**WTMS Blog Today = What’s up in Mortgage Today (AM) – 9/5/2025**

Mortgage-backed securities showed modest gains in early trading today, with UMBS 30-year 5.5% coupons posting a +0.19 increase to 100.77. This improvement comes as Treasury yields remain elevated, creating a challenging environment for mortgage rate improvements. The bond market continues to grapple with inflation concerns and Federal Reserve policy expectations. The 10-year Treasury yield is holding above key technical levels, putting pressure on mortgage pricing despite the slight MBS gains. Economic data releases this week are being closely watched by traders for signals about the Fed’s next moves. Market participants remain cautious as strong economic indicators could prompt additional rate increases.

Housing market conditions continue to reflect the impact of elevated mortgage rates from late 2024. The MBS Highway National Housing Index showed a four-point increase in January 2025, though December’s rising rates tempered the typical seasonal patterns. Origination volumes remain pressured by affordability challenges across most markets. GNMA securities are trading in line with conventional MBS, though government-backed bonds continue to show relative strength. The spread between agency MBS and Treasury securities remains wide by historical standards. This suggests ongoing concerns about mortgage market liquidity and investor demand for mortgage risk.

Looking ahead, key economic releases later this week could drive significant volatility in both Treasury and MBS markets. Mortgage originators are closely monitoring these developments for potential rate relief. Current pricing suggests limited near-term improvement in mortgage rates without a significant shift in economic fundamentals. Subscribe to get this critical mortgage market information delivered to your inbox daily, for free, and stay ahead of the trends that impact your business.