WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/21/2025

Bond markets delivered a strange combination of excitement and boredom today, with modest gains masking underlying uncertainty. UMBS securities posted small improvements while Treasury yields declined across the curve. The 10-year Treasury dropped to 3.954%, continuing its gentle retreat from recent highs.

Philadelphia Fed’s non-manufacturing data shocked markets with a reading of -22.2, significantly worse than the previous -12.3. Employment within the sector plummeted to -4.5 from a positive 9.4, while new orders collapsed to -17.4 from 0.5. This economic weakness typically supports bond prices by reducing inflation concerns.

Non-QM lending continues gaining market share as traditional agency products migrate to private label securities. Lenders are increasingly focused on HELOC and second mortgage products, weighing speed versus competitive rates. The search for the “Holy Grail” of product, rate, and ease of close intensifies as economists forecast rates staying above 6% due to potential tariffs and inflation.

Locking vs Floating

Current market conditions favor cautious positioning as rates flirt with longer-term lows. Risk-averse clients should remain in lock mode while risk-tolerant borrowers can continue floating without major corrections. The trend remains favorable until it’s not, making timing crucial.

Today’s Events

Philly Fed Non-Manufacturing Business Activity: -22.2 vs -12.3 previous
– Employment: -4.5 vs +9.4 previous
– New orders: -17.4 vs +0.5 previous
– Prices: 35.8 vs 38.8 previous

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.03 | 0.13 |
| 5.5 | 101.28 | 0.06 |
| 6.0 | 102.39 | 0.02 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.95 | 0.15 |
| 5.5 | 100.93 | -0.01 |
| 6.0 | 101.83 | -0.04 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.443 | 100.11 | -0.015 |
| 3 yr | 3.442 | 100.164 | -0.02 |
| 5 yr | 3.549 | 100.347 | -0.023 |
| 7 yr | 3.73 | 100.884 | -0.028 |
| 10 yr | 3.954 | 102.425 | -0.025 |
| 30 yr | 4.541 | 103.399 | -0.029 |