Yesterday the key stock indexes began the day under strong pressure, the DJIA -500 points but by days end the indexes not much changed, early this morning the DJIA down over 700 points.
Inflation outlooks are increasing with the US/Iran conflict. Crude oil up over $10.00/barrel since last Friday.
The current view is the Fed can’t lower rates as long as inflation and employment are not declining.
Investors shunning US treasuries in favor of higher yields in other countries. Treasuries are providing more evidence that they’re no longer safe havens during times of crisis. Treasury bonds used to be places for investors to weather geopolitical upheaval, not the case now.
There are no scheduled data points today.
PRICES @ 10:00 AM
10 year note: 4.10% +6 bp
5 year note: 3.68% +6 bp
2 year note: 3.54% +6 bp
30 year bond: 4.73% +5 bp
30 year FNMA 5.0: @9:30 am 99.80 -29 bp (-40 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.28 -18 bp (-19 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 99.91 -21 bp (-21 bp from 9:30 am yesterday)
Dollar/Yen: 157.80 +0.44 yen
Dollar/Euro: $1.1575 -$0.0015
Dollar Index: 99.40 +1.02
Gold: $5,069.10 -$242.40
Bitcoin: 66,314 -2841
Crude Oil: $76.98 +$5.81
DJIA: 47,859 -1045
NASDAQ: 22,294 -455
S&P 500: 6749 -132
Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.
Neutral
The shift buyers were waiting for
Sometimes the stars align in real estate — and right now, they might actually be pointing to buyers in no uncertain terms. According to Realtor.com's Joy Dumandan, the latest Weekly Housing Trends Report, the market is shifting in ways buyers have been hoping for.
Start with rates. Freddie Mac just reported that the average 30-year fixed mortgage fell for the week ending Feb. 26 — to the lowest since September 2022. Compare that to the same week in 2025, and it's no small matter. With spring homebuying season approaching, the timing is everything.
Inventory is also up, though the recovery has slowed. Active listings rose 7.1% year over year, which sounds encouraging until you consider that a year ago, inventory was climbing closer to 30%. Joel Berner, senior economist at Realtor.com, called it "a welcome improvement" but acknowledged the single-digit growth feels underwhelming against the backdrop of the past two years. New-home completions dropped 7.9% in 2025, which means existing homeowner listings will need to kick in. The good news? New listings are up 3.6% year over year and have finally flipped into positive territory for the first time in 2026.
Homes are sitting longer too — the median home spent 68 days on market for the week ending Feb. 21. That's below 70 days for the first time since November, but still 5 days longer than last year. Buyers haven't fully committed yet, even with conditions improving. But it’s certainly a sign that they are now firmly in the driver’s seat.
The headline, however, is price. The median list price fell 2.4% year over year, marking the 18th straight week of flat or negative price growth. It's also the 5th consecutive week where prices are down 2% or more from 2024 levels.
Berner put it plainly: "The price correction we have been anticipating since the pace of sales slowed down and inventory started to recover has finally arrived." Even more telling, the price-per-square-foot metric dropped to -2.4% — a record low — suggesting the decline isn't just a shift toward smaller homes. Prices are genuinely falling.
For buyers who've been watching and waiting, the data is heading in the right direction. And the stars aren’t getting anything but brighter.
Realtor, TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are under pressure today. The MBS market improved by +19 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced moderate volatility last week.
This Week's Rate Forecast: Neutral
These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Jobs, and 3) ISM.
1) Geopolitical: Now that the hammer has dropped on Iran, (which the bond market had already largely accounted for), the bond market will focus on oil prices and length of the conflict.
2) Jobs: We have seemingly been stuck in a low hire but low fire trend. Last month's NFP saw significant revisions downward to the tune of 1M and made the average for 2025 only 15K jobs per month.
3) ISM: ISM Manufacturing was solid when last released and is expected to see another expansionary data point. The bond market will be focusing on the PMIs but really looking at Prices Paid.
This Week's Potential Volatility: High
This morning markets have started under pressure due to rising oil costs. Volatility has started high and will likely stay that way all week.
Bottom Line:
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
High
Today's Rate Forecast: Neutral
These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Jobs, and 3) ISM
Today's Potential Rate Volatility: High
The 10 year note broke below 4.00% last night, traders worrying about the impact of AI on employment and the tensions in the mid-east. The note last broke below 4.00% on October 16th 2025, it traded below it for five days before crawling back above the key technical pivot. Also helping, the weakness in equity markets.
