As it turns out, not everyone has a loan on their house. In fact, 40 percent of U.S. homes don’t have a mortgage, per the Census Bureau. Should I repeat that? 40%. (Here’s a nice map with state-level information.) What are you, or your company, doing about it? Are you even seeing those potential clients in your database? Regarding new homes… Let’s see, if we’re building 1.5 million housing units a year, and we’re short 6 million housing units, that’s… let’s see… carry the 1… 4 years. Oh, and during that time, housing stock is destroyed by floods, winds, fires, earthquakes… Any other questions? Meanwhile, long gone are the days of the phone “ringing off the hook”: the pandemic was nearly six years ago, and with it, 30-year rates in the 3s. Industry pundits will tell you that there are still too many lenders and too many LOs given where volume (in units) will be this year. And if you get the deal, it will be with low margins. (Today’s podcast can be found here. This week’s are sponsored by Polly. Polly operates the industry’s only vertically integrated capital markets platform, purpose-built to maximize profitability through precision cost reduction, margin expansion, and real-time, loan-level attribution and profitability analysis. Today’s has a dark interview with Johns Hopkins’ Dan Ye on how 90 percent of human capital will be replaced in the next 10 years through AI, and how you can potentially ward off the impending doom.) Products, Programs, and Software for Lenders

Mortgage rates have been effectively unchanged for 5 straight days now. During that time, the MND 30yr fixed rate index hasn’t moved by more than 0.01%. The average borrower would see almost exactly the same terms on any of these days. The absence of volatility isn’t much of a surprise given the time of year and the lack of important economic data. But that changes tomorrow with the release of two labor market reports and ISM’s service sector report. Individually, none of these are as heavy hitting as Friday’s forthcoming jobs report, but if they all sing a similar tune, it could definitely get rates moving (for better or worse).  Specifically, if the data is stronger, it would likely push rates higher and vice versa.

A range trading theme has dominated the bond market since the most recent high yield on December 10th and the most recent low the following day. 100% of trading since then has fallen inside those boundaries (4.10-4.20% in terms of 10yr yields). Even though volume has made a resounding post-holiday return, there’s little for market watchers to do until we see a breakout. Wednesday and Friday’s econ data continue to be the best bets as far as catalysts go.

The accusations, relating to the lender’s marketing programs, including trips for brokers as things of value, stem from a larger racketeering complaint.

Keefe, Bruyette & Woods attributes Fannie Mae and Freddie Mac portfolio growth for the narrower spreads, but other reasons include lower volatility.

Yields gravitated back toward session lows — down three to four basis points on the day — after the December ISM manufacturing gauge unexpectedly dropped.

The impact of extreme weather remains top of mind for many, with a majority of homeowners citing it as a factor behind purchase or relocation considerations.

First Federal Bank stretched its retail mortgage operations into Louisiana and Mississippi, following its expansion into the Midwest and Arizona in 2023.

Bonds Improve Back to Pre-Holiday Levels

While there was some relevant econ data today (ISM Manufacturing), it didn’t have an obvious impact on the bond market. Nonetheless, volume was back at pre-holiday levels. Notably, Dec 11(day after Fed day) was the last day of 2025 that wasn’t affected by progressively lighter participation. 10yr yields closed at 4.15% on that day–the same level as today. The winter holidays don’t always work out this perfectly, but it couldn’t have been any more perfect this year. From here, we can plug back into the incoming econ data and read more significance into any major responses. 

Econ Data / Events

ISM Manufacturing Employment (Dec)

44.9 vs — f’cast, 44.0 prev

ISM Manufacturing PMI (Dec)

47.9 vs 48.3 f’cast, 48.2 prev

ISM Mfg Prices Paid (Dec)

58.5 vs 59.0 f’cast, 58.5 prev

Market Movement Recap

10:01 AM Moderately stronger overnight and at best levels after ISM data. MBS up 2 ticks (.06) and 10yr down 2bps at 4.171

02:57 PM Off the best levels, but still close. MBS up an eighth and 10yr down almost 3bps at 4.162

04:01 PM Sideways at best levels. MBS up 5 ticks (.16) and 10yr down 3.6bps at 4.155

The two days of 2025 with the lowest rates were September 16th and October 28th. Both days happened to be the Tuesdays that preceded Fed rate cuts. On both occasions, those rate cuts were delivered with other comments from the Fed that the bond market didn’t like.  The net effect is/was two very obvious dips and spikes. The second half of December saw the average 30yr fixed mortgage rate inch closer and closer to those previous lows, but we’re still not quite there yet. Today was just another day in that saga as the average lender held right in line with Friday’s latest levels. Bottom line: at current levels, any day that rates spend holding steady or moving microscopically lower will technically result in the lowest rates since October 28th. It would take a more noticeable improvement to break below that floor. When and if that happens, rates will be the lowest since early 2023. [thirtyyearmortgagerates]