An index of applications for home purchases jumped 11.1%, the most since January, while a gauge of refinancing increased at a similar rate, according to Mortgage Bankers Association data released Wednesday.

Just as Underwhelming as Expected

No sense in trying to manufacture excitement out of something boring. Even before Fed speakers went into the customary blackout period 12 days ago, it was already abundantly clear that they were all on the same page–a page of uncertainty in an uncertain chapter of an uncertain book.  Nothing had changed in the past 12 days that would allow the Fed or Powell to be any less uncertain about which of the two competing forces on rates would win out in the coming weeks/months.  As such, there was nothing Powell could do but reiterate that fact 17 times for the 17 different versions of the same question. It’s no surprise bonds are heading out the door precisely in line with pre-Fed levels.

Market Movement Recap

09:15 AM Sideways to slightly weaker overnight with a modest bounce in early trading.  MBS up 1 tick (.03) and 10yr up less than 1bp at 4.305

02:05 PM 10yr yields are down 3.0bps on the day at 4.268 and MB are up 6 ticks (.19).

03:23 PM Some back and forth during press conference, but largely at pre-Fed levels.  MBS up just over an eighth and 10yr down 2bps at 4.278

There’s nothing like a Fed announcement day to get almost every media outlet to run headlines that attempt to tie the day’s market movement to the Fed’s rate decision. The problem in today’s case is that there wasn’t even anything remotely resembling a decision, nor did anyone expect there to be. Markets were effectively betting on a zero percent chance of a rate cut at this meeting, and that’s been the case for several weeks. Fed speakers had also been very clear in their shoulder shrugs during that time, saying that there are two big policy considerations in play right now, each arguing in the opposite direction. Specifically, the Fed has a mandate to “promote maximum employment,” which could also be viewed as “promote a strong economy,” and a mandate for “price stability,” which is fancy talk for the Fed’s inflation fighting role.  When Fed speakers have recently referred to those two mandates being in tension, they mean the potential drag on the economy from tariffs and tighter fiscal policy argues in favor of lower rates if it translates to higher unemployment and weaker economic data.  Contrast that to the potential increase in inflation due to tariffs, which argues in favor of higher rates. Simply put, there was nothing the Fed could do today but sit on its hands and wait to see which side of the mandate ended up having more compelling evidence, and nothing for Fed Chair Powell to do but reiterate that fact multiple times when almost every reporter asked a different version of the same question. 

Much of the increase came from the wholesale channel, where margins were thinner, leaving them flat on for the origination unit on a sequential quarter basis.

The Irvine, California-based firm had a net loss of $40.7 million in the first quarter of 2025, a rebound from a net loss of $67.5 million in the previous period.

Loan providers saw more frequent use of verification tools as well as shortened turnaround times from preapproval to application submission, Lenderlogix said.

FHFA Director Bill Pulte has prioritized targeting fraud, including proposing a tougher Suspended Counterparty Program and debuting a mortgage fraud tip line.

Mortgage bankers have been supporting recent updates to the legislative proposal while urging legislators to fast-track it given the phaseout of VASP.

10yr Auction to The Rescue

Today’s 10yr Treasury auction was the only relevant calendar event in terms of potential market movement and it lived up to its billing. Unlike the set-up to many auctions, there was no meaningful weakness in bonds ahead of the 1pm cut-off. The results themselves were decidedly strong and the immediacy of the market reaction reflected that. Yields dropped 4bps more or less instantly, and MBS ultimately added another eighth of a point of improvement to the eighth that was already in play before the auction. From here, attention turns to Wednesday’s Fed announcement, specifically for Powell’s press conference (because there’s zero chance of a rate cut at this meeting). 

Econ Data / Events

Trade Gap

-140.50b vs -137b f’cast, -123.20b prev

Market Movement Recap

09:25 AM Initially weaker overnight, then steadily stronger into AM hours.  MBS unchanged and 10yr nearly unchanged at 4.344

01:04 PM Moving into positive territory after 10yr auction (which came in about 1.2bps below expectations). 10yr yield now down 2.1bps on the day at 4.326 and MBS up nearly an eighth of a point.

02:25 PM Off the best levels, but still stronger.  MBS up 6 ticks (.19).  10yr down 2.5bps at 4.321

03:59 PM Back in rally mode.  MBS up a quarter point and 10yr down 4.2bps at 4.303

Mortgage rates were unchanged for the average lender this morning, thanks to a modest improvement in the bond market overnight.  Rates were on course to remain mostly flat until the afternoon’s scheduled 10yr Treasury auction.  The market’s reaction to the auction allowed many lenders to revise mortgage rates slightly lower. Mortgage rates are based on securities that are similar to US Treasuries in many ways. As such, when something happens that impacts Treasuries, the mortgage securities market tends to feel it. This doesn’t always prompt an immediate change in mortgage rates because lenders only tend to make mid day changes when the underlying market makes a big enough move. Today’s market movement wasn’t exactly massive, but it was enough for most lenders to make an adjustment. In the bigger picture, a strong reception for a 10yr Treasury auction is reassuring for rates in general. That said, it will continue to be economic data and key fiscal developments that dictate momentum going forward.