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Mortgage Today (AM) - 09/30/26

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September 30, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 09/30/2026** Mortgage applications plummeted 6 percent in the week ending September 25, with refinancing down a staggering 56 percent year-over-year as rates climbed to three-year highs. Purchase applications declined 4 percent seasonally adjusted and 14 percent annually, signaling that borrowers are stepping back from the market entirely. The pullback reflects the brutal impact of elevated borrowing costs, which have now pushed long-term yields to levels unseen since 2002. Yesterday's 10-year Treasury closed at 5.26 percent, and the 30-year hit 5.62 percent as the bond market sold off despite weaker economic data. MBS securities lost roughly 25 basis points in the move. This morning brought a mixed inflation picture that sparked a modest intraday relief rally. The August Core PCE price index came in cooler than expected at 0.2 percent month-over-month (versus 0.3 percent forecast) and 3.0 percent year-over-year (versus 3.3 percent forecast). Personal spending rose 0.6 percent inflation-adjusted in August, marking the fastest pace in over a year, while ADP employment climbed 90,000 jobs—beating the 70,000 forecast. Q2 GDP printed at 2.2 percent, topping the 1.5 percent estimate, which suggests the economy remains resilient despite mortgage headwinds. By mid-morning, the 10-year Treasury had pulled back three basis points to 5.20 percent and UMBS securities posted modest intraday gains. Fed officials struck a cautious tone overnight, with President Williams stating there is no urgency for additional rate hikes after September's move and that policymakers should gather more information. Governor Barr emphasized recalibrating policy to balance employment and inflation risks while returning inflation to 2 percent in a timely manner. The message sent traders into bond-buying mode early in the session, though analysts warned that the relief could prove temporary. Without clear evidence of economic deterioration or a meaningful shift in the Fed's inflation outlook, dip-buying has lacked sustained conviction. The market remains technically oversold and awaiting more concrete catalysts from Wednesday's PCE data and Friday's official payrolls report. The capital markets are struggling with a fundamental disconnect: economic data shows resilience, yet the bond market keeps selling off long-dated maturities. Heavy corporate issuance is hitting the tape, with jumbo tranches scheduled for pricing today that will add supply pressure. Convexity hedging, positioning concerns, and persistent worries over federal borrowing and inflation have dominated the long end of the curve. The 2-year-to-10-year curve steepened to 37 basis points yesterday, a move that underscores yield volatility. Originators and lenders are now operating in an environment where mortgage rates have disconnected from near-term Fed policy and are instead driven by structural forces in the Treasury market. Mortgage professionals face a critical decision window in October. Lock-float recommendations from market analysts suggest waiting until bonds demonstrate a stronger desire to rally without that rally being purely a reaction to heavy selling pressure. The economic calendar remains crowded with potential volatility triggers, and borrowers who held off in September are unlikely to re-enter the market quickly at current rate levels. Portfolio lenders and warehouse lines are under pressure as refi demand evaporates and purchase applications decline. For originators, the focus must shift from volume preservation to pricing discipline and cultivating relationships with existing clients who might refinance in a lower-rate environment. **Locking vs Floating** The data backdrop supports a wait-and-see posture on rate locks. While inflation showed modest improvement this morning, the bond market's broader trajectory remains firmly upward on yield, driven by supply and structural factors beyond the Fed's near-term control. Only concrete signs of economic weakness or a meaningful repricing of inflation risk would justify an aggressive pivot to locking. Borrowers and originators should monitor Friday's employment report closely, as a significant miss to the downside could finally break the bond selloff momentum. **Today's Events** ADP Employment Change (8:15 AM): +90K vs. +70K forecast, +38K previous Core PCE (month-over-month, August): +0.2% vs. +0.3% forecast, +0.2% previous Core PCE (year-over-year, August): +3.0% vs. +3.3% forecast, +3.3% previous PCE Price Index (month-over-month, August): +0.3% vs. +0.4% forecast PCE Price Index (year-over-year, August): +3.4% vs. +3.7% forecast Q2 GDP (third estimate): +2.2% vs. +1.5% forecast, +2.1% previous Q2 Final Sales: +2.8% vs. +2.2% forecast Q2 Corporate Profits: +7.7% vs. +8.2% forecast Chicago PMI (September): Pending, 9:45 AM EDT Fed Speakers: Governor Cook (3:25 PM), Chicago Fed President Goolsbee (5:10 PM), Minneapolis Fed President Kashkari (later in day) **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 | | 2 yr | 4.84 | 99.83 | -0.036 | | 3 yr | 4.939 | 98.446 | -0.039 | | 5 yr | 5.025 | 99.891 | -0.025 | | 7 yr | 5.129 | 99.25 | -0.014 | | 10 yr | 5.233 | 95.316 | -0.012 |

