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Mortgage Today (AM) - 02/24/26

Week In Review
February 24, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 02/24/2026 Bonds are finding strength this morning as general risk aversion dominates trading sentiment amid trade-related uncertainty. The 10-year Treasury yield holds steady at 4.033% while mortgage-backed securities show modest declines across major coupons. This defensive positioning creates a more favorable environment for mortgage originators seeking stable pricing conditions. Market movement remains subdued with overnight trading showing minimal volatility. UMBS prices declined by just 1-3 basis points while the 10-year yield increased a mere 0.8 basis points. Such contained movements suggest the bond market is consolidating within its current range, providing temporary insulation from dramatic rate swings. Housing data painted a mixed picture with December home price indices showing cooling momentum. The FHFA Home Price Index rose only 0.1% monthly, well below the 0.3% forecast and previous month's 0.6% gain. Case-Shiller's 20-city index actually declined 0.1% month-over-month, marking the first negative reading in recent months. Employment data from ADP's weekly payrolls report showed modest improvement with 12.75k new jobs versus the previous week's 10.25k. While this represents growth, the numbers remain relatively contained and unlikely to drive significant market reactions. The data supports the narrative of gradual economic normalization without triggering inflation concerns. Locking vs Floating Current market conditions favor cautious positioning as bonds maintain a stronger bias within their trading range. Trade-related announcements could quickly eliminate the current insulation from volatility, making timing unpredictable. Economic data would need to show significant strength to push rates meaningfully higher from current levels. Consider locking deals with near-term closing dates given the potential for sudden policy-driven market shifts. Today's Events - ADP Weekly Payrolls: 12.75k vs 10.25k previous - Case Shiller Home Prices-20 y/y (Dec): 1.4% vs 1.4% forecast, 1.4% previous - CaseShiller 20 mm nsa (Dec): -0.1% vs -- forecast, 0% previous - FHFA Home Price Index m/m (Dec): 0.1% vs 0.3% forecast, 0.6% previous - FHFA Home Prices y/y (Dec): 1.8% vs -- forecast, 1.9% previous Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.38 | -0.03 | | 5.5 | 101.57 | -0.03 | | 6.0 | 102.52 | -0.01 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.24 | 0.01 | | 5.5 | 101.2 | -0.04 | | 6.0 | 102.13 | -0.04 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.456 | 100.085 | 0.016 | | 3 yr | 3.46 | 100.113 | 0.016 | | 5 yr | 3.594 | 100.71 | 0.008 | | 7 yr | 3.794 | 101.259 | 0.01 | | 10 yr | 4.033 | 99.728 | 0.001 | | 30 yr | 4.688 | 98.984 | -0.016 | Market Data

Mortgage Today (PM) - 02/23/26

Week In Review
February 23, 2026

WTMS Blog Today = What's up in Mortgage Today (PM) - 02/23/2026 General risk aversion is driving a welcome bond rally as the week begins. MBS held at their strongest levels with UMBS 5.0 coupon gaining 10 ticks to 100.41, while the 10-year Treasury yield dropped 52 basis points to 4.033%. This improvement should translate directly into better rate sheets for originators tomorrow morning. Factory Orders disappointed at -0.7% versus -0.5% forecast, adding to economic uncertainty that's helping bonds. The weak manufacturing data reinforces concerns about economic momentum, though the impact remains secondary to broader trade-related market anxiety. Bond traders are positioning defensively amid ongoing uncertainty about policy changes. The White House unveiled its institutional investor homebuying ban, targeting firms owning more than 100 single-family homes. This threshold affects hundreds of investment companies while including exemptions for builders and renovators. The proposal gives Treasury Secretary broad authority to modify criteria, though Democrats are pushing back on what they see as too many loopholes. January foreclosures surged 32% year-over-year to 40,534 properties nationwide, marking the 11th consecutive month of increases. This troubling trend signals continued distress in the housing market as affordability challenges persist. Default notices, auction notices, and bank repossessions all contributed to the sharp uptick from January 2025 levels. National home prices show minimal 0.2% growth year-over-year through January 2026, a dramatic slowdown from 2.6% growth the previous year. About one-third of major markets are experiencing price declines, with Sun Belt regions like Texas, Florida, and Colorado seeing the most softness. The stabilization comes as inventory levels have stopped climbing in most markets after significant increases through mid-2025. HUD proposed restricting public housing to citizens and eligible noncitizens only, potentially displacing thousands of mixed-status families. The rule would require all residents to prove citizenship or eligible status, including seniors who previously only needed to show age. This represents part of the administration's broader immigration enforcement efforts and mirrors policies outlined in Project 2025. Supreme Court action on tariffs created brief market volatility but ultimately supported bond strength. The Court blocked most existing tariffs, prompting the Administration to implement a temporary 15% across-the-board rate. The new tariffs expire in 150 days without Congressional ratification, potentially reducing effective rates from 16% to around 9%. New home sales declined 1.7% monthly to 745,000 units despite posting 3.8% annual growth. The market faces a significant oversupply with 472,000 homes for sale representing 7.6 months of inventory. Builders are focusing on lower-priced homes with median prices at $414,000 to attract buyers in the challenging environment. Locking vs Floating Bonds are benefiting from trade-related uncertainty, but originators should remain cautious about floating longer-term deals. The market appears somewhat insulated from immediate pressure, though any major trade announcements could quickly change dynamics. Economic data would need to show significant strength to push rates meaningfully higher from current levels. MBS prices provide good intraday risk management tools while 10-year yield levels help track broader momentum trends. Consider locking deals with shorter closing timelines given ongoing policy uncertainty. The 150-day timeline on new tariffs creates a natural inflection point that could impact market direction. Today's Events - Factory Orders: -0.7 vs -0.5 f'cast, 2.7 prev Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | GNMA 30 yr | Coupon | Price | Intra-Day Change | Treasuries | Term | Yield | Price | Intra-Day Yield Change | UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.41 | 0.1 | | 5.5 | 101.6 | 0.06 | | 6.0 | 102.52 | -0.01 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.23 | 0.05 | | 5.5 | 101.24 | -0.01 | | 6.0 | 102.17 | 0.15 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.45 | 100.097 | -0.031 | | 3 yr | 3.447 | 100.15 | -0.054 | | 5 yr | 3.586 | 100.746 | -0.062 | | 7 yr | 3.788 | 101.294 | -0.06 | | 10 yr | 4.033 | 99.732 | -0.052 | | 30 yr | 4.704 | 98.737 | -0.02 | Subscribe free at WellThatMakesSense.com to get this analysis in your inbox daily. Market Data

