Of the two inflation reports out this week, PPI is the lesser of the two in terms of importance, but it came in far enough below forecasts to prompt some bond buying to start the day. PPI is a complex report relative to CPI, but one of the simplest takeaways from today’s data is that wholesalers drastically decreased the extent to which they were passing along higher costs via margins. Another simple takeaway is that a lot of today’s apparent downward surge had to do with the previous report’s big upward surge. Even after revisions, last month’s PPI rose at 0.7%, thus creating a low bar for today’s data to come in soft. Looked at another way, the average monthly PPI over the past two months would still be 0.3% (or 3.6% annually) when taking the average of the super hot July and super cool August numbers.

Mortgage applications jumped 9.2% last week, according to the Mortgage Bankers Association’s survey for the week ending September 5, 2025. The results included an adjustment for the Labor Day holiday. “Mortgage rates declined for the second consecutive week as Treasury yields moved lower on data indicating that the labor market is weakening. The 30-year fixed rate decreased to 6.49 percent, down 20 basis points over the past two weeks to the lowest since October 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher. Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace. There was also a pickup in ARM applications, both in terms of level and share, as ARM rates were considerably lower than fixed rate loans, which typically benefits homebuyers.” The Refinance Index rose 12% from the previous week and is 34% higher than the same week a year ago. The Purchase Index increased 7% on a seasonally adjusted basis and is now 23% higher than last year’s level. The refinance share of total mortgage applications increased to 48.8%. ARM share rose to 9.2%. FHA share decreased to 18.5%, while VA share climbed to 15.3%. Mortgage Rate Summary:
30yr Fixed: 6.49% (from 6.64%) | Points: 0.56 (from 0.59)
15yr Fixed: 5.70% (from 5.84%) | Points: 0.55 (from 0.84)
Jumbo 30yr: 6.44% (from 6.58%) | Points: 0.48 (from 0.39)
FHA: 6.27% (from 6.31%) | Points: 0.68 (from 0.74)
5/1 ARM: 5.77% (from 5.90%) | Points: 0.63 (from 0.34)

“Rob, I hate it when mom and dad fight. Will this Pulte/Bessent, FHFA/Treasury tussle impact mortgage rates?” Probably not; it hasn’t so far. Director Pulte is certainly in the news. Occupancy isn’t a partisan issue, right?! FHFA Director Pulte, who continues to point out potential fraud by Fed. Governor Lisa Cook (who a Federal judge ruled yesterday could stay in her post), has two close relatives who have declared the same owner-occupied status on two homes in two different states! Don’t blame me: read about it in CNBC and Reuters. “Mark and Julie Pulte, the father and stepmother of Bill Pulte, President Donald Trump’s appointee as director of the Federal Housing Finance Agency, since 2020 have claimed so-called ‘homestead exemptions’ for residences in wealthy neighborhoods in both Michigan and Florida…” What about news closer to regular lending? Chase launched some publicity with a limited-time “mortgage rate refinance sale.” The Chase promotion is on rate-and-term and cash-out refinances through Sunday, Sept. 21. Customers must lock in their refinancing rate during this period to earn the discount. How much of a discount? According to Chase, “Discounts will vary by mortgage product and location.” (Today’s podcast can be found here and this week’s are sponsored by Indecomm. Streamlining operations with the genius blend of automation, AI, and services. Achieve practical digital transformation and real operational impact with Indecomm’s purpose-built mortgage solutions. Hear an interview with MCT’s Phil Rasori on shifting coverage in response to policy and economic changes, to the expansion of ARM and non-QM products, the growing role of AI in hedging and analytics, evolving tech freeing up staff for strategic work, and the rising demands placed on modern capital markets departments.)

Besides upsizing the IPO, Figure’s announced its technology is supporting Longbridge Financial’s senior-specific home equity line of credit rollout.

The Foreclosure Abuse and Prevention Act has reportedly stopped one company from buying loans in the New York, others are said to be paying less for them.

An atypical summer for home price growth and mortgage rates approaching their lowest point in 12 months could entice sidelined buyers, Cotality said.

Mortgage experts say the government can tweak closing costs, offer tax incentives around home sales and reduce interest rates by various means.

Investors are anticipating the annual preliminary benchmark revision of US payrolls data. Further signs of softening could further raise expectations for Fed easing.

It had to happen at some point. After spending 4 straight days of setting new 11-month lows, mortgage rates finally moved higher today, but the headline is much scarier than reality. In fact, many borrowers won’t see any detectable difference from yesterday’s latest levels as the average lender’s top tier 30yr fixed rates moved a mere 0.01% higher. This preserves the entirety of the improvement seen last Friday when rates dropped sharply in response to the downbeat jobs report.  There haven’t been major economic reports so far this week (the bonds that underly mortgage rate movement tend to react when important economic reports come in much higher or lower than expected). That changes over the next 2 days. Both Wednesday and Thursday bring important inflation updates via the producer and consumer price indices, respectively. Of the two, Thursday’s Consumer Price Index (CPI) is the bigger potential source of volatility. Taken together, they will help flesh out the inflation considerations that will help the Fed hone in on a pace for the rate cuts that are expected to start in 2 weeks. [thirtyyearmortgagerates]

Post-NFP Rally Momentum Fades

When bonds string together several successive days of improvement, the probability of a corrective bounce increases. This is especially true as the rally covers more ground and more time. With 10yr yields dropping nearly 30bps over 4 consecutive sessions, a corrective bounce was a relevant concern, and it arrived today. That said, it was also fairly mild as far as corrective bounces go. On a separate note, many market watchers are confused as to why bonds would lose ground despite a historically large preliminary NFP benchmark revision (released this morning). But this revision pertains to the March 2024 through March 2025 time frame. Not only is that irrelevant to present day market movement, it also fell within most analyst’s range of expectations.

Econ Data / Events

Annual NFP Revision Estimate (March 2024-March 2025)

-911k vs -818k prev

Market Movement Recap

10:05 AM No real reaction to NFP revision estimates.  Modest overnight weakness remains.  MBS down an eighth and 10yr up 2.4bps at 4.063

10:41 AM A bit more weakness in Treasuries with 10yr up 3.7bps at 4.077.  MBS down an eighth.

02:11 PM Recovering slightly after 3yr auction.  10yr up 2.7bps at 4.066 and MBS down 3 ticks (.09).

04:02 PM Weakest levels.  MBS down 6 ticks (.19) and 10yr up 4.2bps at 4.081