Despite the elevated volatility risk heading into the weekend, mortgage rates are starting the week in exactly the same territory compared to Friday afternoon. As always, our rate tracking refers to top-tier 30-year fixed rates for the average lender. The absence of meaningful movement in the underlying bond market is a testament to an increasingly high bar of relevance for war-related news. Specifically, the Iran war is the main source of inspiration not only for oil prices, but also for the bonds that dictate interest rates.  Earlier in the war, almost any headline had a visible impact on bonds. But now it’s only the most significant developments. Those are harder to come by in late April as investors are basically waiting for either an official and permanent ceasefire, or a catastrophic re-escalation. Anything in between has proven to be fairly uninteresting when it comes to bond market influence.

Modest Weakness, But Range Persists

Bonds lost ground today, but not for any particular reason. Most importantly, there was no major reaction to the lack of progress in peace talks over the weekend (which would have been hard considering the talks didn’t happen). Earlier in the war, this sort of development would have had a more noticeable impact. At this point, markets are waiting on the biggest news. Until that news breaks, bonds are content to wander aimlessly in the same sideways range that’s been intact for the entire month. For those who insist on assigning blame for today’s modestly higher yields, the absence of peace talks was worth maybe a third of it. Beyond that, we’d consider things like the Treasury auction cycle and asset allocation among investors chasing all-time highs in stocks. 

Market Movement Recap

09:13 AM Bonds modestly weaker on stalled peace talks. 10yr up 1.4bps at 4.317 and MBS down 3 ticks (.09).

11:48 AM MBS down 5 ticks (.16) on the day and an eight from the highs. 10yr up 2.6bps at 4.329

02:22 PM 10yr up 3.3bps at 4.335 and MBS still down 5 ticks (.16)

The word of the day is “stalled.” You can’t get far reading top news stories over the weekend without seeing it in reference to the negotiations that looked at least somewhat possible on Friday afternoon. At that time, official word was that Witkoff/Kushner were heading to Pakistan on Saturday morning to meet with Iran’s FM Araghchi, but the US contingent never made the trek. Now this morning there are additional reports that a resumption of military operations is being considered. One would think this would make for a big hit to financial markets, but oil prices and bond yields are only modestly higher. And stocks are actually in slightly stronger territory, once again pushing new all-time highs.

The government guarantor aims to distinguish delinquencies reported as a result of a Federal Housing Administration rule change from broader market trends.

But in its earnings release, parent company Hilltop Holdings warned its full year 2026 results are going to be impacted by things outside of its control.

Delinquencies also showed signs of overall improvement in March, despite an increase in foreclosure numbers, ICE Mortgage Technology said.

The Long Island-based regional bank, which has been in turnaround mode for two years, reduced its earnings per share guidance for 2026 and 2027. It cited an expected decrease in net interest income due to higher levels of payoffs and paydowns in commercial real estate.

U.S. Attorney for the District of Columbia Jeanine Pirro said in a social media post Friday morning that the Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell, clearing a path for Kevin Warsh to be confirmed as Powell’s replacement.

Similar Volatility But in a Friendlier Direction

The bond market saw a roughly identical amount of volatility on each of the last 2 days of the week, but Friday’s version played out in a friendlier direction. Headlines suggested improved prospects of peace negotiations over the weekend. While there is no scheduled talk with the US and Iran, high level reps from both sides are currently–or soon will be–in Pakistan. But the war headlines only get part of the credit. Bonds also got a boost from news that the DOJ dropped its case against Powell, thus paving the way for a Warsh confirmation. In the market’s view, this improves the odds of a rate cut in 2026, even if only slightly.  2yr yields rallied much more than 10s, as one would expect when markets are trading Fed rate expectations. 

Market Movement Recap

08:49 AM Roughly unchanged after modest 2-way volatility. MBS up 2 ticks (.06) and 10yr down 0.4bps at 4.321

09:40 AM moving into weaker territory. MBS down 1 tick (.03) on the day and over an eighth from the early price plateau. 10yr up 1.3bps at 4.338

10:19 AM 10yr at lows of day, down 2.2bps at 4.303. MBS up 6 ticks (.19). Move follows new of DOJ potentially dropping Powell case

01:19 PM Mostly sideways since last update. MBS up an eighth and 10yr down 1.5bps at 4.311

Short version: The Pending Home Sales Index remains in the same low, narrow, sideways range that’s been intact for 3 years. The good news is that there’s been a reliable floor. The bad news is that the top of the range lines up with the historic lows seen in 2010 (April 2020 notwithstanding).  Longer version: Pending home sales moved modestly higher in March, breaking from recent softness but remaining within a relatively subdued range. The National Association of Realtors’ Pending Home Sales Index (PHSI) increased 1.5% month over month while declining 1.1% compared with the same time last year. The monthly gain suggests some underlying demand resilience, even as mortgage rates remained elevated. However, on an annual basis, contract activity continues to reflect a market still working through affordability constraints and uneven buyer participation. NAR Chief Economist Lawrence Yun noted that, ” Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand… A greater supply of inventory will help translate that demand into more home sales. ” He added that demand remains particularly rate-sensitive among first-time and younger buyers, underscoring the need for additional supply in smaller, more affordable homes. Regional performance remained mixed. The Northeast and South posted monthly gains, while the Midwest and West saw declines. On a year-over-year basis, only the South recorded an increase, with the remaining regions continuing to trend lower — highlighting ongoing regional divergence in housing activity.