WTMS Blog Today = What’s up in Mortgage Today (AM) – 01/29/2026
Fed Holds Steady as Housing Market Shows Stress Fractures
The Federal Reserve held rates steady at 3.5% to 3.75% yesterday, marking the first pause since July as Chair Powell signaled the cutting cycle may be over. MBS and Treasury markets opened flat this morning, showing little reaction to the decision that removed language about employment downside risks from the Fed statement. Two dissenting members wanted a 25 basis point cut, but Powell made clear that significant labor market deterioration or inflation moving closer to 2% would be needed for future cuts.
Homebuyer cancellations hit a record high in December, with 40,000 contracts cancelled representing 16.3% of all properties under contract according to Redfin. High housing costs and increased inventory have empowered buyers to walk away more easily, creating a challenging environment for originators. Atlanta and Bay Area markets saw the most cancellations as buyers exercise newfound negotiating power in a market where sellers outnumber buyers by record margins.
Weekly jobless claims came in slightly higher than expected at 209K versus the 205K forecast, though continuing claims fell to 1.827 million. The labor market data shows mixed signals that align with a concerning disconnect between consumer confidence and actual unemployment rates. This breakdown in traditional economic correlations represents a post-pandemic phenomenon that economists struggle to explain.
Amazon’s announcement of 16,000 additional layoffs this week underscores broader economic concerns beyond surface-level metrics. Real disposable personal income showed virtually no growth over the past 12 months, with job growth at its lowest rate since 2010. These fundamentals suggest the mortgage origination environment may remain challenging despite stable Fed policy.
Locking vs Floating
Mortgage rates face limited downside potential given current market conditions, with the lower range established in early January. GSE MBS purchases provide some protection against Treasury sell-offs, but meaningful rate improvements require either significant bond market weakness to create buying opportunities or deterioration in major economic indicators. No significant data releases are scheduled until February’s first week that could materially impact rate direction.
Today’s Events
– Continued Claims (Jan)/17: 1,827K vs 1860K forecast, 1849K previous
– Jobless Claims (Jan)/24: 209K vs 205K forecast, 200K previous
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.03 | -0.07 |
| 5.5 | 101.45 | -0.02 |
| 6.0 | 102.42 | 0 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.99 | -0.05 |
| 5.5 | 101.11 | -0.02 |
| 6.0 | 102.26 | 0.1 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.561 | 99.883 | -0.007 |
| 3 yr | 3.63 | 99.635 | -0.01 |
| 5 yr | 3.819 | 99.123 | -0.008 |
| 7 yr | 4.026 | 98.331 | -0.002 |
| 10 yr | 4.247 | 98.003 | 0.005 |
| 30 yr | 4.872 | 96.128 | 0.016 |
