Tomorrow I head from Boise to Jackson for the Mississippi Mortgage Banker’s Fall Conference. Certainly a topic in my email in-box and at events is how Freddie and Fannie’s market share is ebbing, and at noon PT, 3PM ET, Capital Markets Wrap (presented by Polly) will explore if F&F are fading from prominence amid the rise of alternative products, whether the market is getting ahead of itself in expecting mortgage rates to come down and what that means for lenders and investors, take a look at ARM demand and pricing, and discuss how hedging strategies shift during Fed easing cycles. At “the top of the funnel,” all of the news about occupancy fraud inspired attorney and Mortgage Musings author Brian Levy to provide his thoughts about the nuances of the topic in his latest Mortgage Musing. Sign up here to receive Levy’s Musings delivered directly to your email or you can find it on the Chrisman Commentary’s Thought Leadership page. And while we’re at the “top of the funnel,” according to Curinos’ new proprietary application index, refinances increased 47 percent in August while the purchase index decreased 2 percent for August as a whole. August 2025 funded mortgage volume decreased 4% YoY and decreased 6% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. We drill into this data further here. (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 Call Equity’s Mel Lund on how operations and sales can assist one another to drive origination volume.)

Mortgage application activity eased last week, but not in a statistically significant way.  One might be inclined to note a very slight uptick in mortgage rates, but it’s just as fair to say that rates held steady near longer-term lows.  The Mortgage Bankers Association’s weekly survey showed a 1.4% decline in the seasonally adjusted Composite Index for the week ending August 15, 2025. “Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. VA applications fell 16%, while FHA refinance applications increased as FHA rates remained comparatively competitive. The Refinance Index decreased 3% week-over-week but remains about 23% higher than the same week a year ago. The Purchase Index was essentially flat (+0.1% seasonally adjusted) and is running about 23% ahead of last year’s level. The refinance share of total mortgage applications slipped to 46.1%. ARM share decreased to 8.6%. FHA share rose to 19.1%, while VA share declined to 13.4%. Mortgage Rate Summary:
30yr Fixed: 6.68% (from 6.67%) | Points: 0.60 (down from 0.64)
15yr Fixed: 5.96% (from 5.93%) | Points: 0.70 (up from 0.63)
Jumbo 30yr: 6.64% (from 6.70%) | Points: 0.60 (up from 0.56)
FHA: 6.39% (from 6.40%) | Points: 0.66 (down from 0.77)
5/1 ARM: 6.01% (from 5.80%) | Points: 0.63 (down from 0.67)

Bonds Brace For More Data-Driven Volatility

Today’s ISM Manufacturing data played the role of coalmine canary today, and although it’s not the most vigorous canary anyone’s ever seen, it also wasn’t dead. That wasn’t good for bonds today as ISM is viewed as a good early indicator at times when the market is waiting for a certain shoe to drop (in this case, tariff/policy/uncertainty impact on econ data). ISM is also often heavily traded due to its proximity to the big jobs report (in this case, the following morning). If nothing else, the market’s willingness to react to economic data once again is fully confirmed.

Econ Data / Events

Jobless Claims

241k vs 224k f’cast, 223k prev

Continued Claims

1916k vs 1860k f’cast, 1833k prev

ISM Manufacturing PMI

48.7 vs 48.0 f’cast

ISM Prices Paid

69.8 vs 70.3 f’cast, 69.4 prev

Market Movement Recap

08:33 AM MBS up just over an eighth and 10yr yields are down 3.5bps at 4.126 after claims data.

10:23 AM weaker after ISM.  MBS down 2 ticks (.06) and 10yr up 3.6bps at 4.196

12:27 PM MBS now down 6 ticks (.19) and 10yr up 6.7 bps at 4.227.

02:30 PM MBS now down a quarter point and 10yr up 7.7bps at 4.238

Consolidation Continues Ahead of CPI

February 19th through March 3rd marked an exceptionally directional rally for bonds. The following day brought the big blow-up in German debt, and the start of the consolidation in US rates. Granted, if domestic economic data been weaker, the rally may have tried to soldier on, but after the jobs report came out near consensus, that was that.  As has been the case for several years, the next major report after the jobs report is CPI, and CPI is arguably even more important at the moment.  This isn’t to say we’re guaranteed to see a big reaction–only that the potential is there, should the data come in much higher or lower than forecast.  As for today, it was just another in the ongoing consolidation with bonds determined to move back to the higher end of the recent sideways range after moving lower yesterday.

Econ Data / Events

Job Openings

7.74m vs 7.63m f’cast, 7.508m prev

Job Quits (higher is worse for bonds)

3.266m vs 3.197m prev

Market Movement Recap

09:39 AM Initially stronger early in the overnight session, then selling steadily.  MBS down just over an eighth of a point.  10yr up 2.2bps at 4.232

01:29 PM Weaker into the PM hours but leveling off now.  MBS down an eighth on the day and 10yr up 1.5bps at 4.227

02:26 PM 10yr yields are up 6.5bps at the highs of the day (4.276).  MBS down 10 ticks (.31)