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Mortgage Today (AM) - 03/31/26

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March 31, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 03/31/2026 Bonds are rallying despite surging oil prices as markets shift focus from inflation fears to growth concerns amid the ongoing Middle East conflict. Treasury yields dropped across the curve Monday with the 10-year falling to 4.33% from last week's eight-month high of 4.48%, while UMBS prices gained ground with most coupons showing solid improvements. The tug-of-war between stagflation risks has markets oscillating between worrying about higher prices from oil disruptions versus slower economic growth from geopolitical instability. Traders are now betting the Fed will hold rates steady in the 3.5% to 3.75% range this year with only a small chance of cuts by mid-2027. This marks a notable shift from earlier positioning when Iran's near-total blockade of the Strait of Hormuz first sent crude soaring nearly 50%. UMBS securities showed resilient performance with the 5.0 coupon gaining 24 basis points to 98.48, while the liquid 5.5s advanced 17 basis points to 100.37. GNMA bonds also participated in the rally with similar coupon performance, though gains were slightly more modest than their UMBS counterparts. The mortgage-backed securities market appears to be benefiting from the broader Treasury rally as duration risk concerns ease with falling yields. Current dollar prices suggest origination margins remain under pressure but are stabilizing from recent lows. The spread relationships between coupons continue to normalize as rate volatility moderates. European inflation data added another layer to the global monetary policy puzzle with eurozone CPI rising to 2.5% in March, faster than February's pace but below analyst expectations. This acceleration, driven primarily by energy costs from the Iran conflict, reinforces expectations for ECB rate hikes with markets pricing three quarter-point increases this year. The inflation surge represents the steepest jump since 2022 and highlights how geopolitical tensions are reshaping central bank calculus worldwide. German 10-year yields fell despite the hotter inflation print, mirroring U.S. Treasury performance as growth fears override price pressures. UK bonds followed suit with 10-year gilts dropping to 4.92% as the Bank of England faces similar stagflation trade-offs. President Trump's signals about potentially ending the U.S. military campaign against Iran provided some relief to energy markets, though the Strait of Hormuz remains largely closed. Wall Street Journal reports suggest Trump told aides the U.S. should achieve its main goals of weakening Iran's naval capabilities while pursuing diplomatic pressure to restore trade flows. Iranian drone strikes on Kuwaiti oil tankers off Dubai underscore continuing dangers despite talks of de-escalation. Brent crude wavered around $108 per barrel as traders weighed ceasefire prospects against ongoing supply disruptions. Trump's April 6 deadline for reopening the strait continues to loom over market sentiment. The mortgage origination landscape faces headwinds from elevated borrowing costs even as bonds show signs of stabilization. With the 10-year Treasury still 40+ basis points higher since the conflict began, purchase applications remain under pressure while refinance activity stays dormant. Loan officers report continued margin compression as competition intensifies for scarce volume, particularly in the jumbo market where rates have pushed many borrowers to the sidelines. The MBA Secondary & Capital Markets Conference in May will provide crucial insights into how lenders are adapting to this challenging environment. Industry participants are watching closely for any Fed pivot that might provide relief to mortgage demand. Today's Treasury performance suggests investors are beginning to price in economic slowdown risks over pure inflation concerns, but one day's move doesn't establish a trend. The bond market remains caught between competing forces of energy-driven price pressures and growth-dampening geopolitical uncertainty. Fed officials including Vice Chair Bowman and Governor Barr speak later today and may provide guidance on how policymakers view these crosscurrents. Economic data including the Chicago PMI and consumer confidence could offer early glimpses into March sentiment before Friday's crucial payroll report. For mortgage professionals, the key remains whether this nascent bond rally can sustain itself long enough to meaningfully improve funding costs and borrower demand. Locking vs Floating Despite yesterday's fairly significant bond rally, we remain just one day removed from the weakest closing levels in months, making it premature to conclude that rising rate pressure has run its course. MBS prices provide helpful guidance for intraday risk management, but monitoring 10-year Treasury yield ceilings and floors offers better insight into broader bond market momentum shifts. Until we see more than a day or two of sustained recovery, the prudent approach remains cautious given how quickly sentiment can reverse in this volatile environment. 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 | 98.48 | 0.24 | | 5.5 | 100.37 | 0.17 | | 6.0 | 101.93 | 0.14 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.9 | 0.17 | | 5.5 | 100.49 | 0.1 | | 6.0 | 101.72 | 0.11 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.802 | 99.423 | -0.028 | | 3 yr | 3.821 | 99.1 | -0.034 | | 5 yr | 3.947 | 99.115 | -0.039 | | 7 yr | 4.132 | 99.205 | -0.035 | | 10 yr | 4.317 | 97.447 | -0.035 | | 30 yr | 4.892 | 95.827 | -0.023 | Subscribe free at WellThatMakesSense.com for daily market insights that help you navigate the mortgage landscape.