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Mortgage Today (PM) - 09/29/26

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September 29, 2026

**WTMS Blog Today = What's up in Mortgage Today (PM) - 09/29/2026** Mortgage-backed securities (UMBS) experienced a volatile intraday swing today, dropping nearly half a point before recovering moderately after Federal Reserve Governor Williams signaled no urgency for additional rate hikes. The 10-year Treasury yield crested at 5.29%—touching a critical technical level not seen since 2007—before reversing course in afternoon trading. MBS prices ended the day down roughly 0.01 to 0.03 points depending on coupon, but well off their weakest levels. Markets responded sharply to Williams' dovish comments, with Fed Funds Futures rallying and the entire yield curve (except 30-year bonds) returning to positive territory by close. This volatility underscores the sensitivity of mortgage securities to Fed messaging as quarter-end trading dynamics persist. Economic data released today painted a mixed picture that provided little directional momentum until Fed commentary intervened. Case Shiller home prices rose 2.5% year-over-year (beating the 2.2% forecast), while the FHFA monthly index climbed 0.3% (above the 0.1% expectation). However, consumer confidence slumped to 81.9, well below the 89.2 forecast, and job openings fell to 7.079 million from 7.271 million previously. The weakness in confidence and employment metrics suggests underlying economic softness that could eventually support bond rallies, though today's data alone triggered only modest price responses. Lenders reported negative repricing risk approaching 0.25 points by mid-afternoon as MBS weakness mounted. The morning session proved brutal, with heavy selling between 9:30 a.m. and 10:00 a.m. that pushed MBS down over an eighth of a point despite falling oil prices offering no support. Bearish momentum combined with quarter-end portfolio adjustments (correlating with stock market weakness) appeared to be the primary driver rather than specific economic or policy catalysts. By 10:05 a.m., the 10-year yield had risen 1.1 basis points to 5.25%, and MBS losses accelerated through early afternoon. The lack of any fundamental justification for the selling—particularly with oil prices declining—suggests technical forces and repositioning dominated price action. Williams' 2:00 p.m. statement that he sees no need for urgency following September's rate hike proved to be the session's turning point, effectively halting the bleeding in fixed-income markets. His comments carried extra weight given his status among Fed speakers and represented a notably more dovish tone than recent messaging from other officials. The short end of the yield curve responded particularly well, with the 2-year yield declining 5.3 basis points, while the 10-year finished just 0.3 basis points higher at 5.236%. By day's close, MBS had recovered roughly three-eighths of a point from their lows, though many lenders remained at risk of additional negative reprices depending on their rate sheet timing. **Locking vs Floating** Originators should continue holding the lock/float stance unchanged from Monday, waiting for bonds to demonstrate genuine rally strength that is not merely a rebound from heavy selling. If upcoming economic data comes in weak and bonds recover sustainably, mortgage rates could see substantial relief; conversely, stronger data would likely add to recent upward momentum. The risk/reward at current levels remains unfavorable for aggressively floating, given the proximity to 2007 technical resistance and persistent quarter-end volatility. **Today's Events** | Event | Actual | Forecast | Previous | |---|---|---|---| | Case Shiller Home Prices-20 y/y (Jul) | 2.5% | 2.2% | 2.1% | | FHFA Home Price Index m/m (Jul) | 0.3% | 0.1% | 0% | | CB Consumer Confidence (Sep) | 81.9 | 89.2 | 89.4 | | USA JOLTS Job Openings (Aug) | 7.079M | 7.23M | 7.271M | **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.5 | 95.53 | -0.04 | | 6.0 | 98.19 | -0.02 | | 5.5 | 95.65 | -0.16 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.874 | 99.766 | -0.053 | | 3 yr | 4.978 | 98.34 | -0.031 | | 5 yr | 5.05 | 99.781 | -0.019 | | 7 yr | 5.142 | 99.172 | -0.007 | | 10 yr | 5.245 | 95.226 | 0.011 | | 30 yr | 5.569 | 93.566 | 0.02 | Market Data

