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Mortgage Today (AM) - 08/31/26

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August 31, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 08/31/2026** Federal Reserve Chair Kevin Warsh's hawkish Jackson Hole speech has roiled mortgage markets, pushing traders to price in nearly a 60% probability of a September rate hike, but skeptical bond investors doubt the Fed will actually pull the trigger. Warsh emphasized that inflation remains sticky and that rates are the Fed's "predominant tool," yet he provided no forward guidance on whether officials will act next month. Markets digested competing signals: the 2-year Treasury fell 2 basis points while the 10-year climbed 3.5 basis points intraday, reflecting uncertainty about both near-term policy and long-term inflation. The real culprit driving uncertainty is Warsh himself—his communications style is less predictable than his predecessors, and he has flip-flopped market reactions three times in four months. Agency mortgage securities shed modest ground as bond weakness pressured valuations across the curve. Mortgage originators face a dangerous confluence of headwinds beyond rate volatility: home prices have fallen to five-year lows, single-family housing starts have collapsed to their second-lowest level since 2020, and fraud is accelerating in DSCR and investor-property segments. Repurchase claims are climbing as private mortgage insurance deficiencies dominate default outcomes, while occupancy and income fraud add further exposure. Falling home values are pushing more loans into PMI-required territory, expanding losses when defaults occur. Lenders obsessed with political "wins" are missing the real risk: underwriting quality, collateral deterioration, and sophisticated fraud schemes that could materially erode profitability. The employment report this Friday will be critical; nonfarm payroll growth is expected to rebound to 80,000, but that data alone won't resolve whether the economy is cooling gradually or heading toward sharper contraction. Mid-curve Treasury yields have climbed to multi-year highs as the market reprices term premium upward, reflecting weaker demand and dimmer growth expectations. The 30-year Treasury yield has spent 37 consecutive days above 5%, and rising 100- and 200-day moving averages signal a structural shift toward a higher-rate regime that is materially bearish for long-duration bonds and mortgage-backed securities. Oil prices surged nearly 4% on renewed Middle East hostilities, adding inflation complexity to the Fed's calculation in the weeks ahead. Consumer fundamentals are deteriorating: real disposable income has lagged spending for 25 consecutive months, and wage growth has slowed to just 0.5% year-over-year. That combination of elevated borrowing costs, stagnant incomes, and energy headwinds is beginning to constrain consumption and raise recession odds. The LDS Church is assembling one of America's largest and least transparent real estate empires, with plans to develop over 12,000-home master-planned communities near Denver and other major metros using 2.4 million acres worth more than $20 billion in assessed value. This represents a significant supply injection at a time when single-family housing production is already at historic lows, and the move underscores how institutional capital is repositioning around America's housing shortage. Commercial and residential properties owned through church subsidiaries generate substantial income streams while enjoying tax advantages unavailable to traditional homebuilders. For mortgage lenders, this signals another headwind: mega-scale developers operating outside conventional financing channels will capture disproportionate share of available development capital and borrower attention. Industry conferences are ramping up this week and next, with the PNMLC Annual Conference, Loan Vision Innovation Conference, and MBAMW Annual Conference all kicking off September 13–17 to discuss technology adoption, underwriting resilience, and growth strategies. Meanwhile, a senior mortgage banking executive with experience in builder channels and production leadership is seeking a role as Chief Production Officer or Head of Production at a lender with expansion ambitions. Employment remains mixed: Deephaven Mortgage is hiring wholesale account executives nationwide with non-QM and equity product access, while Homa Mortgage seeks loan officers in Texas, Florida, and California markets for AI-native, buyer-only brokerage operations. Talent acquisition remains competitive, and the industry is actively recruiting seasoned producers willing to retool for modern lending operations. STRATMOR Group research reveals a critical gap between borrower satisfaction scores and actual referral behavior: one lender doubled its referral rate from 11.5% in 2022 to 22.6% year-to-date in 2026 despite flat NPS scores. The key driver was not satisfaction measurement but behavioral activation—asking for referrals, staying connected post-close, and creating memorable experiences that convert satisfied borrowers into advocates. Lenders who merely track "likelihood to recommend" are leaving production on the table; the winners are replicating the specific behaviors that drive real referral volume. This insight matters because referral economics are increasingly critical when purchase pipelines are competitive and borrower acquisition costs are rising. **Locking vs Floating** Markets are signaling a defensive posture amid Warsh-driven volatility and sticky inflation expectations. Until the bond market confirms that the recent hawkish messaging is an overreaction, mortgage professionals should remain cautious on duration exposure and protective of lock positions. MBS pricing can help manage intraday risk, but the 10-year ceiling and floor levels provide better visibility into broader bond market momentum and term-premium trends that ultimately dictate mortgage rate floors. **Today's Events** No U.S. economic data is scheduled for today, though G20 finance ministers are meeting in North Carolina. The Dallas Fed will release manufacturing activity this afternoon. Tomorrow begins a heavier slate: S&P Global and ISM manufacturing PMI, construction spending, JOLTS job openings, and Dallas Fed services data are all due out. **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.47 | -0.19 | | 5.5 | 98.96 | -0.13 | | 6.0 | 101.08 | -0.06 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 96.82 | -0.22 | | 5.5 | 99.38 | -0.04 | | 6.0 | 101.39 | -0.01 | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.337 | 99.597 | -0.021 | | 3 yr | 4.4 | 99.584 | -0.011 | | 5 yr | 4.494 | 99.472 | 0.011 | | 7 yr | 4.611 | 99.34 | 0.018 | | 10 yr | 4.748 | 99.034 | 0.035 | | 30 yr | 5.244 | 98.213 | 0.039 |