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Mortgage Today (PM) - 03/30/26

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March 30, 2026

# WTMS Blog Today = What's up in Mortgage Today (PM) - 03/30/2026 CrossCountry Mortgage snatched victory from United Wholesale Mortgage in the Two Harbors bidding war, agreeing to pay $10.80 per share in cash for a deal valued at roughly $1.13 billion. The wholesale giant called CCM's successful bid "ego-driven" and hinted at potential legal action, claiming their stock offer was superior and promising the "full context will be made public in due course." CCM will also cover the $25.4 million termination fee owed to UWM after Two Harbors walked away from their original merger agreement. The acquisition adds Two Harbors' capital markets platform and RoundPoint's servicing infrastructure, potentially making CCM the eighth-largest U.S. mortgage servicer by owned portfolio. The transaction is expected to close in the second half of 2026. Bond markets rallied sharply today as traders shifted from betting on Fed rate hikes to pricing in potential cuts, driven by growing concerns about the economic impact of the Iran war. Fed Chair Jerome Powell's comments that the central bank has little control over supply shocks like oil price surges helped ease fears about forced monetary tightening. The 10-year Treasury yield dropped 8.4 basis points to 4.35% while UMBS securities gained 11 ticks, though both retreated from their earlier highs. Traders are increasingly focused on potential growth risks from the Middle East conflict rather than just its inflationary impulse. The war has now entered its fifth week with oil prices hovering over $110 a barrel and little sign of resolution. NEXA Lending launched a new "servicing-aligned income" program that could give loan originators recurring compensation tied to loan performance, breaking from the traditional model where LOs watch others collect long-term servicing value. The brokerage is building what it calls a compliant framework for LOs to earn income beyond closing, tapping into retention, repeat business, and borrower relationship ownership. This development comes as the industry faces growing scrutiny over compensation amid shrinking margins and intensifying competitive pressures. The move signals a potential shift toward monetizing originator relationships at scale. If successful, NEXA's model could trigger broader competitive responses across the industry. Housing market imbalances reached record levels with sellers now outnumbering buyers by 46% nationally, creating a gap of 630,000 according to Redfin data going back to 2013. Affordability challenges are keeping buyers on the sidelines as mortgage rates climbed to their highest levels since October and application volume dropped 10.5% last week. Canceled contracts hit a record 13.7% of homes under contract in February, reflecting buyer hesitation. Sun Belt cities that overbuilt during the pandemic boom show the worst imbalances, with Miami leading at 163% more sellers than buyers. Nashville, Austin, West Palm Beach, and San Antonio round out the top five most imbalanced markets. Private credit funds face growing exposure to the software sector, with many putting up gates that restrict investor withdrawals due to illiquid underlying investments. Wall Street Journal research found these funds are massaging sector definitions to minimize perceived exposure to SaaS companies whose valuations have been crushed by AI disruption fears. The risk extends to the mortgage industry through non-QM lending, as some ultimate buyers of non-QM paper have software exposure. Credit problems typically spread, and non-QM's proximity means it would likely be impacted by software sector stress. Any impact on conventional lending would be minimal and could potentially be positive. Better Home & Finance appointed former Fannie Mae CEO Hugh Frater to its board of directors as the company positions for its next phase of AI-driven growth and capital markets expansion. Meanwhile, more than half of all active listings nationwide remained on the market for over two months in February, marking the highest percentage of "stale" listings since 2019 at 52.2%. LoanDepot expanded its partnership-driven origination strategy with a new joint venture alongside Texas homebuilder Betenbough Companies, targeting purchase borrowers in West Texas. A Florida appellate court ruled that creditors cannot force homeowners to draw from unused reverse mortgage credit lines to satisfy debts, establishing new legal clarity for HECM products. Locking vs Floating Despite today's fairly big bond rally, MBS Live cautions that we're still just one day away from the weakest closing levels in months. It will take more than a day or two of apparent recovery before concluding that rising rate pressure has run its course. MBS gained ground throughout the day but gave back some gains from morning highs, creating potential reprice risk for lenders who improved rates earlier. Those who repriced during the AM highs (11:15-1:15 ET) face the highest risk of negative reprices if volatility continues. Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.24 | 0.37 | | 5.5 | 100.2 | 0.33 | | 6.0 | 101.78 | 0.21 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.73 | 0.29 | | 5.5 | 100.39 | 0.24 | | 6.0 | 101.61 | 0.2 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.83 | 99.37 | -0.084 | | 3 yr | 3.854 | 99.005 | -0.085 | | 5 yr | 3.986 | 98.94 | -0.083 | | 7 yr | 4.167 | 98.996 | -0.088 | | 10 yr | 4.352 | 97.173 | -0.077 | | 30 yr | 4.915 | 95.479 | -0.05 |

