**WTMS Blog Today = What’s up in Mortgage Today (PM) – 09/02/2025**

Mortgage-backed securities started September on mixed footing as markets digest expectations for Federal Reserve policy changes ahead of the September FOMC meeting. The 10-year Treasury yield held near 4.28% in early trading, providing a backdrop of cautious optimism for mortgage originators. Bond markets showed typical first-of-the-month volatility as new economic data begins to flow. Market participants are fully pricing in a September rate cut from the Federal Reserve, which has helped mortgage rates drift lower toward the 6.5% range for conventional 30-year loans. This improvement in affordability is generating renewed interest from potential homebuyers who had been sidelined by higher rates earlier this year. The expectation of easing monetary policy continues to support mortgage-backed securities pricing.

UMBS (Uniform Mortgage-Backed Securities) trading showed modest gains in early sessions, with investors positioning for potential Fed accommodation. The mortgage origination pipeline is showing signs of life as applications tick higher with the prospect of lower rates ahead. Lenders are cautiously optimistic about volume improvements in the coming months. Economic data releases this week will be critical for bond market direction, particularly Friday’s jobs report which could influence Fed policy expectations.

Mortgage professionals should watch for volatility around key data points that might shift rate cut probabilities. The market remains sensitive to any hints about the pace and magnitude of potential Fed easing. Lock-float considerations favor locking for most borrowers given the potential for upside rate volatility if economic data comes in stronger than expected. While the overall trend appears favorable for rates, tactical decisions should account for near-term market uncertainty. Subscribe to get this mortgage market intelligence delivered to your inbox daily, absolutely free.