The average top tier 30yr fixed mortgage rate hit its highest levels in 2 weeks yesterday. The caveat was that the range has been very narrow during these 2 weeks. As such, by remaining unchanged versus yesterday, today’s rates are part of the same narrow range (6.15-6.20% for MND’s index). There were two relevant economic reports this morning as well as an update from the Treasury department regarding borrowing expectations. The latter is important for interest rates because the level of Treasury issuance is a primary ingredient in determining almost any consumer lending rate in the U.S. Higher issuance would increase the supply of bonds.  Higher bond supply would decrease the price of bonds. And when bond prices fall, rates move higher, all else equal. This morning’s update kept issuance unchanged in the short term, but noted the probability of increased issuance in the next fiscal year.  This put some upward pressure on rates early in the day, but a tame report on the services sector helped bonds find their footing. Flat bonds = flat rates. The end.

No Whammies in Wednesday’s Data. JOLTS Rescheduled for Thursday

With the big jobs report on hold until next Wednesday, this morning’s ADP/ISM duo had to do most of the week’s heavy lifting in terms of important econ data. The response was underwhelming, at best. ADP was a complete non-event, but also fairly close to consensus. ISM was mixed and generally helped bonds hold their ground with yields moving down from highs at 10am. The day’s range remained inside yesterday’s and there were minimal losses by the 3pm close. The JOLTS data that was scheduled for Tuesday will now be coming out on Thursday morning.

Econ Data / Events

ADP Employment

22k vs 48k f’cast, 41k prev

ISM Biz Activity (Jan)

57.4 vs 56.0 prev

ISM N-Mfg PMI (Jan)

53.8 vs 53.5 f’cast, 54.4 prev

ISM Services Employment (Jan)

50.3 vs 52.3 f’cast, 52.0 prev

ISM Services New Orders (Jan)

53.1 vs  57.9 prev

ISM Services Prices (Jan)

66.6 vs  64.3 prev

Market Movement Recap

08:24 AM No major reaction to ADP data.  MBS down 2 ticks (.06) and 10yr up 0.7bps at 4.27

10:03 AM Weaker ISM Services and a slight rally in bonds.  10yr was 4.29, but now down to 4.272.  MBS are 2 ticks (.06) off the lows, but still down 2 ticks on the day.

02:53 PM MBS down 3 ticks (.09) and 10yr up 1.3bps at 4.276

Today’s two key reports are ADP Employment (8:15am ET) and ISM Services (10am ET).  The former came out a bit softer than expected, but bonds didn’t react.  15 minutes later, Treasury released financing estimates for the quarter. These were as-expected and unchanged from the previous quarter, but Treasury noted that issuance would likely need to increase in fiscal year 2027.  Higher issuance = higher rates, all else equal. This wasn’t necessarily a surprise or even “new” info, but the reminder may have been worth a bit of selling at 8:30am.  ISM remains the day’s biggest source of potential volatility. 

Less than 45% of mortgage residential properties in the United States were equity-rich last quarter, a 1.5-percentage-point drop from the third quarter.

Mortgage rate trends in late 2025 led the lender into the red in the fourth quarter, even as Newrez originations picked up from the prior quarter and year.

As measured by earnings available for distribution at the REIT, Two posted a profit of $0.26 per share but this was well below the consensus estimate of $0.37.

The partial US government shutdown is on track to end later Tuesday after the House passed a funding deal President Donald Trump negotiated with Senate Democrats, overcoming opposition from both ends of the political spectrum.

Lennar Corp. and Taylor Morrison Home Corp. are among the firms that have worked on the proposal, which calls for builders to sell entry-level homes into a pathway-to-ownership program funded by private investors, according to people familiar with the plan.

Mostly Sideways. Volatility Elsewhere

The legend of the bond market’s extreme apathy is increasingly making the rounds in financial circles. Bond issuance, inflation, and economic strength are not seen surging enough to put huge upward pressure on longer-term rates. And without a big downturn in 2 of those 3 variables, there’s no major impetus for a big drop in rates. So we wait (and wait and wait) while bonds gyrate in micro-ranges.  Add today to the list. It might have been more volatile if we had the econ data that was postponed due to the shutdown, but JOLTS wouldn’t be enough to singlehandedly change the narrative. Stocks and commodities were volatile in contrast, but with limited correlation to bonds. The government funding bill passed the house and a reopening is assumed for Wednesday, but Friday’s jobs report will nonetheless not be coming out on Friday.

Econ Data / Events

ISM Manufacturing Employment (Jan)

48.1 vs — f’cast, 44.9 prev

ISM Manufacturing PMI (Jan)

52.6 vs 48.5 f’cast, 47.9 prev

ISM Mfg Prices Paid (Jan)

59.0 vs 60.5 f’cast, 58.5 prev

Market Movement Recap

09:46 AM Sideways to slightly weaker overnight in Treasuries with 10yr now up 1bp at 4.285.  MBS outperforming, up 1 tick (.03) on the day.

12:34 PM Not much movement. MBS down 1 tick (.03) and 10yr up 1.5 bps at 4.29

03:14 PM off weakest levels. MBS unchanged and 10yr down 0.4bps at 4.271

Regarding rate movement, the bond market often does the Fed’s job for it, and so whatever the Fed’s Open Market Committee actually does is almost an afterthought. The partial U.S. Government shutdown is hurting economic activity, and companies like Newrez are posting and how the shutdown is impacting lending. The FHA Office of Single Family Housing released FHA INFO 2026-05 and some of its mortgage insurance programs “will be operational but with limited services. Under a funding lapse, FHA’s actions and decisions about the operations that continue are governed by the U.S. Constitution…” The shutdown and chatter from the hallways will be the focus of today’s Advisory Angle at 3PM ET where Sue Woodard brings the conversation straight from the floor of the MBA’s IMB Conference. (Today’s podcast can be found here and this week’s are sponsored by Truework, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. Today’s features an interview with TLS’ Will Pendleton and Calque’s Jeremy Foster on how the Buy Before You Sell model helps brokers remove timing and contingency risk for today’s buyers, and why transparent, well-integrated solutions like this are increasingly becoming essential tools for brokers navigating more competitive and complex housing markets.) Products, Services, and Software for Brokers and Lenders