The past 2 weeks have seen very little volatility for mortgage rates.  After being near 6% for a week in early January, rates rose abruptly to 6.21% (avg top tier 30yr fixed) on January 20th in response to geopolitical drama. They’ve generally descended since then, but in slow, measured steps.   Today’s result was actually a 0.01% increase in the MND rate index, but that’s not terrible news considering last week ended at 2 week lows. In the bigger picture, apart from the super low week in early January, recent rates have been in line with the lowest levels in years. Last week’s most noticeable move came in response to a trio of employment-related reports on Thursday. That suggests the market will be more than willing to react to any interesting developments in this Wednesday’s big jobs report (a single report that is orders of magnitude more important than last Thursday’s reports combined).

Most nights, Treasuries trade in fairly low volume in a fairly narrow range.  Last night’s range wasn’t much wider than normal, but most of the movement happened all at once. It was also accompanied by much higher volume than normal. These are surefire signs of the market reacting to data or news. In the current case, that news involved Chinese regulators asked banks to limit their exposure to Treasuries. This sounds more meaningful than it is, and domestic traders agreed when the trading day officially began at 8:20am ET.

Trump administration officials are exploring opening an antitrust investigation into US homebuilders as the White House sharpens its focus on tackling the country’s housing affordability crisis.

The Housing for the 21st Century Act includes provisions covering policy, manufactured homes and rural infrastructure introduced in a prior Senate proposal.

The FHFA chief told Fox an offering could be done near term – but may not be – while a Treasury official addressed conservatorship questions at an FSOC hearing.

Mortgage loan officer licensing saw its first rise since 2022 as Fannie Mae projects $2.4T in 2026 volume. Experts eye a market reset amid improving affordability.

The brokerage alleges Zillow uses “anticompetitive tactics” to bar listings that haven’t been posted to a local multiple-listing service, or MLS, within 24 hours of them being publicly marketed.

Potential Signs of GSE Buying as MBS Outperform

It was an uneventful day when it comes to scheduled data/events, and also pretty boring for the bond market in general. Most of the market’s volatility continues playing out in stocks, commodities, crypto, etc. The most notable development for our area of focus was the MBS outperformance. Specifically, MBS were up about 2 ticks (.06) in price in the 2pm hour while 5 and 10yr Treasuries were down at least 6 ticks (.19) in price. Some of the Treasury weakness could be viewed as an artificial byproduct of yesterday afternoon’s Treasury-specific late-day rally, but even if we factor that out, MBS are still outperforming. With no official buying schedule/report from GSEs, such instances of outperformance are some of the only clues we have as to MBS purchases taking place.  This doesn’t matter for any particular reason, but it addresses a frequently asked question.

Econ Data / Events

Consumer Sentiment (Feb)

57.3 vs 55 f’cast, 56.4 prev

Sentiment: 1y Inflation (Feb)

3.5% vs — f’cast, 4% prev

Sentiment: 5y Inflation (Feb)

3.4% vs — f’cast, 3.3% prev

U Mich conditions (Feb)

58.3 vs 54.9 f’cast, 55.4 prev

Market Movement Recap

08:34 AM modestly weaker overnight. MBS down 2 ticks (.06) and 10yr up 1.9bps at 4.199

11:14 AM MBS outperforming as Treasuries weaken.  10yr up 3.7bps at 4.217. MBS still down only 2 ticks (.06).

02:30 PM Best levels of the day for MBS, up 1 tick (.03). 10yd down 2.9bps at 4.21

Mortgage application activity moved lower again last week, extending the pullback from January’s earlier burst of demand as weather disruptions and softening purchase activity weighed on overall volume. The Mortgage Bankers Association (MBA) reported that applications declined 8.9% for the week ending January 30. The Market Composite Index fell 8.9% on a seasonally adjusted basis, while rising 4% on an unadjusted basis, highlighting the continued volatility in weekly application data following a period of unusually strong activity earlier in the month. This week, purchase activity took center stage and drove much of the weakness. The seasonally adjusted Purchase Index dropped 14% from the prior week, while unadjusted purchase applications increased 2% but were only 4% higher than the same week one year ago—lowest levels since November 2025 and the weakest annual increase since April 2025. Joel Kan, MBA’s Vice President and Deputy Chief Economist, pointed to Winter Storm Fern as a key factor, noting that widespread snowfall likely hampered homebuying activity across large parts of the country. Refinance volume also declined, though by a smaller margin. The Refinance Index fell 5% from the previous week but remained 117% higher than a year earlier. Despite mortgage rates edging modestly lower, Kan noted that the change was not significant enough to materially boost refinance demand.

In the bigger picture, the past two and a half weeks have been marked by a very narrow range in the bond market. Because bonds dictate mortgage rates, the latter have also been in a narrow range with average top tier 30yr fixed rates of 6.15-6.20%.  Yesterday’s employment-related data helped bonds improve. Many lenders made mid-day improvements to mortgage rates yesterday, but there was enough of a tailwind that the average lender was lower again this morning–now in line with the lower boundary of the recent range. Next Wednesday’s labor market data is a higher stakes event–one that could either bring rates back to the multi-year lows seen in January or push them up to the highest levels since December.