WTMS Blog Today = What’s up in Mortgage Today (PM) – 02/26/2026
Mortgage-backed securities hit their best levels of the day by late afternoon, with UMBS prices climbing an eighth of a point while the 10-year Treasury yield dropped to 4.01%. This marks bonds trading near their strongest recent levels, offering a rare window of pricing stability for originators. The improvements came despite geopolitical tensions escalating with US-Iran nuclear negotiations beginning in Geneva amid massive military deployments in the region.
Jobless claims data provided modest support for the bond market, coming in at 212,000 versus expectations of 215,000. Continuing claims fell more substantially to 1.833 million, beating forecasts of 1.860 million. These labor market figures suggest a steady but not overheated economy, which keeps pressure off Treasury yields and supports mortgage rate stability.
JPMorgan Chase CEO Jamie Dimon issued stark warnings about building risks in the financial system, cautioning that intense competition and loosening credit standards are pushing firms toward imprudent decisions reminiscent of the pre-2008 environment. He highlighted how elevated asset prices, rapid growth in private credit and fintech, and AI disruption could mask vulnerabilities until the credit cycle inevitably turns. For mortgage originators, this serves as a reminder to maintain prudent underwriting standards even as competition for deals intensifies.
Housing affordability continues to challenge the market despite recent rate improvements. The MBA reports the national median mortgage payment rose to $2,070 in January from $2,025 in December, even as mortgage rates declined slightly. The disconnect stems from rising purchase application amounts, which jumped from $320,000 to $332,000, reflecting persistent home price pressures that offset rate benefits for borrowers.
President Trump has directed the FHFA to allow GSEs to purchase mortgage-backed securities directly in an effort to push mortgage rates lower. He has also stated he does not want to see housing prices fall, creating policy tension between affordability and market stability. While the rate of change in CPI shelter costs has returned to pre-pandemic levels, the absolute price level remains elevated, limiting what government intervention can realistically achieve.
Artificial intelligence is emerging as a structural challenge beyond typical economic cycles, eroding the scarcity premium on human labor that underpins credit models and tax systems. As labor’s share of income falls and government revenues weaken, traditional policy tools like rate cuts may prove insufficient against technological substitution driving real-economy changes. This transition demands new frameworks for income distribution and credit risk assessment as feedback loops between labor displacement and financial stress tighten.
Consumer confidence remains subdued amid concerns about housing affordability, potential job losses, and inflationary pressures. Households with sufficient income and wealth continue driving most consumer spending, while pressure builds on other households strained by higher costs and elevated consumer credit balances. For mortgage originators, this bifurcation means focusing on well-qualified borrowers while recognizing that a broader recovery in purchase activity may remain elusive.
Locking vs Floating
Bonds are holding near their strongest recent levels this week, offering relative stability for rate lock decisions. It would take strong economic data to push rates meaningfully higher from current levels, providing some insulation against adverse moves. However, bonds can respond to non-economic events like geopolitical developments, so originators with loans closing within 15 days should consider locking to protect against unexpected volatility.
Today’s Events
Continued Claims (Feb 14): 1,833K vs 1,860K forecast, 1,869K previous
Jobless Claims (Feb 21): 212K vs 215K forecast, 206K previous
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.37 | 0.11 |
| 5.5 | 101.55 | 0.02 |
| 5.0 | 100.36 | 0.13 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.433 | 100.128 | -0.043 |
| 3 yr | 3.439 | 100.173 | -0.052 |
| 5 yr | 3.571 | 100.811 | -0.055 |
| 7 yr | 3.756 | 101.493 | -0.064 |
| 10 yr | 4.004 | 99.967 | -0.053 |
| 30 yr | 4.66 | 99.431 | -0.041 |
