Mortgage rates continue operating in an excruciatingly narrow range near their lowest levels of the past few years. Yesterday was the 6th best day of 2025. Today is tied for 7th place after rates moved 0.01% higher on average. While the underlying bond market is fully open today, it’s a slow time of year in terms of volume and volatility. Bigger movement becomes more likely by the end of next week thanks to the return of important economic reports and stronger trader participation after holiday absences. 

Modest Recovery From Morning Weakness

Bonds were slightly weaker this morning in a move that looked like it might have been significant when compared to yesterday’s narrow range.  But in a just-barely-wider context, today’s volatility was just as inconsequential as almost any of the days in December so far.  With that, we’ll continue to count down to next week’s bigger-ticket data and more robust trader participation. 

Econ Data / Events

Case Shiller Home Prices-20 y/y (Oct)

1.3% vs 1.1% f’cast, 1.4% prev

CaseShiller 20 mm nsa (Oct)

-0.3% vs — f’cast, -0.5% prev

FHFA Home Price Index m/m (Oct)

0.4% vs 0.1% f’cast, 0% prev

FHFA Home Prices y/y (Oct)

1.7% vs — f’cast, 1.7% prev

Chicago PMI (Dec)

43.5 vs 39.5 f’cast, 36.3 prev

Market Movement Recap

10:10 AM Moderately weaker overnight and sideways so far. MBS down an eighth and 10yr up 2.7bps at 4.135

12:02 PM bouncing back a bit. MBS down only 1 tick (.03) and 10yr up 1.2bps at 4.119

03:14 PM Still mostly sideways. MBS down 2 ticks (.06) and 10yr up 2.1bps at 4.128.

If we turn up the magnification on our market-watching microscopes, it may seem like something important happened in the bond market overnight. 10yr yields were up by more than 3bps at one point and MBS fell just over an eighth of a point. These may seem like big swings relative to yesterday’s narrow range, but this is actually a rather tame expression of year-end volatility. To understand a bit more about month/quarter/year-end trading motivations, check out our primer on the topic. 4 trading days ago, 10yr yields hit the top of the prevailing range at 4.20.  Yesterday, they were close enough to the lower end of that range (4.10). Nothing that occurs inside these boundaries is remotely significant–just noise.

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With another holiday closure on deck and light calendar of events, the rate market is off to another uneventful start this week. In fact, the average lender barely budged from last Friday. But it was enough for MND’s 30yr fixed rate index to tick down by 0.01%. This is the lowest level since October 28th–just barely edging out the lows seen on November 25th. There were only 5 days in November and one day in September with lower rates.  Before that, you’d have to go back to September 2024 to see anything lower. As always, there’s never any way to know what’s next for rates. The outcome of next week’s economic data could certainly have a say in that. What we do know is that the present zone has been a recurring lower boundary for the range going all the way back to late 2022.

Uneventful And Slightly Stronger

Although volumes picked up a bit versus Friday, no one would confuse the late December bond market from exhibiting any unexpected signs of life. A stronger open in Europe made for a modest improvement overnight and almost all of the domestic session was spent treading water at those same levels. 

Econ Data / Events

Pending Home Sales

79.2 vs 74.9 prev

Market Movement Recap

10:12 AM Modestly stronger overnight and holding sideways so far. MBS up 2 ticks (.06) and 10yr down 1.6bps at 4.117

03:38 PM Minimal volatility all day. MBS up 2 ticks (.06) and 10yr down 1.9bps at 4.114