WTMS Blog Today = What’s up in Mortgage Today (AM) – 11/26/2025

Stronger economic data is creating headaches for mortgage originators this morning as bonds face fresh pressure. Jobless claims dropped to 216,000 versus expectations of 225,000, showing the labor market remains resilient. Durable goods orders also beat forecasts at 0.5% versus 0.3% expected, suggesting manufacturing strength continues.

These upbeat numbers pushed 10-year Treasury yields above 4% and dragged mortgage-backed securities lower. UMBS prices fell 9 basis points while GNMA securities showed mixed performance across coupons. The stronger data argues against aggressive Federal Reserve rate cuts, which removes a key tailwind for mortgage rate improvements.

Major Conforming Loan Limit Increase Announced

The Federal Housing Finance Agency raised 2026 conforming loan limits to $832,750, up $26,250 from this year’s $806,500. This 3.26% increase reflects rising home prices over the past year and expands the conventional mortgage market significantly. High-cost areas will see ceiling limits increase to $1,249,125, opening new opportunities for jumbo-to-conforming conversions.

For mortgage sellers, this means more loans will qualify for government-sponsored enterprise purchase in 2026. Borrowers who previously needed jumbo financing may now access conventional rates and terms. The increase takes effect January 1st, so start preparing your systems and marketing materials now.

Independent Mortgage Banks Show Profit Recovery

Third-quarter earnings data reveals mortgage company profits improved to $1,201 per loan versus $950 in Q2. About 85% of surveyed companies returned to profitability as application volume increased through September. This uptick came from rate volatility that drove both purchase and refinance activity.

The profit improvement reflects operational adjustments made throughout 2025’s challenging environment. Companies that survived the downturn are now positioned for growth as market conditions stabilize. However, the current rate environment suggests maintaining cautious optimism about future volumes.

Locking vs Floating

Thanksgiving week volatility has arrived with rates moving higher on stronger data. Tuesday’s improvement provided temporary relief, but Wednesday’s economic releases eliminated those gains quickly. Proximity to long-term rate lows means additional meaningful drops require fresh supportive economic data.

Consider locking loans closing within 30 days given the uncertain rate trajectory. The December Federal Reserve meeting remains the next major catalyst for sustained movement. Until then, expect continued choppy trading patterns with limited directional conviction.

Today’s Events

– 8:30 AM: September Durable Goods Orders (0.5% vs 0.3% forecast)
– 8:30 AM: Weekly Jobless Claims (216K vs 225K forecast)
– 8:30 AM: Continued Claims (1,960K)
– 9:45 AM: November Chicago PMI
– 11:30 AM: 7-Year Treasury Note Auction

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.81 | -0.08 |
| 5.5 | 101.26 | -0.03 |
| 6.0 | 102.39 | 0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.94 | -0.05 |
| 5.5 | 101.03 | 0.03 |
| 6.0 | 101.79 | -0.1 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.491 | 100.017 | 0.037 |
| 3 yr | 3.486 | 100.038 | 0.037 |
| 5 yr | 3.592 | 100.149 | 0.022 |
| 7 yr | 3.779 | 99.821 | 0.027 |
| 10 yr | 4.024 | 99.802 | 0.028 |
| 30 yr | 4.671 | 99.259 | 0.022 |