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Mortgage Today (AM) - 03/30/26

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March 30, 2026

WTMS Blog Today = What's up in Mortgage Today (AM) - 03/30/2026 Mortgage-backed securities rallied Monday morning despite oil prices holding above $100 per barrel and ongoing Middle East tensions, with UMBS 5.0 coupons gaining 3/8ths and 10-year Treasury yields dropping 7 basis points to 4.36 percent. Three factors likely drove the gains: a correction in Fed Funds Futures that began Friday, pre-weekend defensive positioning unwinding without major escalation over the weekend, and month-end rebalancing flows creating technical demand. Consumer sentiment data released this morning showed the University of Michigan index falling to 53.3 in March from 56.6 previously, missing the 54.0 forecast and hitting the lowest level since December 2025. One-year inflation expectations jumped to 3.8 percent from 3.4 percent, reflecting consumer anxiety over rising gas prices and falling stock portfolios, while five-year expectations held steady at 3.2 percent. Two Harbors Investment Corp terminated its merger agreement with UWM Holdings and will instead be acquired by CrossCountry Mortgage for $10.80 per share in all-cash, valuing the transaction at approximately $1.13 billion. CrossCountry will absorb the $25.4 million termination fee owed to UWM, adding Two Harbors' capital markets platform and RoundPoint's servicing infrastructure to potentially become the eighth-largest mortgage servicer by owned portfolio. UWM issued a sharp rebuke calling the decision ego-driven and suggesting its stock-based offer carried superior value, hinting that legal challenges may follow with the full context to be "made public in due course." The deal is expected to close in the second half of 2026, pending regulatory approvals and closing conditions. The USDA announced its Rural Housing Modernization Initiative, granting qualified lenders delegated authority to approve and close guaranteed rural housing loans without waiting for agency sign-off, aligning the program with HUD and VA processes. A final rule published March 19 will take effect June 17, 2026, with full implementation on September 28, 2028, while a pilot program called LITE (Lender Interactive Test Environment) launches September 1, 2026 for eligible lenders. The agency also launched My RD Loan Portal, giving direct loan borrowers 24/7 self-service access to account information and payment capabilities. Eligibility standards, funding levels, and program safeguards remain unchanged—this is strictly a service delivery overhaul aimed at reducing delays and unnecessary back-and-forth. The USDA share of total mortgage applications remains below 1 percent nationally but carries significant weight in qualifying rural markets. The housing market's seller-buyer imbalance has widened to a record 630,000 homes, with 46 percent more sellers than buyers according to Redfin data stretching back to 2013. Affordability constraints are sidelining buyers as mortgage rates climbed to their highest levels since October, mortgage application volume dropped 10.5 percent last week, and canceled contracts hit a record 13.7 percent of homes under contract in February. Sun Belt cities that overbuilt during the pandemic boom face the worst imbalances, with Miami leading at sellers outnumbering buyers by 163 percent, followed by Nashville, Austin, West Palm Beach, and San Antonio. The gap has grown 30 percent from a year ago, and buyers have technically held the numerical advantage since May 2024 reversed. This mismatch is creating downward price pressure in oversupplied