WTMS Blog Today = What’s up in Mortgage Today (AM) – 01/14/2026
US stock futures point to the first back-to-back losses of 2026 as Iran tensions escalate and markets prepare for Trump’s response to ongoing protests. Meanwhile, mortgage bonds are rallying as geopolitical uncertainty drives safe-haven demand. This flight-to-quality is providing some relief to mortgage pricing after yesterday’s volatility.
Mortgage applications surged 29% last week according to the MBA, with refinances jumping 40% and purchases rising 18%. The 30-year fixed rate dropped to 6.18% following the announcement of increased MBS purchases by the GSEs. Borrowers with larger loan balances proved especially rate-sensitive, driving the average refinance application size higher.
Producer Price Index data came in mixed this morning, with November wholesale inflation rising 0.2% monthly but core PPI remaining flat at 0.0% versus the 0.2% forecast. The annual PPI reached 3.0%, the highest since July, though much of this was due to upward revisions to previous months. Retail sales also exceeded expectations, rising 0.6% monthly and 3.5% annually.
FHA severe delinquencies continue surging to 4.7%, more than four times pre-pandemic levels and now the primary driver of distress in Ginnie Mae pools. This trend is creating potential opportunities for investors in lower-coupon FHA bonds as 2022-vintage borrowers emerge as the most at-risk. The disparity with VA delinquencies highlights the impact of FHA’s lower average credit scores and recent policy changes.
New home sales strengthened to a 737,000 annual pace in October, the strongest of the year as builders offered more incentives. However, inventory remains elevated at 7.9 months’ supply and median home prices fell 8% year-over-year to $392,300. This price decline indicates a shift toward starter homes and away from luxury properties.
Several major industry developments are reshaping the landscape. Glenn Kelman stepped down as Redfin CEO after 20 years, with Rocket Companies’ CEO Varun Krishna serving as interim replacement. Newrez announced it will allow cryptocurrency assets in mortgage qualification without requiring liquidation, starting in February across its non-agency Smart Series products.
The National Association of Mortgage Brokers is urging the FHA to end its lifetime mortgage insurance rule and allow MIP cancellation at 78% LTV. Trump also paused his 50-year mortgage proposal for reconsideration. JPMorgan Chase reported mortgage originations rose 29% in 2025, while credit card interest rate cap discussions emerged during their earnings call.
Locking vs Floating
Bonds weren’t too keen on a big reaction to CPI data yesterday, but that shouldn’t stand as evidence that data will continue to be ignored. Wednesday’s economic releases aren’t on CPI’s level, but there’s still room for volatility if they fall far from forecasts. Moreover, Treasuries seem like they’re just waiting for an excuse to test a bearish breakout.
Today’s Events
– Core Producer Prices MM (Nov): 0.0% vs 0.2% forecast
– PPI YoY (Nov): 3% vs 2.7% forecast
– Producer Prices (Nov): 0.2% vs 0.2% forecast
– Retail Sales (Nov): 0.6% vs 0.4% forecast
– Dec Existing home sales: 4.21M forecast
– Five Fed speakers: Paulson, Miran, Bostic, Kashkari, Williams
– Bank earnings: Bank of America, Citigroup, Wells Fargo
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.21 | 0.13 |
| 5.5 | 101.37 | 0.03 |
| 6.0 | 102.38 | 0.01 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.13 | 0.14 |
| 5.5 | 101.07 | 0.01 |
| 6.0 | 102.07 | 0.08 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.516 | 99.97 | -0.012 |
| 3 yr | 3.569 | 99.807 | -0.019 |
| 5 yr | 3.722 | 99.563 | -0.026 |
| 7 yr | 3.921 | 98.96 | -0.03 |
| 10 yr | 4.145 | 98.824 | -0.03 |
| 30 yr | 4.805 | 97.155 | -0.028 |
