Today was a victory for mortgage rates, but not nearly as much of a victory as the underlying bond market would suggest. The good news is that the end result is the lowest average 30yr fixed rate in just over a month.  The other news isn’t bad, per se, but it is a bit confusing.  As we often discuss, mortgage rates are based on bonds because mortgages “turn into” bonds in order to be traded on the secondary market. You don’t need to understand that process in detail to accept that it’s true.  Case in point, here’s a chart* that overlays our average 30yr fixed rate and the most prevalent mortgage-backed security (a bond comprised of a pool of multiple mortgages). Zooming in on Friday, we see bonds breaking lower at a faster pace than mortgage rates. This is actually very normal behavior for mortgage rates–especially when they’re falling into the lowest territory of the past few weeks. If the bond market gains are maintained next week, rates should increasingly be willing to close the gap. Conversely, if bonds bounce in the other direction, rates likely will as well, but they’ll have some cushion and may not need to bounce as quickly. * in both of today’s charts, the right axis shows mortgage-backed securities PRICES. In the bond market, price varies inversely with yield (i.e. higher prices = lower rates). As such, the right axis is inverted (higher values at the bottom) in order to highlight the correlation with rates on the left axis.  Otherwise, the chart would look like a Rorschach test and it would be impossible to detect these subtle changes. 

Existing-home sales pulled back in March, reversing February’s modest gains as affordability pressures and rising mortgage rates continued to weigh on buyer activity. Sales fell 3.6% to a seasonally adjusted annual rate of 3.98 million , slipping 1.0% below year-ago levels. “March home sales remained sluggish and below last year’s pace,” said NAR Chief Economist Lawrence Yun, pointing to weaker consumer confidence and softer job growth as ongoing headwinds. Inventory improved slightly, but concerns about demand persist. Total housing inventory rose to 1.36 million units , up 3.0% from February and 2.3% higher than a year ago, representing a 4.1-month supply of homes. “Inventory remains a major constraint on the market,” Yun said, noting that an additional 300,000 to 500,000 listings would help normalize conditions and ease pressure on buyers. Limited supply continues to support price growth. The median existing-home price climbed to $408,800 , up 1.4% year-over-year and marking the 33rd consecutive month of annual increases. Affordability showed mixed signals. The Housing Affordability Index dipped to 113.7 in March from 117.5 in February but remains above year-ago levels, with improvements recorded across all regions. Regional Breakdown (Sales and Prices, March 2026)

Mortgage applications ticked higher last week, reversing recent declines as easing rates provided a modest boost to activity. The Mortgage Bankers Association (MBA) reported a 1.8% increase on a seasonally adjusted basis for the week ending April 10. Refinance activity led the gain, with the Refinance Index rising 5% from the previous week and now sitting 15% above year-ago levels. The increase follows a pullback in rates, which helped restore some borrower incentive after several weeks of weakening demand. Purchase activity remained soft, with the seasonally adjusted Purchase Index slipping 1% week over week. On an annual basis, purchase applications are down 3% , marking a second consecutive week of year-over-year declines as buyer hesitation persists. MBA’s Joel Kan said, ” This dip in rates helped to support an increase in conventional refinance applications, which had declined for five consecutive weeks. Purchase activity remained subdued as potential homebuyers remained hesitant given the current economic uncertainty, which kept purchase applications below last year’s level for the second consecutive week…” Application composition shifted toward refinancing, with refinance share increasing to 45.5% from 44.3% the prior week. ARM share decreased slightly to 8.4% . FHA share fell to 18.2% , while VA share declined to 15.7% and USDA share held steady at 0.5% .

The bank’s marketing, which hid the nature of its solicitations, led some borrowers to apply for cash-out refis that increased monthly payments, the OCC said.

Federal Reserve Gov. Stephen Miran Thursday said that the Iran war and tariffs will not have long-term impacts on inflation, but did say he is reconsidering his rate cut outlook for the year.

Three-quarters of buyers assume AI has already been embedded in the housing ecosystem, but 55% would prefer to work with a human to secure a mortgage.

While last year was the best for origination income since 2022, annual net servicing revenue for mortgage bankers was approximately 70% below 2024’s level.

This week’s Freddie Mac mortgage rate survey shows rates at the lowest in four weeks, but homebuyers are giving mixed signals even with improved purchase power.

On average, today’s top-tier 30 year fixed mortgage rates are exactly the same as yesterday’s. Rates are driven by the bond market and bonds continue waiting for bigger developments in the Iran war. At the moment, the market is in a sort of limbo as time remains on the 2-week ceasefire. In the meantime, there’s a multitude of lower consequence war-related headlines on any given day. These have caused a bit of back and forth volatility in bonds, but not enough directional movement to nudge rates very far in either direction since Tuesday.  

Volatility Picked Up After a Slow Start

This morning, more than halfway through the international trading day, bonds were on track for the narrowest trading range since February 24th. The low volatility didn’t last. Sellers surfaced in response to several war-related headlines. Bond yields followed oil prices higher from 9am through 1pm ET.  That said, it was still a fairly light day of movement in bonds with MBS only losing about an eighth of a point depending on when you look and 10yr yields up 3bps at 4.31+ in the final hour of trading. 

Econ Data / Events

Continued Claims (Apr)/04

1818.0K vs 1810K f’cast, 1794K prev

Jobless Claims (Apr)/11

207.0K vs 215K f’cast, 219K prev

Philly Fed Business Index (Apr)

26.7 vs 10 f’cast, 18.1 prev

Philly Fed Prices Paid (Apr)

59.30 vs — f’cast, 44.70 prev

Market Movement Recap

08:30 AM Giving up overnight gains before data and no change since. MBS unchanged and 10yr down half a bp at 4.279 (up from lows of 4.265).

10:04 AM 10yr yields moved up 1bp back to unchanged levels of 4.281 and MBS are now down 1 tick (.03)

01:16 PM MBS down an eighth. Lows of the day. 10yr up 3.1bps at 4.315. Highs of the day.

03:43 PM Flat afternoon.  MBS down 3 ticks (.09) and 10yr up 2.4bps at 4.308