for Home Equity Loans and HELOC’s through its Equity Protection Program. (Kent said the Program creates more loan opportunities and measurable growth for your home equity portfolio by expanding your CLTV and guideline parameters.) Robbie Chrisman reported that in Schnectady, at the NYMBA, the conversation in the hallways includes Ginnie Mae’s focus on liquidity, continuing to have young people enter the business, bottlenecks for Fannie Mae (like affordability pressures due to the lock in effect, laws and regulations, zoning & permitting, land, lumber, and labor), the MBA seeing origination activity continuing to be constrained, and companies finding ways to provide more borrower eligibility in a responsible manner. (Today’s podcast can be found here. This week’s ‘casts are presented by Spring EQ, the clear choice in home equity and non-QM solutions. Since 2016, Spring EQ has helped more than 160,000 homeowners access over $16 billion in equity. Today’s has an interview with KBW’s Bose George on his market research and view for the industry moving forward.)
Slightly Stronger Start Despite Higher Oil Prices
Let's not get too excited. After all, today's yields are the second highest in 19 years, but still... this morning's price action is better than a sharp stick in the eye. Bonds held almost perfectly flat in the overnight session and Fed rate expectations tempered yesterday's exuberance a bit (hence, 2yr yields are down 3-4bps more than 10yr yields). The refreshing part is that we're seeing modest gains despite oil prices being a few bucks higher. In other words, oil gave bonds an excuse to keep losing ground this morning, but instead, we're modestly stronger. None of today's data has the same "shoot the moon" potential as did yesterday's PMIs, and the market would hesitate to draw overly dire conclusions even if today's 7yr Treasury auction is bumpy. For the most part, we're waiting for next week's econ data.