The ex-employee was accused of violating conflict of interest rules and submitting falsified documents for $1.7 million worth of loans in her six-month tenure.

Hartford, Connecticut, topped Zillow’s list of the hottest housing markets this year on the back of its nation-leading home-price appreciation forecast.

Freddie Mac’s investment in affordable housing increased by 17% in 2025 compared with the year prior, the government-sponsored entity said.

Federal Reserve Vice Chair for Supervision Michelle Bowman warned that labor market conditions could weaken further and said the central bank should avoid signaling a pause in monetary policy.

A Community Home Lenders of America adds arguments against use of single bureau while another paper takes the position that the idea merits further study.

Shares of Fannie Mae and Freddie Mac extended days-long losing streaks amid mounting unease about the impact of President Donald Trump’s policy moves on efforts to release the mortgage-finance giants from government control.

A consumer retreat contributed to the trend, which may be getting a closer look as the Trump administration weighs a ban on institutional purchases.

10yr Yields Finally Break The Range

Despite an absence of market movers on the calendar, bonds found a reason to move. In fact, 10yr yields staged their first legit breakout from the narrow trading range of the past 4 months.  Whether that has any implications for the future is a debate for technical analysts to have with fundamental traders. There was an extra little jolt of mid-day weakness when Trump suggested Hassett was out of the running for the Fed Chair nomination, but the day’s bond losses would still be better-characterized as gradual and non-event-driven. MBS outperformed yet again for the same old reason (actual and/or anticipated GSE MBS purchases), but nonetheless ended the week at the lows.

Econ Data / Events

Industrial Production (Dec)

0.4% vs 0.1% f’cast, 0.2% prev

Market Movement Recap

10:58 AM Losing ground from flat, opening levels.  MBS down 5 ticks (.16) and 10yr up 4.1bps at 4.215.  

12:48 PM Off the weakest levels in MBS, now down 3 ticks (.09). 10yr near weakest levels, up 4bps at 4.214

02:18 PM Down to new lows. MBS down 5 ticks (.16) and 10yr up 5.6bps at 4.23

Builder confidence slipped to start the year, with the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) falling two points to 37 in January. The erasure of December’s modest gains doesn’t really do much to change the broader picture: builder sentiment remains stuck in a holding pattern near its lowest levels, weighed down by the usual suspects of persistent affordability challenges and rising construction costs. The underlying components weakened across the board. The index measuring current sales conditions dipped one point to 41, while the gauge tracking prospective buyer traffic fell three points to 23—continuing to solidify its status in “low to very low” territory. Most notably, future sales expectations declined three points to 49, slipping below the breakeven level of 50 for the first time since September. “While the upper end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors,” said NAHB Chairman Buddy Hughes. “Buyers are concerned about high home prices and mortgage rates, with down payments particularly challenging given elevated price-to-income ratios.” There was at least a partial offset on the rate front. NAHB Chief Economist Robert Dietz pointed to a recent decline in mortgage rates to the lowest level in three years. However, most survey responses were collected before the announcement that Fannie Mae and Freddie Mac would purchase $200 billion in mortgage-backed securities, meaning any benefit from that policy action was largely not reflected in January’s results.

Don’t stress out. If we ignore the past 5 days, today’s mortgage rates are still the lowest since early 2023.  That said, they’re up a bit from last week and they moved moderately higher day-over-day. Last week’s news regarding Fannie and Freddie’s plans to buy $200 bln of MBS (the mortgage-backed securities that directly dictate mortgage rates) made for a rapid drop in the average mortgage rate, but that had largely run its course by Monday. Since then, the market has been finding its range. Mortgages have also been contending with countervailing forces in the broader bond market. Specifically, Treasury yields and Fed rate expectations have been rising. Just today, the 10yr yield finally broke up and out of a range that has held firm for more than 4 months. Mortgage rates have been insulated from that negative momentum in Treasuries (something that would normally imply an equal amount of negativity in the mortgage world) thanks to Fannie/Freddie MBS purchases.