Mortgage rates began the new week with a fairly quick jump back into the low 6% range (top tier 30yr fixed rate for the average lender). With the news cycle very focused on developments in Iran, most coverage attempts to correlate geopolitical events with market movement. The only legitimate way to do this would be to say that upward pressure on oil prices is translating to higher inflation implications and therefore higher rates. At many times in the past, this would be a solid conclusion. To some small extent, a case could even be made for this correlation accounting for a portion of today’s weakness. But most of the big, directional moves in oil prices over the past 2 days have failed to correlated with big moves in the bond market.  Even when we zoom out to wider frames of reference, we see counterintuitive developments over the past several years. When oil peaked around $120/bbl in 2022, 10yr Treasury yields were around 3%. When oil fell sharply into 2023, bond yields continued moving up and have held flat for the last few years even as oil gently declined. Nonetheless, there are also pockets of correlation where we can see the two lines moving in the same direction. The only problem with that is that oil and rates can both respond to a third variable: economic strength. On that note, this week’s economic data may be just as big of an influence on rate momentum while geopolitical developments represent a wild card that can create a backdrop of volatility.

MBS numbers at both soared in January, when Trump directed the enterprises to accumulate more bonds, but a decline in loans shrunk Freddie’s total number.

Though changes to bank capital rules previewed by Federal Reserve Vice Chair for Supervision Michelle Bowman in February are being viewed as welcome, experts say other more significant hurdles — not all of them regulatory — are keeping banks on the sidelines of mortgage servicing and lending.

Mortgage One is accused of using an artificial intelligence voice agent for outbound solicitations, recommending a cash-out refi to the plaintiff in the case.

New York is seeking $21 billion in federal grants for a construction project at Sunnyside Yard, which would allow the city to build 12,000 new affordable homes.

Not all borrower scenarios are equal. When it comes to evaluating the risk of small landlords, lenders need to focus on a few specific factors.

Bonds Cap Stellar Week/Month With Strongest Close

Bonds ended the week/month at their strongest levels with 10yr yields breaking below the 4.0% floor to close at 3.95+.  In addition to the low outright levels, the journey was accomplished with minimal volatility along the way. This is potentially surprising given this morning’s much higher PPI numbers, but as discussed in the AM commentary, PPI is notoriously volatile and hasn’t had a noticeable impact since 2024. Next week brings the typical early month, big ticket econ data (ISM, ADP, and the jobs report).

Econ Data / Events

Core PPI m/m (Jan)

0.8% vs 0.3% f’cast, 0.7% prev

PPI m/m (Jan)

0.5% vs 0.3% f’cast, 0.5% prev

PPI y/y (Jan)

2.9% vs 2.6% f’cast, 3% prev

Market Movement Recap

08:34 AM No reaction despite balmy PPI.  MNS up 1 tick (.03) and 10yr down 2.2bps at 3.982

01:03 PM MBS up 2 ticks (.06) and 10yhr down 3.5bps at 3.969

03:27 PM MBS up 2 ticks (.06) and 10yr down 3.7 bps at 3.967

Mortgage application activity edged ever-so-slightly higher last week, with the Mortgage Bankers Association (MBA) reporting an increase of 0.4% on a seasonally adjusted basis for the week ending February 20. Refi applications continue to do the heavy lifting. The Refinance Index increased 4% from the previous week and was 150% higher than the same week one year ago. Conventional refinance applications rose 5% for the week, while VA refinances jumped 26%, as rates declined to their lowest levels since September 2022. Notably, rates have moved even lower this week and have held these new multi-year lows in very stable fashion. If history is any guide, this should lead to an even higher refi index next week. Purchase demand moved lower, falling 5% on a seasonally adjusted basis, though activity remains 12% higher than the same week one year ago.  Joel Kan, MBA’s Vice President and Deputy Chief Economist, attributed the modest increase in overall activity to declining Treasury yields, which helped push the 30-year fixed rate to its lowest level in several months. The composition of activity shifted further toward refinances. The refinance share of total applications increased to 58.6% from 57.4% the prior week, while ARM share held steady at 8.2% . FHA share decreased to 16.1% , VA share rose to 18.7% , and USDA share remained unchanged at 0.4% .

At this point, it is getting a bit repetitive to bring up “the lowest rates in more than 3 years”–something that was officially the case twice this week. If we give rates credit for stably holding these long-term lows (and we should!), then every day this week has been the best in more than 3 years. Here’s the specific record: at no other time in the history of our rate index have rates begun a week at long-term lows and experienced so little volatility. There was a somewhat similar stretch of 4 days in March 2019, but rates had only hit a 2 year low at the time. On average, when rates hit the lowest levels in more than a year, the next 4 business days see a range of 0.07-0.08%. That makes this week’s 0.01% range truly special.

Home price appreciation pulled back slightly at the end of last year, according to December data from both FHFA and S&P/Cotality Case-Shiller. The reports reinforce the message that prices continued to appreciate modestly through the end of 2025. FHFA’s seasonally adjusted House Price Index shows home prices up 1.8% year-over-year in the fourth quarter of 2025 and 0.8% quarter-over-quarter . On a monthly basis, prices rose just 0.1% in December , suggesting continued but subdued momentum. On a 3-month basis (which helps smooth out month-to-month volatility while still capturing more granular movement), appreciation has recovered from the early 2025 dip and is back in a normal pre-pandemic range. State- and regional-level data underscore the ongoing divergence. House prices rose in 41 states over the past year, led by North Dakota (+6.4%), Delaware (+6.3%), Illinois (+6.1%), Wisconsin (+5.7%), and Michigan (+5.5%). Florida posted the largest annual decline (-2.7%). Among census divisions, the East North Central region led with a 5.0% annual gain, while the Mountain division recorded a slight decline (-0.2%). The Case-Shiller U.S. National Home Price Index posted a 1.3% year-over-year gain in December, down slightly from 1.4% previously and marking the weakest full-year performance since 2011. After seasonal adjustment, the national index rose 0.4% month-over-month . The 20-City Composite showed a 1.4% annual gain , unchanged from the prior month, and increased 0.5% month-over-month on a seasonally adjusted basis.