The labor market was a bigger point of discussion in the Federal Reserve’s most recent monetary policy-setting meeting, but officials were divided about the path of future actions.

While still remaining relatively bullish on the sector because of its strong performance year-to-date, all five companies’ stock outlook is at “market perform.”

New Jersey state lawmakers have introduced a state-level Community Reinvestment Act that would include online lenders and credit unions — who are exempt from the federal law — in its scope.

It’s a bit of a stretch to refer to the past week as a “losing streak” for mortgage rates. The worst part about it was the consistency of upward movement starting last Wednesday. In terms of the  size of that movement, things have been less traumatic considering the average lender was still at the lowest levels since early April with the exception of the past 2 weeks. Perhaps it would be better-described as a “non-winning streak.”  In any event, it’s over. The underlying bond market was already showing signs that it was tired of pushing rates higher by yesterday afternoon. Now today, it’s clear.  Bonds moved into stronger territory early and kept improving throughout the trading session (stronger bonds = lower rates, all else equal). The change erases all of yesterday’s damage and a bit of Monday’s as well.  Despite the improvement today, be aware that there is never a guarantee about the future when it comes to potential shifts in rate trends. An optimist might conclude that bond traders recognized a buying opportunity after this little push toward higher yields, but it will ultimately require rate-friendly economic data next week to solidify the positive message.  Conversely, if the data is un-friendly, it could spark another “non-winning streak,” or worse.

Correction to the Correction. Will it Last?

Hindsight is 20/20 and foresight may have been close enough this week given the classic correction to June’s rally giving way to a classic correction of that correction as early as Tuesday afternoon.  It wasn’t really until Wednesday that bond traders really showed their cards, buying early and often–well in advance of the afternoon’s 10yr Treasury auction or Fed Minutes.  In fact, it’s not clear that either of those events were necessary to today’s victory although the auction certainly had a more measurable impact. Data remains scarce on Thursday and foresight gets cloudy again.  In other words, anything that was remotely foreseeable has now run its course as we wait to see how narrow the likely-sideways range will be between now and next week’s CPI data.

Econ Data / Events

Refi Apps

829.3 vs 759.7

Purchase Apps

180.9 vs 165.3

Market Movement Recap

09:38 AM Consistent buying starting right at the 8:20am CME open. 10yr now down 3 bps at 4.38 and MBS up 2 ticks (.06)

12:25 PM MBS at best levels, up 5 ticks (.16) and 10yr down almost 4bps at 4.371

01:10 PM Very decent 10yr auction and some more improvement.  10yr yield down 5bps at 4.357 and MBS up 6 ticks (.19).

02:11 PM Modest improvement after Fed minutes.  MBS up 6 ticks (.19) and 10yr down 6.3bps at 4.343

04:15 PM Heading out at best levels with MBS up almost a quarter point and 10yr down 6.5bps at 4.341

If you think that everything is great in the U.S. economy, maybe it’s not. At least in New Jersey. While many residents are frolicking on the Jersey Shore, Toms River schools, one of New Jersey’s largest districts, voted to file for Chapter 9 bankruptcy after refusing to raise property taxes another 12.9 percent. This comes after last year’s 9.3 percent increase, totaling a crushing 22 percent hike over two years for homeowners. When you talk about affordability or the Fed controlling inflation, think about issues like this. State officials had ordered the district to either pass this budget or shut down all programs immediately. Over seven years, New Jersey’s school funding changes slashed $175 million from Toms River’s budget. Residents already pay some of America’s highest property taxes, with schools consuming over 50 percent of local tax bills in many towns. Meanwhile, multimillion-dollar home sales in NJ will be subject to a tax under the New Jersey “mansion tax” as part of a new bill that was passed in tandem with the state’s $58.78 billion fiscal year 2026 budget. Taking effect on July 10, this new bill shifts the burden of the mansion tax, as well as the state’s controlling interest transfer tax for commercial properties, from property buyers to sellers. It also maintains the original 1 percent fee for home sales worth $1 million to $2 million, but now also implements higher fees for increasingly expensive properties. It seems everything is going up in cost.

Mortgage application activity bounced higher last week following a drop in rates to the lowest levels in 3 months. The Mortgage Bankers Association’s (MBA) weekly survey showed a 9.4% increase in the seasonally adjusted Composite Index for the week ending July 4, 2025. The results included an adjustment for the July 4th holiday. “Mortgage rates moved lower last week, with the 30-year fixed rate decreasing to 6.77 percent, its lowest level in three months,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After adjusting for the July 4th holiday, purchase applications increased to the highest level of activity since February 2023 and remained above year-ago levels. Homebuyer demand is being fueled by increasing housing inventory and moderating home-price growth.” Refinance applications were up 9% from the previous week and are now 56% higher than the same week last year, with VA refinances jumping 32%. Purchase applications rose 9% on a seasonally adjusted basis and are now 25% higher than last year. The average loan size for purchase apps dropped to $432,600, the lowest since January. The average 30-year fixed rate fell to 6.77% while most point levels shifted only modestly. Jumbo rates posted a larger drop, but points increased more noticeably. Mortgage Rate Summary:
30yr Fixed: 6.77% (−0.02) | Points: 0.62 (unch)
15yr Fixed: 6.04% (−0.02) | Points: 0.63 (−0.04)
Jumbo 30yr: 6.69% (−0.09) | Points: 0.65 (+0.25)
FHA: 6.51% (−0.02) | Points: 0.80 (+0.04)
5/1 ARM: 6.01% (+0.02) | Points: 0.73 (+0.13)

Anyone who’s spent much time around MBS Live knows about our favorite mantra regarding predictions.  Specifically, they are for suckers–at least in the context of predicting future interest rate movement. Occasionally, though, there are conditions that result in somewhat reliable patterns or “paths of least resistance.” 
Any time the bond market has been rallying with regularity–especially when we see several successive days at the lowest yields in many weeks–and then encounters a big data flash point that prompts a sell-off (like last  week’s jobs report), the path of least resistance is to undergo a bit of a correction. Subsequently, that correction tends to show signs of leveling-off, as we noted yesterday afternoon. From there, the path of least resistance is a broadly sideways range trade as we wait for more meaningful data/events to make a case for a breakout.
Today’s supply of such events is still light even though it includes Fed Minutes and a 10yr Treasury auction (we don’t see either being up to the task of stoking any sort of large or sustainable momentum).

US Treasuries fell for a fifth day as demand for long-term government debt across the globe wanes amid a flurry of bond auctions this week.

Lenders and other businesses active in the state also stepped up with large donations and charitable campaigns in the days following the flooding disaster.