WTMS Blog Today = What’s up in Mortgage Today (PM) – 12/17/2025

Mortgage bonds are testing investor patience as the 30-year UMBS 5.0 coupon dropped to 99.47, down 7 basis points from yesterday’s close. The Treasury 10-year yield climbed to 4.176%, up 30 basis points in pre-market trading. These movements signal mortgage rates could tick higher for borrowers shopping this week.

The job market is showing concerning signs despite Tuesday’s unemployment uptick to 4.6 percent. Markets failed to rally meaningfully on the higher jobless rate, suggesting investors need clearer evidence of economic cooling. This lukewarm response keeps pressure on mortgage-backed securities and limits any near-term rate improvement for originators.

Freddie Mac officially appointed Kenny Smith as its new CEO today, replacing interim leadership after Diana Reid’s departure in March. Smith brings 27 years of Deloitte Consulting experience to the government-sponsored enterprise. His appointment comes with the familiar $600,000 annual salary cap that applies to both Freddie Mac and Fannie Mae leadership positions.

Mortgage application volume declined 3.8 percent last week according to MBA data, driven by weakness in both purchase and refinance activity. Despite the weekly drop, refinance applications remain 86 percent higher year-over-year while purchase applications show 13 percent annual growth. This mixed picture reflects borrowers’ continued sensitivity to rate movements following recent Fed policy changes.

The broader economic picture remains mixed as retail sales stayed flat in October while business sentiment continues deteriorating. Higher input costs and slowing consumer momentum are weighing on market confidence. Three Fed speakers are scheduled today including Governor Waller, which could provide additional clarity on the central bank’s rate trajectory.

Locking vs Floating

Rates show no improvement after Tuesday’s jobs report despite unemployment rising to multi-year highs. Risk-averse clients may interpret this as resistance to meaningful rate improvement through year-end. Most market watchers expect bigger moves after Thursday’s CPI inflation data, suggesting a wait-and-see approach for non-urgent locks.

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.52 | -0.02 |
| 5.5 | 101.17 | 0 |
| 6.0 | 102.51 | 0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.52 | 0.11 |
| 5.5 | 100.86 | 0.12 |
| 6.0 | 101.82 | 0.03 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.499 | 100.003 | 0.009 |
| 3 yr | 3.54 | 99.887 | 0.013 |
| 5 yr | 3.704 | 99.641 | 0.008 |
| 7 yr | 3.91 | 99.027 | 0.008 |
| 10 yr | 4.154 | 98.748 | 0.014 |
| 30 yr | 4.827 | 96.813 | 0.014 |