WTMS Blog Today = What’s up in Mortgage Today (PM) – 12/04/2025

Labor market strength delivered a surprise today as initial jobless claims plunged to 191,000. This marks the lowest reading since 2022 and beats all economist expectations by a wide margin. The data signals employers are still holding onto workers despite layoff announcements from major companies like HP and FedEx.

For mortgage originators, this jobs strength could complicate the Fed’s rate-cutting plans next week. Bond markets reacted predictably to the robust employment data. UMBS securities dropped 3-9 basis points across coupons while the 10-year Treasury yield jumped to 4.093%.

The selling pressure started overnight but accelerated after the claims report at 8:30 AM. This movement suggests mortgage rates could tick higher in today’s afternoon pricing. The Federal Reserve meets next Wednesday with a rate cut widely expected.

Today’s strong jobs data won’t derail that decision but could influence future moves. Markets remain stuck in the 4.0-4.18% range on 10-year yields, waiting for the next catalyst. Home price momentum continues cooling nationwide, with 44 states showing negative price changes over the past three months.

Builder-originated mortgages are creating new competition pressures. D.R. Horton offers 3.99% rates with 3% home discounts while Lennar provides $64,000 average incentives.

These builder concessions help buyers but create inflated appraisal comps that complicate traditional lender underwriting. Non-builder originators need competitive strategies to counter these aggressive offers.

Locking vs Floating

Bonds are trading in a mid-week range despite economic data releases.

From a technical perspective, rates are approaching long-term resistance levels that could limit further upward movement. A significant break lower would require major developments in upcoming economic reports, particularly data scheduled for release in two weeks. Random volatility remains the baseline expectation between now and next Wednesday’s Fed announcement.

Today’s Events

Challenger layoffs (Nov): 71.321K vs 153.074K previous
Continued Claims (Nov/22): 1,939K vs 1960K forecast, 1960K previous
Jobless Claims (Nov/29): 191K vs 220K forecast, 216K previous

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.71 | -0.07 |
| 5.5 | 101.19 | -0.09 |
| 6.0 | 102.4 | -0.03 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.82 | -0.06 |
| 5.5 | 100.92 | -0.05 |
| 6.0 | 101.78 | -0.11 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.517 | 99.968 | 0.027 |
| 3 yr | 3.538 | 99.894 | 0.035 |
| 5 yr | 3.665 | 99.817 | 0.035 |
| 7 yr | 3.861 | 99.327 | 0.034 |
| 10 yr | 4.093 | 99.245 | 0.03 |
| 30 yr | 4.751 | 98.001 | 0.02 |