Well That Makes Sense – Page 2 – WTMS Well That Makes Sense

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What's up in Mortgage Today (PM) - 10/28/2025

Week In Review
October 28, 2025

WTMS Blog Today = What's up in Mortgage Today (PM) - 10/28/2025 Mortgage-backed securities are quietly outperforming today while Treasury auctions create headwinds across the bond market. The 10-year Treasury yield sits at 3.98%, effectively unchanged from yesterday's close despite earlier intraday volatility. MBS prices hold steady with UMBS 5.0 coupons trading at 100.05, up 2 basis points from this morning. This relative strength matters because it means your rate sheets shouldn't see much deterioration today. Treasury auctions dominated market attention as investors digested $183 billion of new government debt supply over two days. The 5-year Treasury auction yesterday showed strong demand from foreign buyers, helping yields pull back from earlier highs. Today's 7-year note auction at 1:02 PM will complete this week's heavy supply calendar and could provide relief if demand holds up. Housing market data painted a mixed picture with home price growth continuing to moderate. The Case-Shiller 20-city index rose just 1.6% year-over-year in August, below the 1.9% forecast and marking another step down from peak price appreciation. Monthly data showed prices actually declined 0.6% in August, suggesting seasonal cooling is taking hold. The FHFA price index offered a contrasting view, rising 0.4% monthly versus the 0.1% forecast. Consumer confidence ticked higher to 94.6 in October, beating expectations of 93.2 and showing Americans remain cautiously optimistic about economic conditions. The labor differential within the confidence data jumped to 9.40 from 7.80, indicating more consumers see jobs as plentiful rather than hard to get. This employment strength continues to support the Fed's measured approach to rate cuts, with Wednesday's decision likely to bring another 25 basis point reduction. Locking vs Floating Rates remain flat to start the week and have handled the Treasury auction supply relatively well. While this doesn't eliminate the potential floor in the current rate range, it suggests lower urgency for defensive positioning. Wednesday afternoon's Fed announcement represents the biggest volatility risk on the near-term horizon, making pre-announcement locks prudent for time-sensitive deals. Today's Events Case Shiller Home Prices-20 y/y (Aug): 1.6% vs 1.9% forecast, 1.8% previous CaseShiller 20 mm nsa (Aug): -0.6% vs -0.3% previous FHFA Home Price Index m/m (Aug): 0.4% vs 0.1% forecast, -0.1% previous FHFA Home Prices y/y (Aug): 2.3% vs 2.3% previous CB Consumer Confidence (Oct): 94.6 vs 93.2 forecast, 94.2 previous 7-Year Note Auction: 1:00 PM Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.05 | 0.02 | | 5.5 | 101.36 | 0.03 | | 6.0 | 102.41 | -0.01 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.1 | 0.23 | | 5.5 | 101.07 | 0.06 | | 6.0 | 101.85 | -0.01 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.494 | 100.012 | -0.002 | | 3 yr | 3.5 | 100.001 | 0.004 | | 5 yr | 3.612 | 100.059 | 0.009 | | 7 yr | 3.778 | 100.594 | -0.003 | | 10 yr | 3.98 | 102.21 | -0.006 | | 30 yr | 4.545 | 103.346 | -0.001 |