January PPI data was stronger than expected. Month/month overall PPI +0.5% from +0.4% in December, year/year expected +2.9% from 3.0% in December with estimates at 2.6%. Core month/month PPI thought to be +0.3% increased 0.7%, year/year core estimates reported at +4.2 from +3.7% in December. There was no pullback in treasuries on the higher wholesale prices.
At 9:45 am February Chicago purchasing managers index thought to be at 52.5 increased to 57.7.
10 year note: 3.98% -3 bp
5 year note: 3.54% -4 bp
2 year note: 3.41% -3 bp
30 year bond: 4.64% -2 bp
30 year FNMA 5.0: @9:30 am 100.46 +11 bp (+12 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.57 unch (+2 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 100.34 +5 bp (+6 bp from 9:30 am yesterday)
Dollar/Yen: 155.98 -0.15 yen
Dollar/Euro: $1.1814 +$0.0013
Dollar Index: 97.68 -0.11
Gold: $5,238.80 +$44.60
Bitcoin: 65,931 -1483
Crude Oil: $67.20 +$1.99
DJIA: 48,762 -737
NASDAQ: 22,558 -221
S&P 500: 6854 -54
Key economic data this week have been sparse, today though we got weekly jobless claims. Expected at 215K from the revised 208K of the previous week, claims increased by 4k to 212K. Continuing claims, which serve as a proxy for outstanding unemployment, fell by 31,000 to 1,833,000 in the previous week, among the lowest readings in the last 10 months. The report shows what traders are expecting, low hirings and low firings. If employment holds steady it will keep the Fed from lowering the FF rate.
A third round of talks between the US and Iran kicked off today in Geneva. If the US were to levy military action there will be a rush to safety in US treasuries, in the meantime markets will watch closely.
The only thing left on the calendar today, the Treasury will auction $44B of 7 year notes at 1 pm. Recent Treasury buying has not been aggressive with most terms seeing weak demand and foreign buying slowing.
There are more countries off-loading US debt as the dollar weakens and debt servicing becomes more an issue, most of the selling coming from countries that are not linked close to the US. Allies bought $463.9B of Treasuries in 2025, the biggest annual net purchase since at least 2016, according to Bloomberg’s analysis of US Treasury data. Non-aligned countries sold $673B of Treasuries between 2016 and 2025.
10 year note: 4.02% -3 bp
5 year note: 3.59% -2 bp
2 year note: 3.46% -2 bp
30 year bond: 4.67% -3 bp
30 year FNMA 5.0: @9:30 am 100.34 +6 bp (+6 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.55 +1 bp (+3 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 100.28 +6 bp (+6 bp from 9:30 am yesterday)
Dollar/Yen: 155.94 -0.44 yen
Dollar/Euro: $1.1810 unch
Dollar Index: 97.68 -0.02
Gold: $5,184.80 -$41.40
Bitcoin: 67,916 -1277
Crude Oil: $64.24 -$ 1.18 (OPEC talking about increasing output)
DJIA: 49,622 +140
NASDAQ: 22,974 -178
S&P 500: 6922 -24
The MBA reported mortgage applications for last week increased 0.4% after increasing 2.8% the prior week. Purchase applications down 4.7% after -2.7% the prior week, refinance apps +4.1% following +7.1%. Not much improvement given the decline in 30 year interest rates to a four-year low.
At 1 pm Treasury will auction $70B of 5 year notes. Recent Treasury auctions have not been aggressively bid with the dollar declining and US debt is hovering in the background. Occasionally there will be some comments about the debt, but they quickly fade, no one in Washington or NY want to make much of it but it is one key reason long term US interest rates (10s and 30s) will find resistance.
10 year note: 4.06% +2 bp
5 year note: 3.63% +3 bp
2 year note: 3.49% +3 bp
30 year bond: 4.70% +2 bp
30 year FNMA 5.0: @9:30 am 100.29 -6 bp (-10 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.52 -1 bp (-4 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 100.22 unch (-1 bp from 9:30 am yesterday)
Dollar/Yen: 156.50 +0.59 yen
Dollar/Euro: $1.1787 +$0.0014
Dollar Index: 97.88 +0.04
Gold: $5,189.60 +$13.30
Bitcoin: 66,247 +1773
Crude Oil: 65.47 -$0.16
DJIA: 49,308 +134
NASDAQ: 23,127 +263
S&P 500: 6930 +40
This morning stock indexes trading better, rates up a little. This morning December Case/Shiller home price index month/month +0.5% with forecasts of +0.3%; year/year 20 cities +1.4% as expected.