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Mortgage Today (AM) - 08/26/26

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August 26, 2026

**WTMS Blog Today = What's up in Mortgage Today (AM) - 08/26/2026** PCE inflation data arrived slightly hotter than expected, triggering an immediate bond market selloff that pushed mortgage-backed securities down and the 10-year Treasury yield up 2.4 basis points to 4.65 percent. Headline PCE prices rose 0.2% monthly versus a 0.1% forecast, while core inflation came in exactly at expectations at 0.2% monthly and 3.3% annually. The market's negative reaction suggests traders had positioned for softer inflation, leaving little room for disappointment. UMBS 5.5 coupons slipped 0.17 points, and GNMA securities followed suit with comparable weakness. This morning's data reinforces the Fed's hawkish stance heading into September. Mortgage applications declined 1.0% last week as the 30-year fixed rate climbed to 6.78 percent—its highest level in three weeks. Refinancing activity dropped 2% week-over-week and 17% year-over-year, becoming the primary headwind on the application index. Purchase applications held relatively steady but remain 5% below year-ago levels, signaling that rising rates continue to pressure buyer demand. The roughly 20-basis point increase in mortgage rates over the past two months is beginning to squeeze the origination pipeline. Risk-averse loan officers should consider locking committed borrowers today. Durable goods orders jumped 1.1% in July, crushing economist expectations of 0.5% growth and signaling strength in equipment and machinery demand. Meanwhile, second-quarter gross domestic product confirmed at 1.5%, matching forecasts but marking a deceleration from 2.1% growth in the prior quarter. Personal spending rose 0.2% against a 0.1% estimate, while personal income surged 0.4% versus the 0.2% expectation. These mixed signals—strong orders balanced against moderating growth—create uncertainty for the Federal Reserve's next move. The Jackson Hole Symposium later this week may provide clarity on policy direction. New home sales collapsed 10.5% month-over-month in July to a 607,000 annualized pace, pushing inventory higher and stoking fears of price pressure ahead. Consumer confidence fell to its lowest level of 2026, even as the Case-Shiller home price index rose 2.1% year-over-year. The FHFA index, meanwhile, held flat, suggesting demand is cooling faster than valuations. This divergence points to an increasingly bifurcated housing market where some borrowers face affordability stress while others maintain equity cushions. Lenders focusing on recapture strategies through home equity lines and seconds are well-positioned for the current environment. Oil prices extended their weekly decline, falling 2.2% to $80.58 per barrel as Iran and Oman work toward a deal to resume shipping through the Strait of Hormuz. This easing of geopolitical risk has temporarily calmed inflation fears, though energy remains a wild card for Treasury markets. The week's $70 billion 5-year note auction closes today, and the results could signal whether demand for intermediate duration bonds is holding up. Crude oil inventories round out the afternoon calendar. Treasury buyback programs have provided support, but fundamental forces—deficits, issuance, and growth—continue pushing yields higher. Today's market action hinges on whether this morning's disappointment in PCE motivates additional selling or attracts value-hunting buyers near current levels. The 10-year yield must break below 4.62% to signal a genuine trend reversal; failure to do so keeps the ceiling intact. With Nvidia earnings looming after the close and the Fed symposium kicking off later this week, traders appear content to hold relatively flat positions. This uncertainty creates opportunities for disciplined originators to counsel risk-averse borrowers to lock. Market directional moves on war and fuel prices remain unpredictable. **Locking vs Floating** Today marks the first meaningful challenge to the uptrend since late July, with the potential to test bond market conviction. Risk-averse clients should use any intraday strength to lock in rates, while risk takers may wait for confirmation below the 4.62% yield floor before committing. The 20-basis point rise in mortgage rates over two months is already weighing on purchase demand, making immediate locks prudent for committed pipelines. **Today's Events** Core PCE (m/m) (Jul): 0.2% vs 0.2% forecast, 0.1% prior Core PCE (y/y) (Jul): 3.3% vs 3.3% forecast, 3.3% prior Durable Goods (Jul): 1.1% vs 0.5% forecast, 0.3% prior GDP Q2: 1.5% vs 1.5% forecast, 2.1% prior PCE (y/y) (Jul): 3.7% vs 3.6% forecast, 3.7% prior PCE Prices (m/m) (Jul): 0.2% vs 0.1% forecast, -0.1% prior **Bond Pricing** **UMBS 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 97.07 | -0.27 | | 5.5 | 99.45 | -0.22 | | 6.0 | 101.47 | -0.15 | **GNMA 30 yr** | Coupon | Price | Intra-Day Change | | 5.0 | 97.39 | -0.26 | | 5.5 | 99.73 | -0.13 | | 6.0 | 101.53 | -0.15 | **Treasuries** | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 4.224 | 99.812 | 0.050 | | 3 yr | 4.285 | 99.903 | 0.044 | | 5 yr | 4.382 | 99.969 | 0.053 | | 7 yr | 4.505 | 99.226 | 0.042 | | 10 yr | 4.663 | 99.696 | 0.034 | | 30 yr | 5.186 | 99.080 | 0.019 |

