WTMS Blog Today = What’s up in Mortgage Today (PM) – 10/28/2025

Mortgage-backed securities are quietly outperforming today while Treasury auctions create headwinds across the bond market. The 10-year Treasury yield sits at 3.98%, effectively unchanged from yesterday’s close despite earlier intraday volatility. MBS prices hold steady with UMBS 5.0 coupons trading at 100.05, up 2 basis points from this morning.

This relative strength matters because it means your rate sheets shouldn’t see much deterioration today. Treasury auctions dominated market attention as investors digested $183 billion of new government debt supply over two days. The 5-year Treasury auction yesterday showed strong demand from foreign buyers, helping yields pull back from earlier highs.

Today’s 7-year note auction at 1:02 PM will complete this week’s heavy supply calendar and could provide relief if demand holds up. Housing market data painted a mixed picture with home price growth continuing to moderate. The Case-Shiller 20-city index rose just 1.6% year-over-year in August, below the 1.9% forecast and marking another step down from peak price appreciation.

Monthly data showed prices actually declined 0.6% in August, suggesting seasonal cooling is taking hold. The FHFA price index offered a contrasting view, rising 0.4% monthly versus the 0.1% forecast. Consumer confidence ticked higher to 94.6 in October, beating expectations of 93.2 and showing Americans remain cautiously optimistic about economic conditions.

The labor differential within the confidence data jumped to 9.40 from 7.80, indicating more consumers see jobs as plentiful rather than hard to get. This employment strength continues to support the Fed’s measured approach to rate cuts, with Wednesday’s decision likely to bring another 25 basis point reduction.

Locking vs Floating

Rates remain flat to start the week and have handled the Treasury auction supply relatively well.

While this doesn’t eliminate the potential floor in the current rate range, it suggests lower urgency for defensive positioning. Wednesday afternoon’s Fed announcement represents the biggest volatility risk on the near-term horizon, making pre-announcement locks prudent for time-sensitive deals.

Today’s Events

Case Shiller Home Prices-20 y/y (Aug): 1.6% vs 1.9% forecast, 1.8% previous
CaseShiller 20 mm nsa (Aug): -0.6% vs -0.3% previous
FHFA Home Price Index m/m (Aug): 0.4% vs 0.1% forecast, -0.1% previous
FHFA Home Prices y/y (Aug): 2.3% vs 2.3% previous
CB Consumer Confidence (Oct): 94.6 vs 93.2 forecast, 94.2 previous
7-Year Note Auction: 1:00 PM

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.05 | 0.02 |
| 5.5 | 101.36 | 0.03 |
| 6.0 | 102.41 | -0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 100.1 | 0.23 |
| 5.5 | 101.07 | 0.06 |
| 6.0 | 101.85 | -0.01 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.494 | 100.012 | -0.002 |
| 3 yr | 3.5 | 100.001 | 0.004 |
| 5 yr | 3.612 | 100.059 | 0.009 |
| 7 yr | 3.778 | 100.594 | -0.003 |
| 10 yr | 3.98 | 102.21 | -0.006 |
| 30 yr | 4.545 | 103.346 | -0.001 |