The average top tier 30yr fixed mortgage rate had already dipped to the lowest levels since May 1st at the start of the week.  Two additional days of modest improvement brings us to the lowest levels since April 4th as of today.   April 4th is probably a day that’s worth remembering.  If rates take out that particular floor, it would signify some more serious momentum toward lower borrowing costs.  Reason being: April 4th’s MND rate index was 6.6%–almost 0.20% lower than today’s 6.79%.   Rates jumped abruptly after April 4th as the bond market reacted to a sharply stronger jobs report. They continued higher the following week after the tariff “pause.”  Today’s improvement is really more a reflection of yesterday afternoon’s bond market strength.  As a reminder, lenders prefer to change their rates as infrequently as possible after setting them initially in the morning. If the bond market moves enough, they will issue mid day “reprices.” Many lenders did so in response to yesterday’s bond market gains, but in those scenarios, there tends to be a bit more left on the table. If the bond market holds reasonably steady overnight (as it did today), lenders can then pass along the additional improvement.

AI doesn’t have an NMLS number. (Zillow has never, ever set foot in a house for that matter.) Do you own a computer? Most in lending do. Elon Musk? I guess not. A courtroom twist in Musk’s war with OpenAI has revealed a stunningly bizarre detail about the self-described Techno King: His lawyers say that he doesn’t own a computer. (We know that President Trump has a telephone, and in fact the Trump Organization’s T1 phone is likely to be made in China.) A big topic at mortgage conferences is Artificial Intelligence. But AI seems to be becoming more lifelike. For example, Sesame AI is a “cutting-edge AI voice model that delivers natural and expressive speech synthesis. Perfect for content creators, developers, and businesses looking to add lifelike voices to their applications.” Send in some photos of yourself, and watch a film of you created saying the dialog you type in.) Scary. To no one’s surprise, a Microsoft study found that relying on AI kills your critical thinking skills. (Today’s podcast can be found here and this week is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Today’s has an interview with Polunsky Beitel Green’s Marty Green on why Fannie Mae and Freddie Mac’s exit from conservatorship must be carefully structured to preserve market stability, and protect borrowers, lenders, and the broader economy.)

Bonds are taking a breath this morning after hitting the best levels in more than a month yesterday. The event calendar is much lighter than it seems at first glance.  While there’s always some chance that Powell will say something important at a congressional testimony, the chances are far lower on the 2nd of the 2 days.  Beyond that, New Home Sales data is not a big market mover. That leaves the afternoon’s 5yr Treasury auction as the main source of potential volatility and it would have to be exceptionally strong/weak in order to realize that potential. Trading levels are slightly weaker, but if it weren’t for yesterday, we’d still be at the best levels in over a month, so…

The gap between costs and wages hit an inflection point and policy may determine what happens next, according to the Harvard Joint Center for Housing Studies.

The equity-backed loan offers Rocket customers funds for down payments and closing costs on a new purchase while giving them six months to sell their existing property.

Federal Reserve Chair Jerome Powell testified in the House Tuesday on the heels of yet another pointed social media post from President Donald Trump. But House Republicans largely avoided landing political blows against the central bank chair.

The Consumer Financial Protection Bureau cut short a five-year agreement with Bank of America Corp. over the bank’s alleged submission of false mortgage data as the significantly curtailed government agency rolls back a bevy of settlements.

Transparency has improved for mortgages but associations still lack access and insurance is a challenge in efforts to balance access to housing with safety.

Solid Response to Data and Dovishness

The morning commentary focused more on the relatively dovish tone struck by Powell in today’s congressional testimony. To be clear, we wouldn’t say it was dovish in an outright sense, but when compared to last week’s press conference, it left more hope for fans of low rates. A separate development at the same time which deserves more attention is today’s labor differential in the Consumer Confidence Index. It suggests the worst labor market conditions since the economy exited covid lockdowns in 2020. Considering the Fed keeps saying a strong labor market is the key reason they can wait to cut rates, that’s timely data, and it will surely have traders on the edge of their seats for incoming employment-related releases. Bonds rallied early and held gains steadily into the close–nothing extreme, but another incremental victory.

Econ Data / Events

Case Shiller Home Prices y/y

3.4 vs 4.0 f’cast, 4.1 prev

FHFA Home Prices y/y

3.0 vs 3.9 prev

Market Movement Recap

10:45 AM Sideways to slightly weaker overnight, but gaining some ground during Powell testimony.  MBS up 5 ticks (.16) and 10yr down 3.7bps at 4.308

02:12 PM Holding post-Powell gains in a relatively narrow range.  MBS up 9 ticks (.28) and 10yr down 5.3bps at 4.292

Both the FHFA and Case‑Shiller home price indices were released today. While the data collection time frame is from April, they each suggest a similar shift is underway when adjusting for seasonality. Specifically, if we ignore seasonality, prices rose.  If we don’t, they were down 0.4% from March. FHFA House Price Index (seasonally adjusted, MoM)

April: −0.4%; March was revised from −0.1% to 0.0%

YoY: +3.0% from April 2024 to April 2025

Monthly figures varied regionally: the West South Central and South Atlantic divisions posted the steepest falls (−1.3%), while the Middle Atlantic rose +1.2%. All nine divisions remain positive YoY (ranging from +0.5% to +7.4%). The 0.4% drop is in line with slower spring momentum—not drastic, but a continued cooling from prior gains. The upward revision in March helps to offset April’s declines to some extent. Case‑Shiller National Index (unadjusted)

YoY: +2.7% in April, down from +3.4% in March

MoM (raw): +0.6%

MoM (seasonally adjusted): −0.4%