Mortgage Today (AM) - 09/29/26

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September 29, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 09/29/2026** Oil prices are easing and Treasury yields are retreating slightly, giving mortgage professionals a moment of relief after a brutal week of selling pressure. The 10-year yield dropped to 5.213 percent this morning, down 2.2 basis points from yesterday's close of 5.237 percent, as Saudi Arabia resumed flows through a critical pipeline. UMBS securities are holding steady with modest gains, while the broader bond market awaits critical economic data later today. Energy-driven inflation remains the primary headwind, but weakening oil suggests markets may finally be catching a breather. This intraday relief could matter for lock-and-float decisions, but the bigger question is whether this bounce has legs or fizzles out by Friday's jobs report. UMBS 30-year coupons posted minimal overnight movement, with the 6.0 coupon at 98.24, up just 0.04 points from yesterday. The 5.5 coupon printed at 95.59, up 0.03, while the 6.5 coupon remained nearly flat at 100.68 with only a 0.02 point increase. GNMA securities performed slightly better, particularly in the 5.5 coupon, which gained 0.08 points to 95.89 compared to UMBS weakness. These modest gains reflect cautious positioning ahead of a data-heavy Tuesday that includes the FHFA Housing Price Index, Case-Shiller Home Prices, and Consumer Confidence at 10 a.m. The market is essentially holding its breath, waiting to see if economic momentum confirms the case for higher-for-longer rates or if cracks finally appear in consumer spending. The credit score battle intensified when Rocket Mortgage announced it will default to VantageScore 4.0 for all GSE-eligible loans starting in the fourth quarter of 2026. After testing 1.4 million credit reports over four months, Rocket found that VantageScore helped more clients qualify and saved borrowers an average of $1,600 at closing. However, this move raises serious operational questions for the broader industry: verification infrastructure must be ready before investor infrastructure can catch up, and smaller lenders dependent on correspondent aggregators may lack the direct GSE delivery capabilities of Rocket or UWM. The concern isn't just competition—it's equity across lender channels. Without widespread correspondent investor participation, VantageScore expansion could widen the competitive moat for large direct lenders rather than democratizing access as regulators intended. The Iran conflict remains a central driver of bond market movement, with geopolitical tensions keeping energy inflation at the forefront of Fed policy discussions. Investors increasingly view elevated oil and diesel prices as sustained inflation risks rather than temporary volatility, knowing that transportation costs will eventually filter into food and core goods. The Treasury selloff reflects a market convinced the U.S. economy remains resilient: 10-year break-even inflation sits at 2.35 percent, suggesting confidence in the Fed's inflation-fighting ability. Yet the paradox is sharp—stronger economic data means higher rates, while weaker data could trigger a sharp rally if markets begin pricing in demand destruction from elevated borrowing costs. For mortgage professionals, this catch-22 makes floating riskier but waiting potentially costlier. Employment transitions across the mortgage sector continue, with Informative Research announcing that Tim Cox has returned as executive vice president of business process automation. Cox brings over two decades of mortgage technology and operational strategy experience from previous roles at IR and most recently at Xactus, where he led AI enablement and operational scalability initiatives. Meanwhile, the HELOC market remains volatile and demand-sensitive: home equity nationwide sits at $34.9 trillion with HELOC balances up for 17 straight quarters, yet pipeline activity swings sharply with every rate move. Lenders responding to this volatility are shifting toward fully automated fulfillment where possible, expert-managed where necessary, and flexible capacity that adapts to rate environment changes. The trend signals that mortgage professionals who can operationalize rapid scaling will win regardless of whether rates spike or stabilize. A crowded Tuesday economic calendar will test market resolve as the day unfolds with FHFA Housing Price Index, Case-Shiller data, Consumer Confidence, August JOLTS, and remarks from Fed Governors Bowman, Barr, and Waller all hitting between 9 a.m. and afternoon sessions. This concentration of data and Fed speak creates genuine risk for intraday whipsaws, making tactical decisions harder than strategic ones. Month-end passive rebalancing flows will overlap with data reactions, potentially exaggerating moves in either direction. The November Presidential election year backdrop adds policy uncertainty to every economic release, particularly around inflation and employment data. Professional mortgage originators should expect volatility and avoid anchoring decisions to this morning's brief Treasury relief. **Locking vs Floating** Wait for confirmation of a genuine bond market rally before adjusting lock-and-float positioning. Market participants continue recommending caution until economic data or Fed guidance provides clearer directional conviction. A strong economic report would likely add to rate pressure, while weak employment data could unlock a substantial mortgage rate rally if combined with bond market recovery. The issue remains asymmetric: data could accelerate either direction, making early positioning bets risky. **Today's Events** FHFA Housing Price Index (July) S&P Case-Shiller Home Price Index (July) Conference Board Consumer Confidence (September) August JOLTS Job Openings Federal Reserve speakers: Governor Michelle Bowman, Governor Austan Barr, Governor Christopher Waller **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.5 | 95.59 | 0.03 | | 6.0 | 98.24 | 0.04 | | 5.5 | 95.89 | 0.08 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change |

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