“Depression is merely anger without enthusiasm.” People flying around the nation have probably observed, or have heard, a change in the mood of airport security screeners. It turns out that the Trump Administration outlawed unions at TSA. Change is afoot. In my recent travels around the country, it is clear that LOs have adapted their origination based on price and opportunity. For example, Deephaven’s Tom Davis points out that, “non-QM loans should be done by design, not by decline.” (He is waiting for the trademark on that.) Originators who focus on real estate agents believe that the top 5 percent of agents do 90 percent of the business… and ask other LOs “Where are you focusing your marketing efforts?” In terms of new business, the refinance share of market mortgage applications released last week reached nearly 44 percent, primarily to pay for remodeling and to pay off high interest rate credit card debt. Are you adapting? (Today’s podcast can be found here and this week’s is sponsored by TransUnion. TransUnion offers thousands of B2B solutions designed to address the unique needs of mortgage lenders, especially for their identity-focused, data-driven mortgage insights and solutions. Hear an interview with AMC Encore’s Jordan Chapman on the journey of an appraiser turned AMC leader, exploring career challenges, industry insights, and the evolving role of women in mortgage and valuation, plus what it takes to get an AMC approved in today’s market.) Lender and Broker Products, Software, and Services

Conventional 30yr fixed mortgage rates hit their lowest levels in months last Tuesday morning, with the average lender right in line with levels from mid October or early December. After that, rates rose steadily for the next two days and leveled off on Friday. While the bounce was small enough to leave a vast majority of 2025’s improvement intact, it nonetheless raised the risk that the bond market would need more convincing before rates were willing to keep following the broader sentiment suggested by ongoing stock losses. Specifically, stocks are speaking to economic concerns. When stocks drop quickly enough, investors can seek safer havens, such as bonds.  When demand for bonds increases, rates fall, all other things being equal. Monday has been reassuring in that regard. Bonds are once again paying attention to weakness in stocks–it just happened to take a bigger drop in stocks that we saw last week. Despite the improvement in rates, we would still expect some resistance to the idea of rapid improvement unless the economic data begins to sound the same warnings as equities markets. On that note, the most relevant econ data on the near-term horizon is Wednesday’s Consumer Price Index (CPI), the first of the broad measures of inflation in the U.S. and one of the biggest potential sources of volatility for rates.

The Trump administration intended to gut the Consumer Financial Protection Bureau through a mass workforce reduction, which could be a smoking gun in a court battle with the bureau’s union.

The postponement would pertain to Federal Housing Administration-insured single- and multifamily loans and other final determination dates that have not passed.

Federal Reserve Chair Jerome Powell emphasized the need for patience amid uncertainty over the Trump administration’s policies, saying there would be no immediate rate changes but that the Fed would proceed carefully.

More than two-thirds of the counties most at risk of a housing downturn were concentrated in five states, according to a new report from Attom.

American lumber producers have alleged that the Canadian lumber system amounts to a subsidy — a charge Canadians deny — and the countries have fought over tariffs on those products for decades.

The average mortgage lender was briefly able to offer noticeably lower rates this morning compared to yesterday’s latest levels. Credit goes to this morning’s jobs report for coming in a bit weaker than expected. What do jobs have to do with rates? Rates are based on bonds and bonds are heavily influenced by the state of the economy. Today’s jobs report is traditionally the single most important economic report as far as bonds are concerned. In general, weaker economic data begets stronger bonds and lower rates. The fact that rates didn’t make a huge move in the morning was our first clue that the jobs report was open to interpretation–or at least open to being superseded by the day’s other developments.  That became obvious in the PM hours as stocks surged and bonds weakened.  When bonds lose enough ground on any given day, mortgage lenders will “reprice” to higher rates, as has been the case today.  After the reprice, the average lender is roughly where they were yesterday–still not a bad outcome in the bigger picture, even if not as good as the morning hours suggested. [thirtyyearmortgagerates]

Bonds Give Up AM Gains After Powell Speech

Bonds made it through the jobs report in good shape with modest gains intact heading into the PM hours. Things changed after that, with the most obvious turning point coinciding with Fed Chair Powell’s speech.  If traders had been hoping to hear Powell express some concern over economic momentum, they were disappointed when he said “the economy is fine. It doesn’t need us to do anything, really.” With that, bonds moved into negative territory and Fed Funds Futures moved back near the week’s weakest levels (indicating slightly lower odds of the next rate cut happening in May). 

Econ Data / Events

Nonfarm Payrolls

151k vs 160k f’cast, 125k prev

Unemployment Rate

4.1 vs 4.0 f’cast, 4.0 prev
unrounded: 4.1396%

Participation Rate

62.4 vs 62.6 f’cast

Market Movement Recap

08:56 AM slightly stronger to start with additional gains after NFP.  MBS up almost a quarter point and 10yr down 5.2bps at 4.218

01:49 PM swooning now after consolidating into the noon hour.  MBS down 3 ticks (.09) and 10yr up 3.5bps at 4.306

03:49 PM Slightly weaker and now holding mostly sideways.  MBS down 5 ticks (.16) and 10yr up 4.5bps at 4.316

Today’s jobs report was a mixed bag with the most important number also being the most boring.  Headline job creation came in at 151k vs 160k, which is so close as to not even matter. As a result, bonds lost some ground in the first few minutes after the data. Other parts of the report helped offset the “decent” job count. Unemployment rose to 4.1% from 4.0, but the drop in the participation rate (0.2) means employment declined by 0.3% instead of 0.1%. Other measures of unemployment (U-6) were at the weakest levels since 2021 and jumped the most since 2020.

Bonds quickly changed course and made moderate gains.  Now at the 9:30am NYSE open, those gains are ebbing, but we’re still in slightly stronger territory for now.