**WTMS Blog Today = What’s up in Mortgage Today (AM) – 08/27/2025**
Mortgage-backed securities showed mixed signals today as the 10-year Treasury yield held steady at 4.26%, down slightly from yesterday’s 4.28%. This minor improvement in Treasury pricing provided modest support for MBS markets, though trading volumes remained relatively light ahead of the Jackson Hole symposium later this week. The slight decline in yields suggests continued investor appetite for government bonds amid ongoing economic uncertainty.
UMBS (Uniform Mortgage-Backed Securities) pricing experienced modest gains in early trading, with most coupons showing small improvements of 2-4 ticks. The Federal Reserve’s ongoing balance sheet reduction continues to create supply pressures, but recent economic data suggesting potential Fed policy shifts has helped stabilize demand. Lock and float considerations remain challenging as volatility persists across fixed-income markets. Mortgage rates are tracking slightly lower this morning, with top-tier conventional 30-year fixed rates hovering around 6.51% according to industry tracking services. This represents the lowest level seen since early October 2024, providing some relief to both borrowers and originators.
The rate environment continues to suppress refinance activity while purchase applications remain constrained by affordability challenges. The mortgage origination landscape faces continued headwinds as application volumes remain well below historical norms. Industry participants report that purchase applications are down significantly year-over-year, while refinance activity sits at multi-decade lows. Originators are focusing on operational efficiency and market share protection rather than volume growth in this challenging environment. Housing market activity continues to reflect the impact of elevated mortgage rates, with existing home sales remaining sluggish and new construction starts showing mixed results. Inventory levels have improved in many markets, but buyer demand remains constrained by affordability concerns and economic uncertainty.
Real estate professionals are adapting strategies to work with fewer but more qualified buyers in this rate-sensitive environment. Looking ahead, market participants will closely monitor economic data releases and Fed communications for signals about future monetary policy direction. The bond market’s reaction to inflation data and employment figures will likely drive mortgage rate movements in the near term.
Today’s modest improvements provide some optimism, but sustained rate relief will depend on broader economic trends and Fed policy evolution. Ready to stay ahead of mortgage market movements? Subscribe to get this daily market intelligence delivered to your inbox every morning – completely free and designed to keep mortgage professionals informed and prepared.
