WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/17/2025

Bonds are unwinding yesterday’s liquidity panic, but mortgage rates remain near their longer-term lows. UMBS 5.0 coupons dropped to 99.81, down 7 basis points from earlier trading. This volatility creates opportunities for rate-sensitive borrowers who’ve been waiting on the sidelines.

The NY Fed Manufacturing Index surged to 10.7 versus forecasts of -1.0, marking a dramatic reversal from last month’s -8.7 reading. Such a significant beat typically pushes Treasury yields higher as it signals economic strength. The 10-year Treasury climbed to 3.998%, testing the psychologically important 4.0% level that has acted as resistance for weeks.

Market Turbulence and Policy Uncertainty

The Consumer Financial Protection Bureau faces an uncertain future as White House Budget Director Russell Vought announced plans to shut down the agency within two to three months. This contradicts previous administration statements about merely downsizing the bureau. For mortgage originators, CFPB closure could mean significant regulatory changes affecting compliance costs and consumer protection rules.

Regional bank stocks rebounded Friday after better-than-expected earnings from Truist, Regions, and Fifth Third showed lower credit loss provisions. European banks weren’t as fortunate, with Deutsche Bank and Barclays falling over 4% amid continued private credit concerns. The banking sector’s health directly impacts mortgage credit availability and pricing spreads.

Housing Market Momentum Builds

Homebuilder confidence jumped 5 points to 37 in October, the largest increase since early 2024, driven by falling mortgage rates. While still below the 50 breakeven point, this improvement suggests builders see light ahead as affordability slowly improves. The National Association of Home Builders notes that buyers remain cautious, waiting for rates to drop further before committing.

Rocket Mortgage announced conforming loan limits of $825,550 for single-family homes in most states, exceeding competitors’ $819,000 limits. In Alaska and Hawaii, Rocket’s $1,238,325 limit sets the industry high. These early announcements ahead of the official federal limits in November give lenders a competitive edge in high-cost markets.

Locking vs Floating

With rates flirting with longer-term lows but showing intraday volatility, the strategy depends on your client’s risk tolerance. Risk-averse borrowers should lock now as any economic strength could push rates higher. Risk-tolerant clients can continue floating, waiting for negative economic data to force rates even lower, but the trend could reverse without warning.

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 | 99.81 | -0.07 |
| 5.5 | 101.14 | -0.04 |
| 6.0 | 102.29 | -0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.83 | 0.05 |
| 5.5 | 100.86 | 0.07 |
| 6.0 | 101.86 | 0.11 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.453 | 100.09 | 0.031 |
| 3 yr | 3.46 | 100.112 | 0.034 |
| 5 yr | 3.582 | 100.195 | 0.037 |
| 7 yr | 3.772 | 100.631 | 0.033 |
| 10 yr | 3.998 | 102.059 | 0.029 |
| 30 yr | 4.597 | 102.474 | 0.014 |