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What's up in Mortgage Today (PM) - 10/30/2025

Week In Review
October 30, 2025

WTMS Blog Today = What's up in Mortgage Today (PM) - 10/30/2025 Markets delivered a reality check after yesterday's Fed meeting as mortgage bonds fell despite the widely expected rate cut. The UMBS 5.0 coupon dropped nearly 20 basis points in early trading, signaling that rates may move higher for borrowers. Chair Powell's cautious tone about December cuts appears to have reset market expectations, curbing the enthusiasm that had been building around aggressive Fed easing. The Fed's balance sheet policy shift is adding another layer of complexity for mortgage originators. Starting December 1st, the central bank will end quantitative tightening and begin reinvesting agency securities proceeds into Treasury bills rather than mortgage bonds. This technical change could pressure MBS prices over time, as the Fed becomes a smaller buyer in the mortgage market. Earnings Season Delivers Mixed Results Freddie Mac reported $2.8 billion in net income for Q3 2025, down 11% year-over-year due to credit reserve builds. The GSE's earnings decline reflects a more cautious stance as the housing market shows signs of slowing. For mortgage sellers, this signals potential tightening in credit standards or pricing adjustments ahead. Redwood Trust painted a brighter picture with record $6.8 billion in cumulative loan production across platforms. The REIT's mortgage banking revenues hit their highest level since Q3 2021, demonstrating strong execution in the private label space. Capital allocated to mortgage banking operations jumped 84% since Q2 2024, indicating robust investor appetite for non-agency products. Market Dynamics Point to Volatility The disconnect between Fed policy and mortgage rates continues to confound the market. Yesterday's 25 basis point fed funds cut actually pushed mortgage rates higher, as traders questioned the path for December. Powell's reluctance to signal another cut has recalibrated expectations from a near certainty to merely a possibility. Treasury yields are pushing higher across the curve, with the 10-year climbing to 4.088% from yesterday's close at 4.06%. This upward pressure typically translates to higher mortgage rates within 24-48 hours, creating headwinds for refinance activity that had been building momentum. Today's Events - 9:55 AM: Fed Bowman Speech - 1:15 PM: Fed Logan Speech Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 99.58 | -0.04 | | 5.5 | 101.09 | -0.01 | | 5.0 | 99.72 | -0.01 |

What's up in Mortgage Today (AM) - 10/30/2025

Week In Review
October 30, 2025

WTMS Blog Today = What's up in Mortgage Today (AM) - 10/30/2025 Federal Reserve Chair Powell just delivered a reality check that sent mortgage-backed securities tumbling this morning. The market's overwhelming confidence in a December rate cut got a cold splash of water yesterday, and we're seeing the hangover effects right now. UMBS pricing dropped another 4 basis points overnight as traders recalibrate their expectations. The Fed did cut rates by 25 basis points as expected, bringing the federal funds rate to a 3.75-4.00% range. However, Powell deliberately avoided signaling whether another cut would follow in December, even though markets were nearly 100% certain just days ago. This uncertainty is creating volatility that directly impacts your rate sheets today. Corporate Earnings Paint Mixed Picture Freddie Mac reported net income of $2.8 billion for Q3 2025, down 11% year-over-year due to credit reserve builds versus releases in the prior year. More encouraging was Redwood Trust's record $6.8 billion in cumulative loan production across their platforms. Their mortgage banking revenues hit the highest levels since Q3 2021, signaling strength in the non-agency space. Capital allocated to Redwood's mortgage banking operations jumped 84% since Q2 2024. This massive increase reflects growing investor appetite for non-QM and jumbo loan products. For originators, this suggests continued strong execution options for loans that don't fit agency boxes. Treasury Markets Reset Higher The 10-year Treasury yield climbed to 4.088% this morning, up 13 basis points from yesterday's close. This move higher in benchmark rates explains why mortgage pricing is under pressure despite the Fed cut. When Treasury yields rise, mortgage rates typically follow within 24-48 hours. The Fed also announced it will end quantitative tightening on December 1st. Going forward, they'll reinvest maturing agency securities into Treasury bills rather than new MBS purchases. This policy shift removes a consistent buyer from the mortgage-backed securities market, potentially keeping upward pressure on mortgage rates. Today's Events - 9:55 AM: Fed Governor Bowman Speech - 1:15 PM: Fed Dallas President Logan Speech 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 | MBS | Security | Price | Change | |----------|-------|---------| | 30YR UMBS 5.0 | 99.58 | -0.04 | | 30YR UMBS 5.5 | 101.09 | -0.01 | | 30YR GNMA 5.0 | 99.72 | -0.01 | | 15YR UMBS-15 5.0 | 101.08 | +0.04 | US Treasuries | Maturity | Yield | Change | |----------|-------|---------| | 10 YR | 4.088% | +0.016% | | 2 YR | 3.614% | +0.018% | | 30 YR | 4.632% | +0.009% | | 5 YR | 3.724% | +0.014% | Subscribe free at WellThatMakesSense.com to get this analysis in your inbox every morning.

What's up in Mortgage Today (PM) - 10/29/2025

Week In Review
October 29, 2025

WTMS Blog Today = What's up in Mortgage Today (PM) - 10/29/2025 Mortgage rates hit their lowest levels in over a year, driving massive refinance activity ahead of this afternoon's Federal Reserve decision. The 30-year mortgage rate dropped to 6.30% according to MBA data, spurring a 111% annual jump in refinance demand. Total mortgage application volume surged 7.1% for the week, with both purchase and refinance applications climbing significantly. The Fed is widely expected to cut rates by 25 basis points at 2:00 PM ET today. While the rate cut is fully priced in by markets, Chair Powell's press conference could create volatility in either direction. Consumer confidence declined for the third straight month, reinforcing expectations for continued Fed easing through December. MBS prices opened modestly weaker this morning, with the 30-year UMBS 5.0 coupon down 4 basis points at 100.07. The 10-year Treasury yield climbed 17 basis points to 3.993% as traders position for the Fed announcement. Despite the morning weakness, rates remain at their most attractive levels since late 2023. Fannie Mae reported its 31st consecutive quarterly profit this morning, posting $3.9 billion in net income. Housing data showed mixed signals with Case-Shiller home prices rising 1.6% annually versus 1.9% forecast, while the FHFA index beat expectations at 0.4% monthly growth. Locking vs Floating Current rates represent the lowest levels in over a year, but today's Fed decision could push them in either direction. Markets have fully priced in a 25-basis point cut, meaning any hawkish commentary from Powell could cause rates to rise quickly. For loans closing within 30 days, locking may be prudent given the uncertainty surrounding Fed guidance and economic data disruptions from the government shutdown. Today's Events - Case Shiller Home Prices-20 y/y (Aug): 1.6% vs 1.9% forecast - FHFA Home Price Index m/m (Aug): 0.4% vs 0.1% forecast - Consumer Confidence (Oct): 94.6 vs 93.2 forecast - 2:00 PM: FOMC Rate Decision Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.07 | -0.04 | | 5.5 | 101.39 | -0.02 | | 6.0 | 102.49 | 0.02 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.06 | -0.01 | | 5.5 | 101.04 | 0.01 | | 6.0 | 101.88 | 0 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.5 | 100 | 0.01 | | 3 yr | 3.508 | 99.977 | 0.012 | | 5 yr | 3.621 | 100.018 | 0.013 | | 7 yr | 3.794 | 100.496 | 0.019 | | 10 yr | 3.993 | 102.099 | 0.017 | | 30 yr | 4.564 | 103.031 | 0.018 |

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