WTMS Blog Today = What’s up in Mortgage Today (PM) – 01/26/2026
Mortgage-backed securities delivered strong outperformance today, with UMBS 5.0 coupons climbing 12 basis points while Treasury yields remained relatively stable. The MBS rally appears driven by GSE purchases behind the scenes, providing crucial support for mortgage originators facing challenging rate environments. This divergence between MBS and Treasury performance offers a rare bright spot for pricing improvements.
Core Capital Expenditures data surprised to the upside at 0.7% versus no forecast, while Durable Goods Orders jumped 5.3% versus a 3.7% forecast. These strong economic readings initially pressured bonds but the market quickly recovered, suggesting investors may be looking past single data points. The 10-year Treasury closed down 1.7 basis points at 4.21%, providing breathing room for mortgage rates.
MBS prices reached daily highs by mid-afternoon, with the strongest gains concentrated in the 5.0 and 5.5 coupon sectors. The afternoon rally coincided with Treasury stability, creating favorable conditions for rate sheet improvements. This technical setup suggests mortgage rates have some insulation against broader bond market volatility through the remainder of the week.
Locking vs Floating
Current market conditions favor a cautious approach to floating, as mortgage rates established their lower limit range in early January. Without significant Treasury rallies or deteriorating economic data, further rate improvements appear limited in the near term. For loans closing within 15 days, locking provides protection against potential volatility while still capturing today’s MBS outperformance.
Today’s Events
– Core CapEx (Nov): 0.7% vs no forecast, 0.5% previous
– Durable Goods (Nov): 5.3% vs 3.7% forecast, -2.2% previous
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.06 | 0.12 |
| 5.5 | 101.41 | 0.07 |
| 6.0 | 102.34 | 0 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.97 | 0.09 |
| 5.5 | 101.03 | 0.05 |
| 6.0 | 102.1 | 0.02 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.59 | 99.828 | -0.006 |
| 3 yr | 3.655 | 99.563 | -0.009 |
| 5 yr | 3.821 | 99.117 | -0.009 |
| 7 yr | 4.013 | 98.411 | -0.012 |
| 10 yr | 4.213 | 98.278 | -0.017 |
| 30 yr | 4.802 | 97.202 | -0.028 |