The "Phantom" Paychecks: Why Wall Street Thinks the 2026 Jobs Boom is a Statistical Illusion

Money
February 23, 2026

In early 2026, the financial world is witnessing a surreal disconnect. While the S&P 500 reaches new heights, a growing chorus of Wall Street analysts and economists is sounding the alarm: the "strong" jobs data we’re seeing might be a statistical illusion.

Following the recent release of the January 2026 jobs report, which initially boasted a gain of 130,000 jobs, a deeper dive into the numbers reveals significant cracks in the foundation of the U.S. labor market.

The Problem: When "Strong" Numbers Hide a Weak Reality

The Fortune article highlights a mounting frustration among traders. The headline numbers suggest a resilient economy, but the underlying data tells a story of stagnation.

Key discrepancies identified by analysts include:

Massive Downward Revisions: The Bureau of Labor Statistics (BLS) recently revised 2025's total job growth from an estimated 584,000 down to a staggering 181,000. That’s nearly 70% of the growth "evaporating" in hindsight.
The Birth-Death Model Flaw: A significant portion of reported job growth comes from the BLS’s "Birth-Death Model," which estimates jobs created by new businesses. Critics argue this model is failing to account for the current high rate of business closures, leading to "phantom" job gains.
The "Low-Hire/Low-Fire" Trap: We are currently in a labor market where companies aren't hiring, but they aren't firing yet either. This "frozen" state keeps the unemployment rate low (currently 4.3%), but it doesn't represent a healthy, growing economy.

Validity and Probabilities: Is the Skepticism Justified?

Assessment: High Validity. The skepticism isn't just "bearish talk." When the ADP National Employment Report (private sector data) shows only 22,000 gains while the BLS reports 130,000, something is off. Furthermore, the response rate for BLS surveys has plummeted from 60% to around 40% in recent years, making the data more prone to volatility and error.

Probability of Future Revisions: 85%. Given that every monthly report in the past year has eventually been revised downward, there is a very high probability that the "strong" January numbers will be quietly slashed in the coming months.

The Ramifications: A Fed Flying Blind

The most dangerous consequence of inaccurate data is its impact on the Federal Reserve.

Delayed Rate Cuts: If the Fed believes the labor market is strong based on faulty data, they will keep interest rates higher for longer (currently at 3.5–3.75%).
The "Coin Flip" March Meeting: Fed Governor Christopher Waller recently called a March rate cut a "coin flip," stating he needs to see more "good news." If that news is fake, the Fed is essentially "winging it."
The Hard Landing Risk: By the time the data accurately reflects the weakness, it may be too late to prevent a significant recession.

Final Thoughts

For investors and job seekers, the message is clear: Don't trust the headline. The labor market is likely much softer than the government reports suggest. While the stock market may enjoy the "strong" facade for now, the reality of a frozen labor market will eventually catch up.

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Mortgage Today (AM) – 02/24/26

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The “Phantom” Paychecks: Why Wall Street Thinks the 2026 Jobs Boom is a Statistical Illusion

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