“The difference between me and Superman is that he has super vision. I require supervision.” We’re halfway through the third quarter: Will your company require supervision or super vision to go forward? Speaking of which, when did our business start with the catchy slogans? Stay alive in ’25? Stay in the mix in ’26. It’ll be heaven in ’27. How about, “Try to earn a little revenue every day, day after day.”? In Mortgage Land, I received this note. “Rob, I tuned in recently to a webinar of an investment banking economist talking about the lending industry in the 3rd and 4th quarters of 2025. All they could talk about were predictions of doom and gloom: increased delinquencies, increasing inventory for sale, fewer borrowers qualifying (especially with student loans coming due), more borrowers ‘under water,’ Agency uncertainty, more sellers refusing to budge on their asking prices, and higher rates. Are you hearing similar things?” Never listen to the experts! Watch the facts! No, volumes aren’t setting the world on fire, but most companies have right sized and seem to be doing “moderate to good.” Individuals and families still want to own a home and stop renting and still want someone to help them save money on their overall debt picture. (Today’s podcast can be found here and this week’s is sponsored by ICE. By seamlessly integrating best-in-class solutions, ICE optimizes every stage of the loan life cycle, setting the standard for innovation, artificial intelligence, efficiency, and scalability, and defining the future of homeownership. Today’s has an interview with Total Expert’s Joe Welu on how the company is leveraging its new Agentic AI Sales Assistant to transform loan officer productivity, strengthen customer relationships, and drive mortgage volume, while examining the evolving opportunities and risks AI presents to lenders in 2025 and beyond.)

Friday proved to be the weakest day of the week for the underlying bond market and, thus, the highest day of the week for mortgage rates. Retail sales data was generally stronger than expected, especially when considering revisions and when focusing on the “core” numbers that strip out more volatile categories such as autos/fuel and building materials. Bonds (which underlie rates) didn’t move too much at first, but began losing ground amid the tougher Friday afternoon trading conditions. When bonds lose ground, it implies upward pressure on rates. Several lenders reissued slightly higher rates in the afternoon. This technically made Friday the highest mortgage rate day of the week. That said, these rates are still much closer to long term lows than most of the past 10 months. In fact, apart from the past 9 business days, today’s rates would still be the lowest since early October 2024. [thirtyyearmortgagerates]

Real estate investor sentiment bounced back from two quarters of decline, but lingering fears around tariffs, interest rates still weigh on many buyers’ minds

Funds parked at a major Federal Reserve facility dropped to the lowest level in more than four years, putting in focus the amount of cash banks have sitting at the US central bank, a measure of liquidity conditions.

The 30-year fixed rate mortgage fell by 5 basis points, with the Consumer Price Index showing muted inflation and jobs data still influencing the market.

While overall performance looks solid, the data shows the weight of economic concerns may be weighing on some borrowers, the Mortgage Bankers Association said.

Fannie Mae has issued guidelines for how mortgage companies should apply temporary buydown funds in workout situations and clarified notification requirements.

Bonds Hold The Range Despite More Data-Driven Volatility

At 0.9, not only did today’s PPI crush the 0.2 forecast, but it’s also the highest reading since post-covid hyper-inflation by a wide margin.  And while there’s always a chance it will be revised to something less alarming next month, it was enough to do noticeable damage to bonds today.  Before the data, 10yr yields were knocking on the yield floor at 4.20%.  This afternoon, they’re up closer to 4.30%.  Things could have been even worse if not for the fact that the PCE components in the PPI data suggested a much less onerous impact on the PCE data that will come out in 2 weeks. Nonetheless, it will be enough to keep eyebrows raised regarding the extent to which tariffs are hindering a return to the 2% inflation target (something that will unfortunately be up in the air for many months). 

Econ Data / Events

Core PPI

0.9 vs 0.2 f’cast, 0.0 prev

Annual Core PPI

3.7 vs 2.9 f’cast, 2.6 prev

Jobless Claims

224k vs 228k f’cast, 227k prev

Market Movement Recap

08:43 AM stronger overnight but losing ground after PPI.  MBS unchanged and 10yr nearly unchanged at 4.237

11:14 AM Additional weakness now.  MBS down an eighth and 10yr up 3.7bps at 4.278

11:45 AM MBS down 6 ticks (.19) and 10yr up 5bps at 4.291

01:38 PM Off the weakest levels.  MBS down 5 ticks (.16) and 10yr up 4.8bps at 4.289

“I somehow managed to make it through high school math while only being able to remember even numbers. What are the odds?!” As the California MBA’s Western Secondary breaks up here in Southern California, numbers are dancing in everyone’s head. Volumes, margins, gain on sale, concessions, and extensions. (I even have a numerical riddle that stumped me below instead of the usual joke; even the solution had me befuddled.) A veteran LO once told me that she always looks at the coffee a potential client is drinking. Who is going to grouse more about .125 in rate, someone who makes their own coffee for less than $1 a cup or someone who buys it every day? At $5.74 per cup, a daily Starbucks latte costs $2,095 per year. Had you placed that amount in a high-yield savings account with a 4 percent return, you’d end up with $2,179 after one year, a modest $84 gain. Much larger gains could be realized over time if this money had been invested in equities. (Today’s podcast can be found here and this week’s is sponsored by ICE. By seamlessly integrating best-in-class solutions, ICE optimizes every stage of the loan life cycle, setting the standard for innovation, artificial intelligence, efficiency, and scalability, and defining the future of homeownership. Today’s has interview with Regal Point Capital’s Vijay Marolia on understanding how blockchain technology is seeping its way into mortgage transactions and how to prepare for the shift to a more digital landscape.) Products, Services, and Software for Lenders and Brokers

Mortgage rates hit fresh long term lows yesterday with the average top tier 30yr fixed rate at the best levels since October 3rd, 2024.  There wasn’t anything exceptional about the movement yesterday or on any other day in the past week.  Rather, it was the jobs report at the beginning of the month that accounted for a 2-day rally.  Rates have been holding near longer-term lows with little fanfare ever since. Because mortgage rates are based on bonds, the absence of fanfare reflects an absence of volatility in the underlying bond market. Today presented the biggest threat to that calm trend since the August 1st jobs report. Unlike the jobs report, today’s inflation data caused a volatile reaction in an unfriendly direction. In other words, the economic data put upward pressure on rates. The catch is that rates were set to start the day at even lower levels before the data came out.  The net effect is another day of fairly minimal change.