Mortgage application activity declined for the second consecutive week as rising interest rates continued to weigh on demand. The Mortgage Bankers Association (MBA) reported a decrease of 10.5% on a seasonally adjusted basis for the week ending March 20. Both major components moved lower. The Refinance Index fell 15% from the previous week, though it remained 52% higher than the same week one year ago.  Purchase activity also softened, with the seasonally adjusted Purchase Index declining 5% and running 5% above year-ago levels. According to MBA’s Joel Kan, persistently elevated Treasury yields—driven in part by higher oil prices and inflation concerns—pushed mortgage rates higher across the board. The average 30-year fixed rate climbed to its highest level since October 2025, further eroding refinance incentives and dampening purchase demand. The composition of activity shifted further away from refinances. The refinance share of total applications decreased to 49.6% from 52.3% the prior week, while ARM share increased slightly to 8.1% . FHA share rose to 19.7% , VA share declined to 15.9% , and USDA share edged up to 0.5% . Mortgage Rate Summary:
30yr Fixed: 6.43% (from 6.30%) | Points: 0.65 (from 0.63)
15yr Fixed: 5.83% (from 5.66%) | Points: 0.80 (from 0.73)
Jumbo 30yr: 6.45% (from 6.39%) | Points: 0.56 (from 0.34)
FHA: 6.15% (from 6.08%) | Points: 0.75 (from 0.70)
5/1 ARM: 5.75% (from 5.65%) | Points: 0.68 (from 0.67)

Products, Services, and Software for Brokers and Lenders Four Methods to Hedge Non-QM & Maximize Profits: In today’s growing non-QM market, selling best efforts is leaving value on the table. Accumulating bulk and improving execution is possible, but it involves taking price risk on the non-QM loans, and this requires hedging. A new technical brief evaluates four primary methodologies used by capital markets professionals: forward sales, correlated hedges, hedging to expected CPRs (i.e., prepayment profile), and hedging to a stochastic model. While forward sales offer direct risk transfer, their utility is limited and it doesn’t offer discernable improvements in execution. Correlated hedges provide a data-driven alternative, but face challenges regarding loan data quality and maturity mismatches. As a result, many capital markets professionals are choosing to align hedges with expected prepayment profiles. The fourth method involves hedging to a stochastic model, a more precise but complex method of valuing and hedging expected future cash flows. The technical paper also highlights an emerging preference for SOFR swaps, by using liquid and easily accessible Eris SOFR Swap futures, instead of US Treasuries. As it is more efficient to forecast and hedge forward rate expectations using the SOFR swap market, it is becoming the benchmark of choice for efficient modeling and hedging. Whether you are managing a small pool or a massive portfolio, understanding these four methods is essential for maximizing your execution and profitability. Read the technical paper and contact John Douglas.

Markets were presented with an opportunity just before the close yesterday to put their faith in another ceasefire-style announcement, but have instead opted to stick with prevailing momentum (lower stocks, higher yields and oil prices). Part of the reason is that rather than a true ceasefire, the announcement merely delayed a major escalation from this weekend by 10 days. In addition other escalations continue to add up based on overnight reports. Bonds (and stocks and oil) are now in a pattern of fading (a trading term akin to “calling the bluff of”) ostensibly hopeful de-escalation developments until they see something real and lasting.

Americans who qualify for a mortgage with Better will be able to use Bitcoin or USDC as collateral to fund their down payment through a private loan.

Full documentation was only applied to 2.6% of the underlying pool of mortgages. Debt-to-income, however, was 23.3% when it was applied.

Layoffs stretch across the organization, including members of Summit’s c-suite and its general counsel, the company said in a notice to California officials.

New questions about Fannie Mae and Freddie Mac’s guarantee by experts who saw conservatorship start points to tensions in a stalled secondary offering.

The 30-year fixed mortgage has increased by 40 basis points since February, while the 15-year is 14 basis points lower than a year ago, Freddie Mac reported.

That Escalated Quickly

It would be easy to check in on the bond market at some point on Thursday afternoon and conclude there’d been precipitous escalation in the Iran war or some other big new development putting pressure on bonds (10yr yields up almost 10bps to 4.42+ and MBS down more than 5/8ths). But today’s selling was remarkably linear and steady. It began in the overnight session and ramped up at 10:30am ET after a brief correction this morning. If you need a single scapegoat, it’s simply “renewed escalation” after yesterday’s session raised some hopes for the opposite. Looking a bit deeper, we also suspect the entire market is positioning defensively for a weekend with serious volatility potential. 

Econ Data / Events

Continued Claims (Mar)/14

1,819K vs 1850K f’cast, 1857K prev

Jobless Claims (Mar)/21

210K vs 210K f’cast, 205K prev

Market Movement Recap

08:31 AM Weaker overnight and no reaction to data. MBS down a quarter point and 10yr up 4.4bps at 4.375

11:24 AM Down 10 ticks (.31) on the day and 5 ticks (.16) from AM highs.  10yr up 4.5bps at 4.376

12:34 PM Weakest levels. MBS down more than 3/8ths and 10yr up 7bps at 4.399

02:32 PM More selling. MBS down 5/8ths and 10yr up 8.6bps at 4.417

After a somewhat hopeful day on Wednesday, mortgage rates are back to their same old tricks on Thursday. The tricks in question involve following the broader market reaction to the Iran war which has caused significant and almost exclusive upward movement in interest rates for the entire month of March. Average 30yr fixed rates have been at or near the highest levels in 7-8 months over the past 4 days. Today easily took them to slightly higher levels as global financial markets lost ground. The move lines up symmetrically with lower stock prices and higher oil prices. Until there’s meaningful and lasting de-escalation of the Iran war, the safest bet is for more volatility for interest rates. [thirtyyearmortgagerates]