There are three distinct reasons that could account for bonds paradoxically rallying overnight despite oil prices remaining high and an absence of meaningful de-escalation in the Iran war.

The most notable development has been the correction in Fed Funds Futures that began on Friday morning and extended modestly into this morning.

Less objectively quantifiable but still likely enough for us to call it out last week was pre-weekend positioning. Specifically, it has made good sense for bonds to be defensive heading into a weekend and recover on Monday if there was no major escalation. Last but not least, it’s March 30th, so we’d always need to consider month-end positioning could be creating some of its own momentum for bonds. The net effect is a 3/8ths gain in MBS and a 7bp drop in 10yr yields (currently just under 4.37). Much like last week, this is a nice little recovery on a Monday, but by no means evidence of a broader reversal.

Fannie Mae and Freddie Mac’s portfolios were collectively $10 billion larger than in January, spurred in part by their mortgage-backed securities directive.

Lowering minimum standards and using a 2018 proposal as a basis for change may be the quickest path, according to Donald Layton, Freddie Mac’s CEO from 2012 to 2019.

The latest rise in property tax collections at the end of last year continued a nine-quarter streak of increases, according to the National Association of Home Builders.

Employers who use Nayya’s agentic AI platform can provide Foyer, a dedicated 401(k) for homeownership, as a benefit that helps its employees buy a home.

In three separate appearances Thursday, Fed Gov. Lisa Cook, Gov. Michael Barr and Vice Chair Philip Jefferson said they are worried that U.S. involvement in the war with Iran could drive up inflation, leading them to conclude that interest rates should remain steady in the near term.

The real estate investment trust declared an all-cash offer of $10.80 per share from CrossCountry superior to the fixed stock exchange ratio bid from UWM.

Some Resilience After AM Weakness

10yr yields are set to end the week at the highest levels since last July, but those were even higher highs earlier this morning. From roughly 9am-1130am ET, bonds recovered all of the day’s losses in a move that was led by adjustments to Fed rate hike expectations.  Yes, we can/should call it that now because there are no longer any rate cut expectations based on futures trading. Instead, there’s indecision about holding steady vs a small chance of rate hikes. War headlines remain the dominant focus and weekends continue to offer a higher concentration of risk for financial markets.

Econ Data / Events

Consumer Sentiment (Mar)

53.3 vs 54 f’cast, 56.6 prev

Sentiment: 1y Inflation (Mar)

3.8% vs 3.4% f’cast, 3.4% prev

Sentiment: 5y Inflation (Mar)

3.2% vs 3.2% f’cast, 3.3% prev

Market Movement Recap

10:13 AM Additional weakness overnight. MBS down 6 ticks (.19) and 10yr up 3.2bps at 4.452

11:39 AM Bonds turning green.  MBS up 2 ticks (.06) and 10yr down almost 1bp at 4.412

03:48 PM Drifting back into weaker territory, very gradually. MBS down 1 tick (.03) and 10yr up 2bps at 4.44

Mortgage application activity declined for the second consecutive week as rising interest rates continued to weigh on demand. The Mortgage Bankers Association (MBA) reported a decrease of 10.5% on a seasonally adjusted basis for the week ending March 20. Both major components moved lower. The Refinance Index fell 15% from the previous week, though it remained 52% higher than the same week one year ago.  Purchase activity also softened, with the seasonally adjusted Purchase Index declining 5% and running 5% above year-ago levels. According to MBA’s Joel Kan, persistently elevated Treasury yields—driven in part by higher oil prices and inflation concerns—pushed mortgage rates higher across the board. The average 30-year fixed rate climbed to its highest level since October 2025, further eroding refinance incentives and dampening purchase demand. The composition of activity shifted further away from refinances. The refinance share of total applications decreased to 49.6% from 52.3% the prior week, while ARM share increased slightly to 8.1% . FHA share rose to 19.7% , VA share declined to 15.9% , and USDA share edged up to 0.5% . Mortgage Rate Summary:
30yr Fixed: 6.43% (from 6.30%) | Points: 0.65 (from 0.63)
15yr Fixed: 5.83% (from 5.66%) | Points: 0.80 (from 0.73)
Jumbo 30yr: 6.45% (from 6.39%) | Points: 0.56 (from 0.34)
FHA: 6.15% (from 6.08%) | Points: 0.75 (from 0.70)
5/1 ARM: 5.75% (from 5.65%) | Points: 0.68 (from 0.67)

There were mixed blessings in the mortgage rate world today. The bad news is that today’s rates are just a bit higher than yesterday’s, resulting in another 8 month high. The good news is that things were looking quite a bit worse earlier in the morning. Mortgage lenders prefer to set rates once per day even though those rates are dictated by movement in the underlying bond market. If bonds move enough, lenders will change rates mid-day. Today was one of those days and, fortunately, the change was in a friendly direction.  Before the improvement, the average lender’s top tier 30yr fixed rate was roughly 6.7%, but afterward, only 6.64%.