**WTMS Blog Today = What’s up in Mortgage Today (PM) – 09/25/2026**

Bonds staged a respectable recovery Friday, with MBS rallying more than 5/8ths of a point and the 10-year Treasury yield falling to 5.164% by day’s close, but market analysts are asking whether this reversal represents genuine relief or merely a correction after two weeks of relentless selling. The parabolic bond selloff has been nearly unprecedented in recent memory, with concentrated acceleration at the tail end of months-long weakness, drawing comparisons only to late September 2023 when Fed communications and stronger-than-expected economic data sparked similar declines. Geopolitical headlines played a significant role today, with reports of Iran-US talks entering a technical stage sending oil prices down sharply from $94 to below $92, pulling yields down in tandem.

The question now is whether bonds have sold enough absent fresh catalysts, or whether next week’s high-stakes economic data will reignite selling pressure. Mortgage originators should remain cautious before adjusting lock-float strategy based on today’s gains alone. Economic data delivered mixed signals on Friday, with core capital expenditures accelerating to 1.6% versus a 0.5% forecast, suggesting underlying business investment resilience, while durable goods orders printed flat at 0% against a -0.4% forecast.

Consumer sentiment eased slightly to 48.1 versus the 47.6 forecast, with consumers maintaining elevated inflation expectations at 4.6% for one-year and 3.4% for five-year horizons. University of Michigan sentiment came in at 50.9, above the 49.5 forecast, indicating some stabilization in consumer confidence despite higher rates. These results don’t paint a clear picture of economic weakness that would force the Fed to reverse course, though they provide no additional evidence for aggressive tightening either.

The data backdrop suggests the bond market’s next direction will depend more on Fed communications and geopolitical developments than on the economic calendar. Mortgage rates remain trapped above 7%, a psychological threshold that is reshaping buyer behavior and forcing builders to adjust their playbook. Freddie Mac’s 30-year fixed crossed 7% this week, prompting lenders to report heavier conversion conversations with borrowers already locked in at lower rates.

More than half of new homes sold in August were priced below $400,000, reflecting builders’ shift toward lower-priced inventory as a strategy to move units despite rate headwinds. Builders are leaning harder on concessions, rate buydowns, and price reductions to offset the payment shock from higher rates. Loan officers can’t make 7% disappear, but they can frame the full payment picture—including down payment assistance, pricing, and financing—to keep buyers engaged.

Mortgage market technicians are watching key ceiling and floor levels on the 10-year Treasury, which have shifted to 5.14% (ceiling/lock trigger) and a series of supports at 4.62%, 4.71%, 4.80%, 4.83%, 4.93%, and 5.00%. These levels are critical for originators because they help track whether the bond market is consolidating or ready for directional movement. In intraday trading, MBS proved more resilient than Treasuries, suggesting that while rates rose mid-morning, the mortgage-Treasury spread benefited from shorter-duration positioning.

The 10-year yield ceiling of 5.14% represents the level above which repricing risk accelerates for originators, and the pattern of support floors provides clear gauges for when a sustainable rally may be forming. Originators should continue to monitor whether any bounce in MBS holds without fresh selling pressure before committing to longer-float positions. Underwriting standards continue to create friction in the origination process, with borrowers reporting excessive documentation requests for items that have already been submitted or that seem tangential to credit risk.

One Brooklyn mortgage applicant found his closing delayed by requirements for proof that a loose toilet was repaired, despite having already provided the purchase agreement listing the repairs. Across the industry, recurring payments to domestic help are triggering debt-verification letter requests, and minor contractual repairs are becoming closing conditions despite the sponsor’s documented completion. The mortgage industry invests heavily in AI, automated underwriting, and one-day approvals, yet borrowers still face processes where duplicate documents are requested and minor items balloon into conditions.

The real underwriting opportunity may not be processing speed, but rather determining which conditions genuinely matter to credit risk versus which add cost and time without proportional return.

**Locking vs Floating**

Originators should resist the temptation to aggressively float after today’s rally. Friday’s recovery came on the heels of an extreme two-week selloff and geopolitical headlines rather than sustainable bond demand, making it too early to declare the worst is over.

The MBS Live commentary recommends waiting until the bond market shows genuine desire to rally without said rally being a direct response to heavy selling before adjusting lock-float positioning. However, the extreme weakness over the past two weeks has created blown-out rate sheets and attractive risk-reward trading levels if even a modest recovery takes hold next week. High caution is warranted, especially with big-ticket economic data and month-end trading dynamics ahead.

**Today’s Events**

Core Capital Expenditures (August): 1.6% vs. 0.5% forecast, 0.2% prior

Durable Goods Orders (August): 0.0% vs. -0.4% forecast, 1.1% prior

Consumer Sentiment (September): 48.1 vs.

47.6 forecast, 51.7 prior

One-Year Inflation Sentiment (September): 4.6% vs. 4.6% forecast, 4.0% prior

Five-Year Inflation Sentiment (September): 3.4% vs. 3.4% forecast, 3.3% prior

University of Michigan Consumer Sentiment (September): 50.9 vs.

49.5 forecast, 51.9 prior

**Bond Pricing**

**UMBS 30 yr**
| Coupon | Price | Intra-Day Change |

**GNMA 30 yr**
| Coupon | Price | Intra-Day Change |

**Treasuries**
| Term | Yield | Price | Intra-Day Yield Change |