WTMS Blog Today = What’s up in Mortgage Today (AM) – 01/05/2026

Bond markets are officially back in the office after an extended holiday hibernation, with trading volumes already surpassing full days from late December. The ten-year Treasury yield has slipped 2 basis points to 4.17%, breaking out of the sleepy 4.10-4.20 range that dominated the past three weeks. UMBS 5.0 coupons gained 8 basis points, signaling a modest improvement for mortgage pricing.

Weekend geopolitical developments in Venezuela have surprisingly failed to generate the traditional flight-to-quality trade. Markets appear more focused on domestic economic fundamentals than international tensions for now. The real test comes Friday with the December jobs report, which could finally push rates out of their sideways drift.

This morning’s ISM Manufacturing data painted a mixed picture of factory conditions. The main index fell to 47.9 versus expectations of 48.3, marking ten straight months below the 50 expansion threshold. Employment improved slightly to 44.9, while price pressures remained elevated at 58.5, suggesting inflationary forces persist despite weakening demand.

Mortgage rates closed 2025 at their lowest levels since the beginning of last year. Freddie Mac reported the 30-year fixed rate at 6.15%, down from 6.18% the prior week and well below the 6.91% reading from a year earlier. The 15-year rate also declined to 5.44%, offering borrowers some relief heading into 2026.

Locking vs Floating

Bond markets are transitioning out of holiday mode, creating potential for wider volatility ranges in the coming days. Wednesday’s JOLTS and ISM Services data could provide additional market direction before Friday’s critical jobs report. Current technical levels suggest rates could break either direction, making timing crucial for floating positions.

Today’s Events

– ISM Manufacturing PMI (Dec): 47.9 vs 48.3 forecast, 48.2 previous
– ISM Manufacturing Employment (Dec): 44.9 vs 44.0 previous
– ISM Manufacturing Prices Paid (Dec): 58.5 vs 59.0 forecast, 58.5 previous

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.75 | 0.08 |
| 5.5 | 101.44 | 0.08 |
| 6.0 | 102.69 | 0 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.78 | 0.11 |
| 5.5 | 101.04 | 0.07 |
| 6.0 | 101.98 | 0.04 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.461 | 100.075 | -0.014 |
| 3 yr | 3.528 | 99.922 | -0.018 |
| 5 yr | 3.715 | 99.591 | -0.031 |
| 7 yr | 3.93 | 98.905 | -0.032 |
| 10 yr | 4.171 | 98.613 | -0.02 |
| 30 yr | 4.859 | 96.319 | -0.012 |