Today is the only day of the week with any economic reports that are relevant to bond market movement. The results are in, and bonds aren’t thrilled.  Jobless Claims and the Philly Fed headline helped initially.  Yields moved back to unchanged levels after some overnight weakness, but the higher inflation component in Philly Fed was already making for second thoughts before the 9:45am S&P PMI data added fuel to the unfriendly reversal. In addition to Manufacturing PMI surging higher, the bigger story is the reported tariff-driven price increases: “Tariffs were reported as the key driver of further cost increases in August. Companies reported the steepest rise in input prices since May and the second-largest increase since January 2023. The manufacturing cost rise was especially large, being the second-steepest since August 2022, the service sector increase was the second-highest since June 2023.” Bonds moved to their weakest levels of the morning after that data.

Researchers at the Philadelphia Fed, in a 2023 report, examined the prevalence of “fraudulent investors” in the mortgage market. Their data set covered 584,499 loans issued between 2005 and 2017, of which 22,431 were deemed fraudulent.

The Federal Open Market Committee member is the third Democrat the Trump administration has accused of committing occupancy fraud.

The American Land Title Association has created two policy endorsements and updated its best practices to combat seller-impersonation fraud.

The department will seek to make its oft-criticized platform more user-friendly through a contract with Phoenixteam, aligning it to industry-peer standards.

The clip promotes Trump’s “Great American Mortgage Corp.” branding, linking it to Fannie Mae and Freddie Mac as in his earlier stock-offering post.

Almost No Reaction to Fed Minutes

As expected, today’s Fed Minutes (a more detailed account of the meeting that took place 3 weeks ago) had very little impact on the bond market. Markets honed in on one newswire in particular which noted the Fed saw inflation risks outweighing employment risks. This, of course, is because the data had yet to more forcefully suggest employment risk at the time (2 days before the downbeat jobs reports). It’s arguably more important that many Fed members view tariff inflation risks as a process that could take many more months to unfold. That leaves us in the same position as before: waiting for labor market data to really deteriorate before expecting any major additional rate relief. This could happen in as little as 2 weeks, but it depends on the jobs report. As for Fed rate cuts, September is still priced in, and December is just as likely as it was this morning despite some volatility in Fed Funds Futures mid-day.

Market Movement Recap

10:14 AM Minimal change overnight. MBS down 1 tick (.03) and 10yr down half a bp at 4.299

12:15 PM Slightly stronger.  MBS up 2 ticks (.06) and 10yr down 2.6bps at 4.28

02:03 PM Very slight negative reaction to Fed minutes offsetting very slight positive reaction to 20yr bond auction. 10yr still down 1.8bps at 4.287.  MBS up 2 ticks (.06).

02:55 PM Just a hair weaker now with 10yr down 1.1bps at 4.294 and MBS unchanged on the day.

For the 11th straight business day, mortgage rates are very close to the levels from the end of the previous day.  Over the past week, however, most of these small day-to-day movements have been microscopically higher.  Today’s is no exception. The net effect is that the average top tier 30yr fixed rate is up from 6.53% last Wednesday to 6.61% today.  Even that is a fairly minor move in the bigger picture, but it would certainly make for a weaker rate quote if Wednesdays happened to be your mortgage rate shopping days.   To put the overall change in specific, relatable terms, the average borrower would have to pay 0.4% in points to get the same rate quoted last Wednesday. This equates to $400 for every $100k borrowed.  Today’s modestly higher rates were in place before the afternoon release of the minutes from the most recent Fed meeting (3 weeks ago). The minutes didn’t offer any major new revelations beyond those already seen in recent weeks from individual Fed speeches. 

Mortgage application activity eased last week, but not in a statistically significant way.  One might be inclined to note a very slight uptick in mortgage rates, but it’s just as fair to say that rates held steady near longer-term lows.  The Mortgage Bankers Association’s weekly survey showed a 1.4% decline in the seasonally adjusted Composite Index for the week ending August 15, 2025. “Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. VA applications fell 16%, while FHA refinance applications increased as FHA rates remained comparatively competitive. The Refinance Index decreased 3% week-over-week but remains about 23% higher than the same week a year ago. The Purchase Index was essentially flat (+0.1% seasonally adjusted) and is running about 23% ahead of last year’s level. The refinance share of total mortgage applications slipped to 46.1%. ARM share decreased to 8.6%. FHA share rose to 19.1%, while VA share declined to 13.4%. Mortgage Rate Summary:
30yr Fixed: 6.68% (from 6.67%) | Points: 0.60 (down from 0.64)
15yr Fixed: 5.96% (from 5.93%) | Points: 0.70 (up from 0.63)
Jumbo 30yr: 6.64% (from 6.70%) | Points: 0.60 (up from 0.56)
FHA: 6.39% (from 6.40%) | Points: 0.66 (down from 0.77)
5/1 ARM: 6.01% (from 5.80%) | Points: 0.63 (down from 0.67)

“I asked a German girl if Germans are afraid of numbers. She said 9!” Numbers make up the bond market, and a steeper yield curve (the difference between short-term rates and long-term rates… steeper = more of a difference) tends to help banks and credit unions since they are paying less on deposits and can lend the money out at a higher spread. Brokers and independent mortgage banks aren’t fans, however, as they tend to be beat up (a technical term) by borrowers doing comparison shopping. Unfortunately for any mortgage loan originator, comparing renting and ownership isn’t going so well. Ownership costs like insurance, property taxes, and assessments for condos are going up, while rents are not. Realtor.com reports that median rents declined YOY for the 23rd straight month. Median rents are about 2.7% below their 2022 peak, so rents have basically flatlined. Rents have increased on a YTD basis, however that might be nothing more than normal seasonality. The current median asking rent is $1,711. (Today’s podcast can be found here and this week’s is sponsored by FirstClose. FirstClose provides fintech solutions to HELOC and mortgage lenders nationwide, increases profitability, and reduces costs for mortgage lenders through systems and relationships that enable lenders to assist borrowers more effectively and ultimately shorten closing times. Hear an interview with NEXA’s Mike Kortas on the advantages of the wholesale channel, the evolving needs of borrowers, and how technology will change the scope of employment in the mortgage industry.)