markets while tighter inventory markets continue to see modest appreciation. CoStar Group amended its copyright infringement lawsuit against Zillow, now claiming the company has infringed on more than 53,000 watermarked photos across Zillow and syndicated platforms including Redfin and Realtor.com. The original complaint filed in July 2025 identified nearly 47,000 CoStar-owned images, and CoStar alleges Zillow continued displaying approximately 8,000 of those specific images as of late September and has since infringed on thousands more. CoStar's general counsel stated that Zillow re-published many of the same photographs after initially claiming to remove them, suggesting the company is deliberately using CoStar's images to build listing pages, train algorithms like the Zestimate, and attract property owners to paid advertising services. Zillow called the amended complaint further proof of weaknesses in CoStar's arguments and accused CoStar of leveraging litigation rather than competing on product quality. The case represents what CoStar claims is one of the largest real estate image infringement disputes in history. The Federal Reserve continues its passive runoff of agency mortgage-backed securities holdings, now at $2.7 trillion after a 26 percent reduction since 2022, but at current pace it could take over a decade to return to an all-Treasury balance sheet. The portfolio remains heavily concentrated in low-coupon 30-year MBS, meaning any active sales—though unlikely—would disproportionately pressure those segments. The feared risk of rapid prepayments flooding the market has diminished as rising Treasury yields pushed mortgage rates higher and sharply reduced refinancing activity, with the refinance share of mortgage activity falling to 49.6 percent last week from 52.3 percent previously. The adjustable-rate mortgage share is running around 8 percent of applications, while FHA accounts for roughly 20 percent, VA about 16 percent, and USDA less than 1 percent. Product mix remains stable despite the volatility in underlying rate markets, with originators maintaining defensive postures until bond market momentum shows a definitive shift requiring more than one or two days of improvement. Locking vs Floating MBS Live advises maintaining a defensive floating strategy despite Monday morning's gains, noting the recovery does not signal a definitive top in rates. While intraday improvements provided some relief after last week's climb to 2026 highs, the broader trend remains unfavorable until momentum shifts convincingly. Market participants should watch 10-year yield ceiling and floor levels to track bigger-picture bond market momentum rather than reacting to single-day movements. Mixed blessings continue as rates pulled back from morning highs but remain elevated, requiring caution until a sustained reversal materializes over multiple sessions. Today's Events Consumer Sentiment (Mar): 53.3 vs 54.0 forecast, 56.6 prior Sentiment: 1-year Inflation (Mar): 3.8% vs 3.4% forecast, 3.4% prior Sentiment: 5-year Inflation (Mar): 3.2% vs 3.2% forecast, 3.3% prior Fed Chair Powell Speech: 10:30 AM ET Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.33 | 0.46 | | 5.5 | 100.19 | 0.32 | | 6.0 | 101.77 | 0.20 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 98.83 | 0.39 | | 5.5 | 100.39 | 0.24 | | 6.0 | 101.58 | 0.18 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.830 | 99.370 | -0.084 | | 3 yr | 3.852 | 99.011 | -0.089 | | 5 yr | 3.978 | 98.977 | -0.091 | | 7 yr | 4.163 | 99.019 | -0.092 | | 10 yr | 4.346 | 97.220 | -0.083 | | 30 yr | 4.911 | 95.541 | -0.060 | Market Data

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