Chicago Fed President Austin Goolsbee this morning. He echoed what most all Fed officials have been saying recently that rate cuts aren’t appropriate until there’s more evidence that inflation is on its way down. Goolsbee reminded how the Fed in 2020 believed inflation at the time was transitory and cut rates only to see inflation remained elevated for much longer than the Fed believed. Goolsbee noted that policymakers “have been burned by assuming transitory inflation” in the past and shouldn’t make the same mistake again. “I feel that front-loading too many rate cuts is not prudent in that circumstance,” he said in remarks before the National Association for Business Economics at its annual gathering in Washington, D.C. “People express that prices are one of their most pressing concerns. Let’s pay attention. Before we cut rates more to stimulate the economy, let’s be sure inflation is heading back to 2%.” Last week December PCE inflation data was slightly higher than forecasts.
Fed Governor Chris Waller, a strong advocate for lower rates, at the same conference commented on the strength of the employment sector that recent employment metrics have been better than anticipated. He espoused, if the jobs picture continues to improve, that would further lessen the case for cuts, though he said he isn’t convinced that the January nonfarm payrolls data wasn’t “more noise than signal.”
Tonight, the State of the Union address, that should keep markets stable through the day.
At 10 am the Conference Board consumer confidence data. The sentiment index expected at 88.0 from 89.0 (revised from 84.5) in January, the index increased to 91.2.
10 year note: 4.18% -1 bp
5 year note: 3.72% -2 bp
2 year note: 3.47% -1 bp
30 year bond: 4.87% unch
30 year FNMA 5.0: @9:30 am 99.69% +5 bp (-10 bp from 9:30 am Friday)
30 year FNMA 5.5: @9:30 am 101.43 +5 bp (-6 bp from 9:30 am Friday)
30 year GNMA 5.0: @9:30 am 99.73 +5 bp (-8 bp from 9:30 am Friday)
Dollar/Yen: 156.76 -0.07 yen
Dollar/Euro: $1.1683 -$0.0038
Dollar Index: 98.69 +0.27
Gold: $4,434.70 +$105.40 (safety move)
Bitcoin: 93,265 +1994
Crude Oil: $58.05 +$0.73
DJIA: 48,922 +553
NASDAQ: 23,401 +166
S&P 500: 6898 +40
The great markdown
They say just about anything will sell — for the right price, that is. And right now, in markets stretched thin from pandemic-era wishful thinking, sellers in some areas are finally getting the memo.
Realtor.com's Snejana Farberov identified 10 major metro areas — mostly in the South and West — where listings are most frequently seeing three or more price reductions before finding a buyer. Austin, Texas, topped the list, with 22.2% of January listings having been cut at least 3 times. That's nearly double the national average of 10.7%.
Austin-based researcher Vaike O'Grady offers important context. Austin's pandemic-era boom was fueled by extraordinary demand and a flood of out-of-state buyers. Now that the inflationary fever has broken, she says sellers are "finally coming to terms with what a normal market feels like." As of November, Austin carried 10.5 months of supply — second highest among the 50 largest U.S. metros, trailing only Miami. More supply means more choices, more time, and more negotiating power for buyers.
San Antonio came in second at 22%, followed by Tampa at just under 21%. Count Indianapolis, Jacksonville, Dallas, Orlando. Portland, Phoenix, and Denver and the picture becomes clear, as Florida broker Cara Ameer puts it plainly: "If there aren't showings or offers, no matter what kind of marketing you do, it is all about the price." She notes that many of these sellers aren't testing the market — they're moving because life demands it. They’re divorcing, downsizing, making a move to assisted living or unloading a rental property at long last. These are people who need to sell.
Ameer describes Florida's market correction as slowly deflating balloon, with values that were once propped up by rock-bottom interest rates and pandemic migration now settling back to earth. Higher borrowing costs, HOA fees, and insurance premiums have accelerated the deflation.
Realtor’s senior economist Jake Krimmel calls these markets "a who's who of buyer-friendly metros," where demand remains soft and inventory keeps building. In Austin, the median listing sits at $455,000 and is staying on the market nearly 10 days longer than a year ago. In Tampa, the typical home priced at $399,727 is lingering more than two weeks longer than last January — the biggest annual slowdown among the top 10.
For buyers, that's the headline to watch. "This is an opportunity to pick up a property at a realistic price without the competition and pressure like there used to have been," Ameer says. She expects spring to bring even more inventory — and even more leverage for buyers who are paying attention now. In a more balanced market the asking price is just a high water mark starting point.
