“Remember how when you were little you could just rip off your diaper and run around naked and everyone thought it was so cute and funny? Anyway, I need bail money.” Money makes the world go ‘round. Fed President Lisa Cook was fired earlier this week based on claims of occupancy fraud, and while I agree with many of you that this Commentary has been writing too much about politics lately, politics and the mortgage industry are certainly intertwined. There’s a nearly identical occupancy story coming out of Texas. “Texas Attorney General Ken Paxton and his wife, state Sen. Angela Paxton, are longtime owners of a $1.5 million house in a gated community in McKinney. In 2015, they snapped up a second home in Austin. Then another. The problem: Mortgages signed by the Paxtons contained inaccurate statements declaring that each of those three houses was their primary residence, enabling the now-estranged couple to improperly lock in low interest rates…” Of course, things should be equal in the eyes of the law, right? I’d like to believe enforcing it isn’t a political thing. Maybe things have gotten too political, or maybe people like being pissed off these days more than normal? Just ask a couple of former Phoenix Suns minority owners. A pair of them who were holdovers from the previous ownership group are suing the team, alleging that current Suns owner, and head of UWM, Mat Ishbia has refused access to internal records. It’s the sixth lawsuit against the team since November 2024. I think we had a national election around that time. (Today’s podcast can be found here and this week’s is sponsored by Arrive Home. Arrive Home helps mortgage lenders connect creditworthy buyers with down payment assistance and affordable homeownership solutions, offering tools that empower lenders and uplift communities. Hear an interview with Trueworks Victor Kabdebon on data from recent homebuyer surveys pertaining to products and lender decisions.)

This morning’s economic calendar only looks robust on paper.  While quarterly GDP results in numerous line items, they’re not as important as they might sound. For instance, PCE prices are an important inflation index, but the version released with GDP applies to Q2 and is thus just revising already-released PCE data. Additionally, it is not capturing any of the July inflation that will be reported with tomorrow’s monthly PCE.  The same “stale” factor applies to everything in today’s GDP release (this is why GDP revisions don’t have nearly as much market movement potential as an initial release, which we won’t get until October). Jobless Claims data rarely has a big impact and today is no exception. While Continued Claims recovered slightly, it wasn’t a big enough bounce to be significant. Weekly claims continue to be boring.

Yields continue operating well within the post-NFP range, but with a friendlier trend since last week’s Jackson Hole speech.

There is no singular, official primary source for mortgage rate levels. The going rate is whatever can be locked/closed at any given lender. As such, we rely on surveys and data aggregations in order to routinely monitor the probable going rate.  The longest-standing weekly survey from Freddie Mac was updated today and, while it showed a decline to the lowest levels since October 2024 (something we agree with), it is too slow-moving to reflect the current reality. Freddie’s survey showed 6.56% today, and this would be based on the average of the 5 days from last Thursday through yesterday.  MND tracks daily rates based on objective rate sheet data from multiple lenders. We had the average top tier rate at 6.62% last Thursday, but it has fallen since then. To be precise, it fell quickly on Friday after Fed Chair Powell’s speech at Jackson Hole. From there, we’ve been in a narrow range this week, but each of the past 3 days have seen a modest tick lower. The net effect is an index level of 6.50% today–the lowest we’ve seen since October 3rd, even if only a hair lower than yesterday. It’s important to understand what 6.50% means in the context of our index.  To paraphrase our methodology, this is a best-case-scenario rate that assumes a 780+ credit score and 25% down payment on an owner-occupied purchase loan within the conforming loan limit. 6.50% would be a competitive average. Some lenders will be higher and lower–especially if buydown points come into play.

Borrowers argued the servicer’s $25 charge for expedited payoff quote statements is a “junk fee” and violates federal and state consumer protection laws.

The amount was less than $1 million, but the plot reveals clues that can help spot and fight elderly abuse and other financial crimes.

The Federal Housing Administration is moving to the same standard for the new Uniform Residential Appraisal Report that the conforming market is adopting.

The government-sponsored enterprises’ oversight agency will require the merging mortgage giants to have “appropriate financial and operating safeguards.”

The increase in purchase volume was not enough to offset the drop in refinance application submissions as conventional rates increased week-over-week.

Both the FHFA and the S&P CoreLogic Case-Shiller indices published updated home-price data this week. The takeaway remains the same: prices are rising year-over-year, but at an increasingly slow rate. Case Shiller–the more volatile index–is at the lowest pace in more than 2 years while the broader FHFA index is the lowest since 2012 in year-over-year terms.   FHFA House Price Index (seasonally adjusted, MoM)
June: −0.2%; May was revised to −0.1% from unchanged
YoY: +2.9% from June 2024 to June 2025
All nine census divisions remained positive YoY, with gains ranging from +0.7% in the Mountain division to +6.7% in the Middle Atlantic. Case-Shiller National Index (unadjusted)
YoY: +1.9% in June, down from +2.3% in May
MoM (non seasonally adjusted): +0.4%
MoM (seasonally adjusted): −0.3%
The 20-City Composite posted a −0.3% MoM decline (SA) and a +2.1% YoY gain. The 10-City Composite was slightly firmer at −0.1% MoM and +2.6% YoY. Seasonally Adjusted Comparison:

Index
MoM (SA)
YoY

FHFA HPI
−0.2%
+2.9%

Case-Shiller
−0.3%
+1.9%

Non-seasonally adjusted Case-Shiller readings still show the usual spring/summer uptick, but once adjusted for seasonality the underlying trend is negative. FHFA data also points to weakening, with its second consecutive month of declines.

Steady Gains After Slightly Weaker Start

Bonds began the day in slightly weaker territory, but not for any particular reason (and certainly for no interesting reasons). For those who care about such things, the yield curve continued to steepen (shorter term yields outperforming longer term yields), but this is fairly irrelevant to the mortgage world as MBS are relatively neutral in curve trading terms (durations are short enough not to get hurt when 30yr bonds are hurting, and long enough to avoid getting hurt when 2yr yields are hurting). Speaking of the neutral part of the curve, today’s 5yr auction ended up fairly strong and the reaction helped yields hit their best levels of the day in the afternoon.  That said, all of the above is playing out on a micro scale in the bigger picture.  We’re basically just drifting from one jobs report to the next.

Market Movement Recap

09:32 AM fairly flat overnight with some selling at 8:20am CME open. MBS down 2 ticks (.06) and 10yr up 1.7bps at 4.281

01:05 PM No major reaction to ho-hum 5yr auction.  MBS up 1 tick (.03) and 10yr down 1.5bps at 4.251

03:07 PM holding near best levels with MBS up 2 ticks (.06) and 10yr down 2.5bps at 4.239