WTMS Blog Today = What’s up in Mortgage Today (AM) – 11/03/2025

Manufacturing data missed expectations this morning, sending mixed signals to bond markets. The ISM Manufacturing PMI came in at 48.7 versus the 49.5 forecast, indicating continued contraction in the sector. However, prices paid dropped significantly to 58.0 from 61.9 previously, suggesting some cooling in inflationary pressures.

The 10-year Treasury yield climbed to 4.10% while MBS prices fell modestly. Fed Chair Powell’s hawkish tone last week continues to weigh on mortgage markets. Markets have reduced expectations for a December rate cut to around 60%, down from 90% before the recent FOMC meeting.

Powell emphasized that another rate cut is “far from” certain, creating uncertainty for mortgage originators heading into the final quarter. This shift in Fed expectations has mortgage rates stuck in a sideways pattern despite some economic softening. Carrington Holdings announced the acquisition of Reliance First Capital from Tiptree Inc., adding $1 billion in annual origination capacity focused on cash-out refinances.

The deal brings 315 employees and a proprietary origination platform to Carrington’s existing retail, wholesale, and correspondent channels. This marks another significant consolidation move in the mortgage industry as larger players acquire specialized lenders. The acquisition should close in the coming months pending regulatory approval.

Industry trade groups are pushing the Trump administration to allow Fannie Mae and Freddie Mac to purchase more mortgage-backed securities when rate spreads widen. The proposal would enable the GSEs to buy up to $300 billion in MBS when the mortgage-Treasury spread exceeds 170 basis points. Community Home Lenders of America and Independent Community Bankers of America sent the proposal to Treasury Secretary Scott Bessent and FHFA Director Bill Pulte.

This mechanism could provide support for mortgage rates during periods of market stress. A record 40.3% of homeowners now own their homes outright, up from 32.8% in 2010 according to new data analysis. Over half of these 35 million mortgage-free owners are age 65 or older, concentrated in regions with lower home values like Texas and the Midwest.

This trend presents opportunities for reverse mortgage originators and home equity products. High-cost metros like Denver and Washington D.C. show the lowest rates of mortgage-free ownership.

Locking vs Floating

Fed-driven weakness has likely run its course after Thursday’s negative follow-through on rate sheets. We’re now in a more neutral risk-reward environment rather than expecting rates to bounce back lower. MBS remain down an eighth with the 10-year up 2.9 basis points at 4.104 after this morning’s modest bounce following ISM data.

Today’s Events

ISM Manufacturing Employment (Oct): 46.0 vs — forecast, 45.3 previous

ISM Manufacturing PMI (Oct): 48.7 vs 49.5 forecast, 49.1 previous

ISM Mfg Prices Paid (Oct): 58.0 vs 61.7 forecast, 61.9 previous

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.45 | -0.11 |
| 5.5 | 101.01 | -0.05 |
| 6.0 | 102.26 | -0.03 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.65 | -0.08 |
| 5.5 | 100.84 | 0.02 |
| 6.0 | 101.74 | -0.04 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.592 | 99.824 | 0.015 |
| 3 yr | 3.597 | 99.725 | 0.015 |
| 5 yr | 3.707 | 99.631 | 0.015 |
| 7 yr | 3.893 | 99.891 | 0.017 |
| 10 yr | 4.1 | 101.219 | 0.019 |
| 30 yr | 4.685 | 101.05 | 0.029 |