WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/15/2025
Bond markets are rallying this morning as earnings reports soothe trade war fears that dominated headlines last week. The UMBS 5.0 coupon gained 8 ticks overnight while the 10-year Treasury yield dropped to 4.011%. This combination of mortgage-backed securities strength and falling Treasury yields creates favorable pricing momentum for originators.
Strong bank earnings from Morgan Stanley and Bank of America are helping risk appetite return to Wall Street. Meanwhile, Federal Reserve officials continue signaling concern about labor market weakness, reinforcing expectations for another rate cut in October. Chair Powell’s comments yesterday about potentially stopping balance sheet reduction added additional support for bond prices.
The ongoing government shutdown now enters its third week, creating uncertainty around economic data releases. However, the NY Fed Manufacturing Index surprised significantly to the upside at 10.7 versus the -1.0 forecast. This represents a dramatic improvement from last month’s -8.7 reading, suggesting regional manufacturing activity is rebounding despite broader economic concerns.
Mortgage application volume dropped 4.7% last week according to MBA data, with refinance applications falling 8%. Purchase applications declined just 1% but remain 14% higher year-over-year. Notably, adjustable-rate mortgage share jumped to 9.5% from 8.4% as borrowers seek lower initial rates in today’s elevated rate environment.
Locking vs Floating
Current market conditions favor a cautious approach to rate risk management. With bonds holding last week’s volatile gains and rates near multi-week lows, risk-averse clients should remain in lock mode. Risk-tolerant clients may wait for additional negative volatility, but the biggest risks now come from unexpected headline shocks rather than scheduled economic data.
Today’s Events
NY Fed Manufacturing: 10.7 vs -1.0 forecast, -8.7 previous
Bond Pricing
UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.75 | 0.08 |
| 5.5 | 101.14 | 0.05 |
| 6.0 | 102.27 | 0.02 |
GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.91 | 0.08 |
| 5.5 | 100.95 | 0.06 |
| 6.0 | 101.95 | -0.01 |
Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.49 | 100.019 | 0.008 |
| 3 yr | 3.493 | 99.666 | 0.004 |
| 5 yr | 3.606 | 100.086 | -0.002 |
| 7 yr | 3.787 | 100.536 | -0.012 |
| 10 yr | 4.011 | 101.954 | -0.018 |
| 30 yr | 4.597 | 102.482 | -0.033 |