WTMS Blog Today = What’s up in Mortgage Today (PM) – 09/26/2025

Mortgage-backed securities faced selling pressure today as UMBS 30-year 5.0% coupons declined 5/32nds to close at 99-09, showing modest weakness despite minimal market reaction to morning PCE inflation data. The 10-year Treasury yield climbed to 4.18%, representing a one basis point increase from yesterday’s session. This modest uptick in yields reflects continued market uncertainty ahead of key economic data releases scheduled for the remainder of the week.

The Securities and Exchange Commission made significant headlines today by announcing a comprehensive review of mortgage-backed securities regulations, seeking public comment on improving disclosure requirements for residential mortgage-backed securities and asset-backed securities. This regulatory initiative, announced just hours ago, aims to enhance transparency and strengthen investor protections in the secondary mortgage market. The timing of this announcement coincides with ongoing discussions about market liquidity and standardization in the RMBS space. Market participants showed restrained reactions to today’s Personal Consumption Expenditures data, with bond traders largely maintaining positions established earlier in the week. The lack of significant movement suggests investors are positioning defensively ahead of tomorrow’s jobless claims data and next week’s non-farm payrolls report.

Lock-float considerations remain challenging for mortgage originators as the narrow trading range continues to create uncertainty for rate commitments. Mortgage rates concluded the week essentially unchanged from Monday’s levels, with 30-year fixed rates holding near 6.38% according to major lenders’ rate sheets. The stability in pricing reflects the current equilibrium between modest economic data and ongoing Federal Reserve policy expectations. Origination volume remains constrained by elevated rate levels, though refinancing activity has shown marginal improvement in select markets where borrowers secured rates above current market levels.

GNMA securities tracked broader mortgage-backed security weakness but demonstrated relative outperformance compared to conventional UMBS products throughout the trading session. The government-backed nature of GNMA securities continues to attract institutional buyers seeking credit quality amid lingering economic uncertainties. This supportive demand has helped maintain tighter spreads between GNMA and Treasury securities compared to conventional mortgage products.

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