WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/06/2025**

Treasury yields continued their upward trajectory today as the government shutdown stretched into its second week, with the 10-year yield climbing higher amid ongoing fiscal uncertainty. Morgan Stanley strategists are advising investors to buy Treasuries if yields continue to climb this week, suggesting potential opportunities in the bond market. Despite the government closure, Treasury operations remain functional and continue to influence mortgage-backed securities pricing. The mortgage-backed securities market faced headwinds today with UMBS prices showing weakness as Treasury volatility spilled over into agency MBS trading. According to MBS Live data, 30-year fixed mortgage rates reached 6.38%, up 4 basis points from previous levels, reflecting the broader selloff in interest rate markets.

GNMA securities also experienced pricing pressure as investors remained cautious about duration exposure amid the political uncertainty. Private sector employment data released for September showed concerning job losses, adding complexity to the Federal Reserve’s monetary policy outlook and mortgage market dynamics. The employment weakness contrasts with persistent inflationary pressures, creating a challenging environment for mortgage originators and borrowers alike. This mixed economic data is contributing to increased volatility in both Treasury and MBS markets. The 15-year fixed mortgage rate climbed six basis points to 5.55%, representing a 30 basis point increase compared to the same period last year, according to recent market data. Lock and float considerations have become increasingly critical for mortgage professionals as rate volatility continues to challenge pricing strategies.

Mortgage originators are reporting heightened difficulty in managing pipeline risk amid the current rate environment. The ongoing government shutdown is creating additional uncertainty for housing finance agencies and mortgage market participants, though essential Treasury functions continue to operate. Market participants are closely monitoring political developments that could influence fiscal policy and, by extension, interest rate markets. The combination of political uncertainty and mixed economic data is expected to maintain elevated volatility in mortgage markets through the remainder of the week.

Subscribe to get this critical mortgage market intelligence delivered to your inbox daily, completely free, so you never miss important developments that impact your business and investment decisions.