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Mortgage Today (PM) - 08/25/26

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August 25, 2026

**WTMS Blog Today = What's up in Mortgage Today (PM) - 08/25/2026** Bond markets rallied sharply today on hopes of a peace deal in the Iran conflict, with mortgage-backed securities and Treasury yields both posting significant gains. The 10-year yield dropped 6.5 basis points to 4.632% by day's end, while UMBS 5.5 coupons climbed 42 basis points to 99.69. Oil prices fell alongside bond yields, a sign that geopolitical tension eased enough to ease inflation concerns. However, analysts warn this volatility remains driven primarily by war headlines and fuel costs rather than fundamental economic shifts. The rally should not overshadow the uncertainty ahead for mortgage originators. Home price data released today showed mixed signals that could shape lock-and-float decisions going forward. The Case-Shiller 20-city index climbed 2.1% year-over-year, topping forecasts of 1.7%, while monthly momentum slowed to just 0.4%. FHFA home prices rose 2.3% annually but showed zero monthly change, disappointing the 0.2% monthly gain investors expected. These data suggest that while housing markets remain sticky on an annual basis, near-term price pressures are cooling. For mortgage sellers, slower price growth could translate to reduced equity accessibility and softer purchase demand in coming months. Secretary Bessent's Treasury bond buyback plan continues to provide a "put" under longer-dated Treasuries, compressing swap spreads to their tightest since February. The 30-year swap spread narrowed to record lows as traders recognize the government now has a permanent buyer at the long end of the curve. Benchmark Treasury yields have drifted lower despite the plan's initial controversy, suggesting markets are crediting the intervention with some effectiveness. Positioning data shows bullish tilts in long-bond options, with call volume surging relative to puts on long-maturity Treasury futures. This dynamic means any rally could attract fresh selling, but any sell-off may encounter institutional support. A federal court ruled that a RESPA referral case against Veterans United Home Loans can proceed to discovery, putting referral compensation models industry-wide on notice. The judge declined to grant the lender's motion to dismiss the core claim that a 35% real estate commission split improperly rewarded agents for keeping borrowers with Veterans United. While the ruling is not a finding of guilt, it signals that courts will scrutinize whether compensation paid for legitimate services or for steering borrowers. This case means mortgage originators must review their own referral arrangements with real estate partners, title companies, and appraisers to ensure they satisfy RESPA's brokerage safe harbor. Ambiguity between referral fees and kickbacks remains a significant compliance risk industry-wide. GNMA securities outperformed UMBS slightly on the day, with the 6.0 coupon up 25 basis points to 101.68 versus UMBS 6.0 up 30 basis points to 101.62. Lower coupons showed similar relative strength, with GNMA 5.0 gaining 52 basis points compared to UMBS 5.0 up 47 basis points. The narrowing differential reflects typical patterns when risk-off sentiment drives flight-to-quality demand. Two-year Treasuries fell 5.8 basis points to 4.172%, while the 30-year dropped 7.0 basis points to 5.156%, indicating a modest flattening across the curve. These moves support the view that today's rally was driven by geopolitical relief rather than economic weakness expectations. **Locking vs Floating** Market technicians identified today as the first meaningful test of the prevailing downtrend that began in late July, with the 4.62% level serving as a key pivot point. Risk-takers typically monitor such moments for evidence of follow-through; a break below 4.62% would signal stronger conviction in the rally. Risk-averse borrowers should treat days like this as tactical opportunities to lock, securing rates before momentum potentially reverses. However, both lock and float decisions remain heavily dependent on daily headlines involving military conflict and oil prices rather than economic fundamentals. Support and resistance levels in the 10-year sit at 4.54%, 4.42%, 4.71%, and 4.80%, providing markers for technical traders. **Today's Events** Case Shiller Home Prices-20 y/y (Jun): 2.1% vs 1.7% forecast, 1.6% previous CaseShiller 20 mm nsa (Jun): 0.4% vs forecast not provided, 0.9% previous FHFA Home Price Index m/m (Jun): 0.0% vs 0.2% forecast, 0.3% previous FHFA Home Prices y/y (Jun): 2.3% vs forecast not provided, 2.2% previous **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 | 4.178 | 100.136 | -0.058 | | 3 yr | 4.241 | 100.025 | -0.062 | | 5 yr | 4.332 | 100.193 | -0.072 | | 7 yr | 4.463 | 99.475 | -0.072 | | 10 yr | 4.630 | 99.963 | -0.068 | | 30 yr | 5.167 | 99.369 | -0.058 | Market Data

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