WTMS Blog Today = What’s up in Mortgage Today (AM) – 10/08/2025

Bond markets delivered the best performance in over two weeks as MBS prices climbed higher overnight. UMBS 5.0 coupons gained 9 basis points while the 10-year Treasury yield dropped to 4.105%, down from yesterday’s close of 4.127%. Mortgage originators should expect pricing improvements for afternoon rate sheets.

The light economic calendar leaves afternoon focus on the 1pm Treasury auction and 2pm FOMC minutes release. With the government shutdown continuing, most scheduled economic releases remain suspended. This creates an information vacuum that’s keeping volatility muted but could change quickly once key data returns.

Mortgage application volume disappointed last week, falling 4.7% according to MBA data. Purchase applications dropped 1% while refinance activity declined 8%, even with rates holding relatively steady. The ongoing uncertainty around government operations is clearly impacting borrower confidence and lender capacity.

Equifax fired back at FICO with a major pricing announcement that sent mortgage industry headlines soaring. The credit bureau slashed VantageScore 4.0 prices to $4.50, more than 50% below FICO’s new $10 pricing set for 2026. This credit scoring war could significantly reduce origination costs for lenders willing to adopt alternative scoring models.

Consumer inflation expectations jumped to 3.4% from 3.2% in September, according to New York Fed survey data. This increase, combined with growing labor market concerns, suggests the Fed may face more complex decisions ahead. Median home price inflation expectations remained steady at 3.0%, providing some stability for housing market participants.

Locking vs Floating
Risk-reward considerations remain muted during the government shutdown period. The modest rally to lowest rates in over two weeks creates compelling lock opportunities for risk-averse clients. Risk-tolerant borrowers continue waiting for the delayed jobs report, assuming bonds don’t lose significant ground before its release.

Today’s Events
– 1:00 PM: 10-year Treasury Note Auction
– 2:00 PM: FOMC Meeting Minutes Release

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.47 | 0.04 |
| 5.5 | 101 | 0.03 |
| 6.0 | 102.21 | 0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.66 | 0.08 |
| 5.5 | 100.75 | -0.05 |
| 6.0 | 101.66 | -0.04 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.578 | 99.851 | 0.012 |
| 3 yr | 3.591 | 99.392 | 0.009 |
| 5 yr | 3.708 | 99.626 | 0.004 |
| 7 yr | 3.897 | 99.868 | -0.001 |
| 10 yr | 4.113 | 101.116 | -0.012 |
| 30 yr | 4.703 | 100.758 | -0.023 |