US consumer sentiment increased to a five-month high in January as Americans grew more optimistic about the economy and their finances.

Many servicing metrics look weaker amid lower rates although valuations can vary depending on companies’ models, operations and portfolio composition.

Trump, during his return from Davos, signaled reluctance to allow 401(k) withdrawals for home down payments, but other tax-advantaged options remain on table.

The class action complaint describes, from a real estate agent’s perspective, how the company allegedly pushes borrowers toward its in-house lending arm.

Treasury moves look less about data or auctions and more about gaps and channels, with PMI next to decide direction, according to the CEO of IF Securities.

This week’s only real mortgage rate movement was seen at the outset on Tuesday morning (Monday was closed for the holiday) in response to geopolitical issues and tariff escalation potential. Rates recovered only modestly when those threats abated–a fact that had everything to do with the bond market refusing to return to last week’s levels and nothing to do with any mortgage-specific issue. If anything, the mortgage market is in the midst of stunning outperformance relative to the Treasury benchmarks. Take the ubiquitous 10yr Treasury yield, for example, which is still closer to its highest levels since early September. In contrast, average mortgage rates are much closer to their lowest levels over the same time frame. Today was the least eventful of the week with the average lender holding right in line with yesterday’s latest levels. 

Uneventful Conclusion to a Volatile Week

Bonds put in a decent day on Friday, ultimately getting back into positive territory and the best closing levels of the week.  Yields were almost perfectly in line with last Friday’s. Overall, most of the past 3 days have been uneventful, but Tuesday’s range breakout meant it was a volatile week overall. MBS and mortgage rates enjoyed ample insulation against that breakout thanks to recent outperformance driven by GSE MBS purchases (both actual and anticipated). The Fed is on deck next week, but with a zero percent chance of a rate cut. True big ticket data won’t return until the week after next.

Econ Data / Events

S&P Global Composite PMI (Jan)

52.8 vs — f’cast, 52.7 prev

S&P Global Manuf. PMI (Jan)

51.9 vs 52 f’cast, 51.8 prev

S&P Global Services PMI (Jan)

52.5 vs 52.8 f’cast, 52.5 prev

Consumer Sentiment (Jan)

56.4 vs 54.0 f’cast, 52.9 prev

Sentiment: 1y Inflation (Jan)

4.0% vs 4.2% f’cast, 4.2% prev

Sentiment: 5y Inflation (Jan)

3.3% vs 3.4% f’cast, 3.2% prev

U Mich conditions (Jan)

55.4 vs 52.4 f’cast, 50.4 prev

Market Movement Recap

09:27 AM Modestly stronger overnight, but gains erased at the open. MBS down 1 tick (.03) and 10yr up about half a bp at 4.248

11:29 AM Still mostly sideways.  MBS unchanged and 10yr basically unchanged (up 0.3bps) at 4.245

01:09 PM Near weakest levels with MBS down 2 ticks (.06) and 10yr up 1.6bps at 4.258

03:05 PM Back and forth volatility over the past hour but now back in positive territory. MBS up 1 tick (.03) and 10yr down half a bp at 4.237

Bonds rallied modestly in the overnight session. There were no notable spikes in volume or volatility–just a gradual grind that took 10yr yields roughly 2bps lower by 8am ET.  Volume picked up at the 8:20am CME open (as it usually does) and this time it brought more sellers. The net effect is a return to unchanged levels, for the most part.  There’s some data on deck with S&P PMIs, Consumer Sentiment, and Leading Indicators, but not of these are top tier market movers. The rest of the day’s momentum is more likely to be dictated by pre-weekend position squaring unless there’s an unexpected geopolitical development. 

Products, Services, and Software for Brokers and Lenders LEVEL UP YOUR SERVICING PLAYBOOK WITH SAGENT AT MBA SERVICING ‘26. Join Sagent in Dallas at MBA Servicing ‘26 to discover how Dara by Sagent is transforming mortgage servicing with unified data, streamlined workflows, real-time decisioning, and built-in compliance – the winning playbook for servicers looking to drive efficiency and elevate homeowner experiences. Simplifying complexity and automating repetitive tasks to reduce operational costs across the full servicing lifecycle, Dara delivers a modern, cloud-native platform built for today’s challenges and tomorrow’s opportunities. If you’re at the event in Dallas, stop by Sagent’s booth (606) to connect with our experts, see Dara in action, and explore how your organization can unlock new levels of performance. Don’t miss this chance to reimagine your servicing strategy and bring next-gen solutions back to your team. Learn more and schedule a meeting here. In case you missed it, the First American Data & Analytics 2026 Housing Market Outlook webinar is now available to watch on demand. Hear directly from First American Deputy Chief Economist Odeta Kushi as she breaks down the key forces shaping the housing market, including mortgage rate trends, housing supply and demand, affordability challenges, and home price expectations. Odeta also shares insights into broader economic conditions and what they could mean for housing and mortgage activity in the year ahead. Whether you’re planning for the months ahead or looking to better understand today’s market dynamics, this timely analysis offers data-driven perspective to help you stay informed and prepared. Watch the webinar.

Mortgage applications continued to ride the waves from last week’s dip in rates, extending the surge that followed early-January rate volatility. The Mortgage Bankers Association (MBA) reported that applications rose 14.1% for the week ending January 16, adding to the prior week’s sharp increase. Refinance demand again led the way. The Refinance Index climbed 20% from the previous week and was 183% higher than the same week one year ago, marking the strongest weekly pace since September. The magnitude of the increase underscores the widely publicized (but oh so temporary) news that intraday 30yr fixed rates dipped just below 6% for the first time in years. “Mortgage rates declined further last week, driving another big week for refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “These movements prompted greater refinance activity from conventional and VA borrowers, with refinance applications accounting for more than 60 percent of total volume.” The rate rally was swift enough to spill over to purchase demand–a tall order in the world of mortgage apps. The Purchase Index rose 5% week-over-week, while unadjusted purchase applications increased 12% and were 18% higher than the same week one year ago. The refinance share of total applications increased to 61.9% from 60.2% the prior week. ARM share edged up to 7.1% . FHA share fell to 15.9% from 19.2%, while VA share increased slightly to 16.2%. USDA share was unchanged at 0.4%.