Mortgage rates are moving sideways today. The MBS market worsened by -7 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.
These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Manufacturing and 3) The Consumer.
1) Geopolitical: The bond market will be taking a long view of the new Tariff entanglement, the President's State of the Union address, and probable Iran military action.
2) Manufacturing: Have we actually turned the corner? After more than 3 years of contraction in the manufacturing base, we have had a recent run of expansionary manufacturing data. This week get Chicago PMI, Factory Orders, Richmond Fed and Dallas Fed.
3) Consumer: Consumer Sentiment on Tuesday will be key. It is expected to rise to 88.0, readings above 90 can be negative for rates.
This morning markets are moving sideways. Volatility has started at moderate levels but will likely increase later in the week.
The day began unchanged from Friday in the bond market, stock indexes in futures market trading prior to the 9:30 am ET open were lower. Last week markets were faced with a number of key data points on Friday; PCE inflation, Q4 GDP, and the University of Michigan consumer sentiment index.
Fed Governor Christopher Waller said his decision on whether to support an interest-rate cut at the March FOMC meeting will hinge on upcoming labor-market data. “But if the good labor market news of January is revised away or evaporates in February, it would support my position at the FOMC’s last meeting, that a 25-basis-point reduction in the policy rate was appropriate, and that such a cut should be made at the March meeting.” His remarks are nothing new, Waller has been leaning for more cuts the last couple of meetings. Markets are not looking for a rate cut from the Fed until at least April, and data will dictate if that becomes a consensus.
Unrest continues in Iran. No new news from the US administration about the possibility of US attacking Iran.
Looking for a quiet session today unless we get new information about Iran. A major assault by the US will support US treasuries.
10 year note: 4.06% -3 bp
5 year note: 3.63% -2 bp
2 year note: 3.48% unch
30 year bond: 4.71% -1 bp
30 year FNMA 5.0: @9:30 am 100.32 +1 bp (+7 bp from 9:30 am Friday)
30 year FNMA 5.5: @9:30 am 101.56 unch (+2 bp from 9:30 am Friday)
30 year GNMA 5.0: @9:30 am 100.17 -2 bp (+3 bp from 9:30 am Friday)
Dollar/Yen: 154.63 -0.42 yen
Dollar/Euro: $1.1802 +$0.0018
Dollar Index: 97.63 -0.16
Gold: $5,207.60 +$126.70
Bitcoin: 65,638 -1713
Crude Oil: $67.03 +$0.55
DJIA: 49,194 -432
NASDAQ: 22,775 -111
S&P 500: 6880 -29
December PCE inflation increased more than expected across the spectrum. Month/month overall PCE estimates were +0.3%, reported +0.4% and up from +0.2% in November. Year/year overall +2.9% against expectations of +2.8% and up from 2.7% in November. The core PCE ex-food and energy month/month thought to be +0.3%, increased 0.4% and up from +0.2% in November, year/year core increased to 3.0% with forecasts of +2.9% and up from 2.8% in November.
December personal income in line with estimates at 0.3% month/month; personal consumption expenditures month/month +0.4% against forecasts of +0.3%.
Q4 2025 GDP weaker than forecasts at +1.4% with forecasts of 2.8% and down from 4.1% in Q3, it is the advance release, the final a month from now. The contributors to the increase in real GDP were increases in consumer spending and investment. These movements were partly offset by decreases in government spending and exports. Imports also decreased. Considering full 2025, the economy expanded 2.2%, below 2.8% in 2024, and primarily reflecting increases in consumer spending and investment. The GDP Price Deflator was up 3.6%.
At 10 am the University of Michigan final February consumer sentiment index expected at 57.0 from 57.3.
Also at 10 am November new home sales expected at 735K reported at 758K. December new home sales thought to be 728K reported at 745K.
10 year note: 4.08% unch
5 year note: 3.66% +2 bp
2 year note: 3.48% +2 bp
30 year bond: 4.71% unch
30 year FNMA 5.0: @9:30 am 100.25 unch (+4 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.54 +1 bp (+3 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 100.14 +3 bp (+3 bp from 9:30 am yesterday)
Dollar/Yen: 155.42 +0.44 yen
Dollar/Euro: $1.1764 -$0.0010
Dollar Index: 97.25 +0.03
Gold: $5,069.40 +$72.00
Bitcoin: 67,069 -20
Crude Oil: $66.14 -$0.39
DJIA: 49,281 -114
NASDAQ: 22,682 -1
S&P 500: 6857 -5