WTMS Blog Today = What’s up in Mortgage Today (PM) – 12/30/2025

Bond markets struggled to find direction in the year’s final full trading session as mortgage securities weakened modestly. UMBS 5.0 coupons dropped 9 basis points to 99.85 while the 10-year Treasury yield climbed 29 basis points to 4.139%. This movement reflects typical year-end positioning as traders prepare portfolios for 2026.

Home price data delivered mixed signals for mortgage originators today. The Case-Shiller Home Price Index rose 1.3% year-over-year in October, slightly above the 1.1% forecast but below September’s 1.4% reading. The FHFA Home Price Index jumped 0.4% monthly, significantly beating the 0.1% estimate and suggesting housing markets remain resilient despite affordability challenges.

J.P. Morgan completed a significant non-QM securitization deal worth $587.6 million, highlighting continued investor appetite for alternative mortgage products. The deal includes 1,611 first-lien loans with 73% of borrowers having FICO scores above 720 and an average loan-to-value of 74%.

United Wholesale Mortgage and Maxex Clearing were the top loan originators in this pool, demonstrating the growing non-QM market’s maturation. Market participants are positioning cautiously ahead of this afternoon’s FOMC meeting minutes release at 2:00 PM EST. These minutes from the December 9-10 meeting could provide crucial insights into the Federal Reserve’s 2026 rate path.

With holiday trading volumes remaining light, any significant revelations could create outsized market reactions.

Locking vs Floating

Bond markets have entered peak holiday mode with wider trading ranges and unpredictable movements despite historically sideways December trends. MBS prices dropped an eighth while the 10-year yield rose 2.7 basis points in morning trading, suggesting modest weakness.

The next significant volatility risk from scheduled events won’t emerge until the first week of January. With limited liquidity and year-end positioning dominating, floating carries elevated risk through year-end. Consider locking loans closing within the next two weeks to avoid potential year-end volatility spikes.

Today’s Events

– Case Shiller Home Prices-20 y/y (Oct): 1.3% vs 1.1% forecast, 1.4% previous
– FHFA Home Price Index m/m (Oct): 0.4% vs 0.1% forecast, 0% previous
– Chicago PMI (Dec): 43.5 vs 39.5 forecast, 36.3 previous
– 2:00 PM: FOMC Meeting Minutes (December 9-10)

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.81 | -0.13 |
| 5.5 | 101.42 | -0.12 |
| 6.0 | 102.67 | -0.05 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.75 | -0.22 |
| 5.5 | 100.99 | -0.1 |
| 6.0 | 101.95 | -0.03 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.463 | 100.072 | 0.006 |
| 3 yr | 3.517 | 99.952 | 0.013 |
| 5 yr | 3.688 | 99.713 | 0.019 |
| 7 yr | 3.902 | 99.077 | 0.024 |
| 10 yr | 4.134 | 98.915 | 0.023 |
| 30 yr | 4.819 | 96.938 | 0.023 |