Bonds were almost perfectly flat during the overnight session along with oil and stock futures. Morning trading ushered in more volatility as the war-related headlines began to heat up. The most significant developments involve reports of a new peace proposal from Iran–one that potentially offers more concessions on nuclear aspirations. News is thin so far, but oil prices are moving lower and bond yields are following with 10s moving from 4.40 to under 4.35 in fairly short order. ISM Manufacturing came in weaker around the same time and contributed to the move.

While it’s a nice move in the short term, yields remain elevated relative to the recent range. Still, there’s some “double top” potential starting to take shape in the chart.

The use of down payment assistance has risen sharply over the past year and a half, especially among FHA borrowers. Participation has jumped from 7.5 percent at the start of 2025 to over 21 percent recently, near the highest levels in years, as high home prices and borrowing costs push more buyers to seek help. Despite this increase, borrowers using DPA look very similar to those who don’t in terms of credit scores, debt levels, and loan sizes, indicating the program is being used broadly rather than just by riskier borrowers. Performance differences are modest but consistent: DPA borrowers tend to have slightly higher rates of serious delinquency and loan buyouts over time, though their prepayment behavior is largely similar. In the mortgage market, these borrowers are concentrated in higher-coupon Ginnie Mae pools, meaning the impact is more about where the risk sits in the market rather than a major shift in overall credit quality. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Figure, which is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. Figure has hundreds of partners in the Banking, Credit Union, Home Improvement, and of course, IMB space embedding their technology. Today’s has an interview conducted by Movement Mortgage’s Lyra Waggoner of the “Chrismen” (Rob and Robbie) on a listener mailbag list of topics. Lender and Broker Products, Software, and Services

Home affordability declined on a monthly basis across loan types and racial demographics, but improved from a year ago, the Mortgage Bankers Association said.

The partnership was designed to support the growth of Redwood’s Sequoia platform and give Castlelake purchasing power for fully documented loans.

The latest study from LodeStar found the ratio of average closing cost to home sales price in several states, led by Delaware, well above the national average.

A federal judge harshly criticized the settlement of a civil suit between the Department of Justice and a Texas land developer.

The benchmark 10-year Treasury yield topped 4.4% on April 29 — its highest level since late March — as investor anxiety mounted.

Bonds Recover With Oil, But Not Completely

Ever since bottoming out together on the morning of April 17th, bond yields and oil prices have been moving higher together.  The early overnight trading hours may have witnessed a bit of a “blow-off top” (fancy words that basically mean markets reversed course simply because they’d gone too high, too fast). In other words, there wasn’t an overt reason for the reversal in the news cycle. That said, there arguably wasn’t sufficient justification for the last leg of the rate/oil spike seen yesterday. Econ data didn’t necessarily drive any of the movement, but with PCE falling right in line with expectations, it didn’t get in the way. Perhaps more impressive is that bonds didn’t see any selling pressure from the lowest jobless claims reading in more than 3 years.

Econ Data / Events

Continued Claims (Apr)/18

1,785K vs 1820K f’cast, 1821K prev

Core PCE (m/m) (Mar)

0.3% vs 0.3% f’cast, 0.4% prev

Core PCE (y/y) (Mar)

3.2% vs 3.2% f’cast, 3% prev

Core PCE Prices QoQQ1

4.3% vs 4.1% f’cast, 2.7% prev

Employment costsQ1

0.9% vs 0.8% f’cast, 0.7% prev

GDPQ1

2.0% vs 2.3% f’cast, 0.5% prev

Jobless Claims (Apr)/25

189K vs 215K f’cast, 214K prev

PCE (y/y) (Mar)

3.5% vs 3.5% f’cast, 2.8% prev

PCE prices (m/m) (Mar)

0.7% vs 0.7% f’cast, 0.4% prev

Market Movement Recap

08:31 AM slightly stronger overnight and no immediate reaction to boatload of econ data. MBS up 7 ticks and 10yr down 2.8bps at 4.402

12:05 PM Fairly flat since the open. MBS up a quarter point and 10yr down 4bps at 4.39

03:21 PM Near best levels. MBS up 10 ticks (.31) and 10yr down 4.8bps at 4.383

Mortgage applications eased modestly last week, giving back a small portion of the prior week’s sharp gains as rates moved slightly higher. The Mortgage Bankers Association (MBA) reported a 1.6% decrease on a seasonally adjusted basis for the week ending April 24. The pullback was driven by softer refinance demand, while purchase activity continued to improve. The Refinance Index fell 4% from the previous week but remained 51% higher than the same week one year ago. Meanwhile, the seasonally adjusted Purchase Index increased 1% week over week and stood 21% above last year’s level. The average 30-year fixed mortgage rate increased slightly to 6.37% from 6.35%, contributing to the decline in refinance activity. Even so, steady inventory gains and resilient demand appear to be supporting buyers during the spring market. MBA’s Mike Fratantoni said, ” Mortgage rates increased slightly last week, with the 30-year fixed rate rising to 6.37 percent… More notably, purchase application activity was more than 20 percent above last year’s pace… potential homebuyers certainly appear to be moving forward this spring and taking advantage of the more favorable inventory conditions in most parts of the country. ” Application composition shifted further away from refinancing, with refinance share declining to 42.5% from 44.2% the prior week. ARM share increased to 8.3% . FHA share fell to 17.2% , while VA share held steady at 15.0% and USDA share remained unchanged at 0.5% .

Residential construction activity moved in opposite directions in March, as housing starts posted a strong rebound while building permits fell sharply from the previous month’s elevated pace. The latest Census Bureau report suggests builders accelerated new projects even as future pipeline activity softened. Privately owned housing starts rose 10.8% to a seasonally adjusted annual rate of 1.502 million , up from February’s revised 1.356 million pace. Starts were also 10.8% higher than March 2025 levels. Single-family starts increased 9.7% to 1.032 million, while multifamily starts (buildings with five units or more) came in at 446k. On the permitting side, activity pulled back notably. Total building permits fell 10.8% to an annual rate of 1.372 million , down from February’s revised 1.538 million pace and 7.4% below year-ago levels. Single-family permits declined 3.8% to 895k, while multifamily authorizations dropped to 427k. In general, there’s no point in reading too much into month-to-month volatility in this data series. What’s important is that there’s been a decent, supportive floor of construction activity seen in 2024-2025 and a general upward trend since October, 2025. Housing completions were essentially flat for the month, edging up 0.1% to a seasonally adjusted annual rate of 1.366 million . Despite the monthly stability, completions were 12.8% lower than the same time last year. Single-family completions fell 4.8% to 896k, while multifamily completions reached 452k.