What's up in Mortgage Today (AM) - 10/28/2025

Week In Review
October 28, 2025

WTMS Blog Today = What's up in Mortgage Today (AM) - 10/28/2025 Mortgage-backed securities are staging a quiet revolt this morning, outperforming Treasuries despite $183 billion in new Treasury supply hitting markets this week. The UMBS 5.0 coupon gained 3 basis points while the 10-year Treasury sits flat at 3.98%, suggesting MBS investors aren't fazed by the government's heavy borrowing schedule. This divergence creates a rare window where lenders might see better pricing on mortgage products compared to the underlying Treasury benchmark. Home price data delivered mixed signals with the Case-Shiller index rising just 1.6% year-over-year, well below the 1.9% forecast and marking a continued slowdown in appreciation. The Federal Housing Finance Agency painted a different picture, showing monthly gains of 0.4% that beat expectations of 0.1%. For mortgage originators, slower price growth could eventually help borrower affordability, but the inconsistent data makes it harder to predict when that relief might arrive. Consumer confidence held steady at 94.6 in October, slightly beating forecasts and showing Americans remain cautiously optimistic about economic conditions. More importantly for the mortgage market, the labor differential - measuring the gap between those saying jobs are plentiful versus hard to get - jumped to 9.40 from 7.80. This employment strength supports the Fed's gradual approach to rate cuts and suggests mortgage demand could stabilize if rates continue their recent modest decline. Today's 7-year Treasury auction at 1:00 PM will test investor appetite after yesterday's mixed results saw strong demand for 5-year notes but weaker interest in 2-year paper. If the auction goes well, it could provide some post-supply relief that helps both Treasuries and mortgage rates. Wednesday's Fed announcement remains the week's biggest wildcard, with markets expecting a 25 basis point cut but watching for clues about the December meeting. Locking vs Floating Current market conditions favor a cautious approach to rate management. Rates remain relatively stable with MBS showing better resilience than Treasuries, but Wednesday's Fed announcement poses the biggest near-term volatility risk. For loans closing within the next two weeks, locking now provides protection against potential Fed-induced swings. Longer-term deals might benefit from waiting to see how markets digest this week's Treasury supply and Fed guidance before committing to rates. 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 - 7-Year Treasury Note Auction: $44 billion at 1:00 PM Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.05 | 0.02 | | 5.5 | 101.36 | 0.03 | | 6.0 | 102.41 | -0.01 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 100.1 | 0.23 | | 5.5 | 101.07 | 0.06 | | 6.0 | 101.85 | -0.01 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.494 | 100.012 | -0.002 | | 3 yr | 3.5 | 100.001 | 0.004 | | 5 yr | 3.612 | 100.059 | 0.009 | | 7 yr | 3.778 | 100.594 | -0.003 | | 10 yr | 3.98 | 102.21 | -0.006 | | 30 yr | 4.545 | 103.346 | -0.001 |

What's up in Mortgage Today (AM) - 10/27/2025

Week In Review
October 27, 2025

WTMS Blog Today = What's up in Mortgage Today (AM) - 10/27/2025 Markets are consolidating ahead of the Federal Reserve meeting as economic data remains sparse due to the ongoing government shutdown. UMBS 5.0 coupons dropped 3 basis points to 99.81 in early trading while the 10-year Treasury yield climbed 20 basis points to 4.022%. This pre-Fed positioning suggests traders are cautious about potential policy changes despite the widely expected 25 basis point rate cut. The mortgage-backed securities market is showing signs of weakness with broader selling pressure after the markets opened. Both UMBS and GNMA securities declined across most coupons as investors prepare for this week's Treasury auction cycle. The combination of pre-Fed uncertainty and $139 billion in new Treasury supply is creating headwinds for mortgage pricing. Major Industry News The Mortgage Bankers Association delivered a sobering forecast at its Las Vegas convention, warning that rates will remain above 6% through 2026. Chief Economist Mike Fratantoni cited the 10-year Treasury's 4%-4.5% range as evidence that mortgage rates are more likely to move higher than lower. This represents a significant shift from earlier optimism about returning to sub-6% rates. Fannie Mae announced key leadership changes with Jake Williamson becoming acting head of Single-Family and Tom Klein taking over as acting general counsel. Both executives bring roughly two decades of experience at the GSE during a critical period as speculation grows about potential privatization by late 2025. The changes follow CEO Priscilla Almodovar's departure and are part of a broader management restructuring. Locking vs Floating Current market conditions favor a cautious approach to rate exposure. Despite seemingly friendly September CPI data, rates have nudged higher over the past two days, building a case for current levels representing a floor. The Fed's press conference tone and this week's accelerated Treasury auction cycle could drive additional volatility, making locks attractive for loans closing within 30 days. Today's Events - 11:30 AM: 2-Year Note Auction ($69 billion) - 1:00 PM: 5-Year Note Auction ($70 billion) Bond Pricing UMBS 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 99.8 | -0.05 | | 5.5 | 101.23 | -0.01 | | 6.0 | 102.36 | 0.01 | GNMA 30 yr | Coupon | Price | Intra-Day Change | | 5.0 | 99.85 | -0.05 | | 5.5 | 100.95 | 0 | | 6.0 | 101.79 | -0.01 | Treasuries | Term | Yield | Price | Intra-Day Yield Change | | 2 yr | 3.515 | 99.972 | 0.022 | | 3 yr | 3.523 | 99.936 | 0.022 | | 5 yr | 3.639 | 99.937 | 0.021 | | 7 yr | 3.815 | 100.366 | 0.015 | | 10 yr | 4.024 | 101.848 | 0.004 | | 30 yr | 4.597 | 102.484 | -0.005 |

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