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Highest Yields in 10 Months on War Headlines and Auction Concessions

Highest Yields in 10 Months on War Headlines and Auction Concessions Because CPI came out slightly higher today and because of its status as a bigger potential market mover, many rate watchers will assume that's the reason 10yr yields closed at their highest level since last July. But bond yields were actually lower in the first 40 minutes post-CPI. It wasn't until newswires cited Trump saying he's in no hurry to end the war that yields began spiking (and stocks began selling). It's also worth noting that yields were already up to 4.44% ahead of CPI and only moved 2bps higher by the close (i.e. not much intraday movement in the grand scheme). Could CPI have been a factor for some traders? Sure, but the majority of post-CPI volume suggests the data was largely taken in stride. Econ Data / Events m/m CORE CPI (Apr) 0.4% vs 0.3% f'cast, 0.2% prev m/m Headline CPI (Apr) 0.6% vs 0.6% f'cast, 0.9% prev y/y CORE CPI (Apr) 2.8% vs 2.7% f'cast, 2.6% prev y/y Headline CPI (Apr) 3.8% vs 3.7% f'cast, 3.3% prev Market Movement Recap 08:30 AM No major reaction to CPI. 10yr up 2.9bps at 4.438 and MBS are down only 2 ticks (.06). 09:39 AM MBS down 5 ticks (.16) and 10yr up 4.2bps at 4.451 02:03 PM Weakest levels. MBS down a quarter point and 10yr up 5.2bps at 4.461

Source: Mortgage News Daily | 12 May 2026 | 8:06 pm

Mortgage Rates Match Highest Level Since March

When the Iran war was in its initial escalation phase, the initial surge in markets took the top-tier 30yr fixed rate to 6.64% for the average lender by March 27th. Rates moved more than 0.30% lower by mid April as peace prospect improved.  The third phase of rate movement began in late April and has generally involved a jump back up toward 6.5% with the first 2 days of the present week accounting for a move from 6.42% to 6.56%. That matches the highest level seen since March 27th. Bonds yields (which underlie rates) have followed longer-term oil prices to their highest recent levels as Trump said the U.S. is not in a hurry to end the war.  [thirtyyearmortgagerates]

Source: Mortgage News Daily | 12 May 2026 | 7:28 pm

Best Ex, Equity, Servicing, AI, Valuation Tools; Job Market's Mixed Signals; Purchase Market Dragging?

If you’re hoping that the summer is going to bring a trend of purchase market prosperity, I hope you’re right but there are indications otherwise. Rocket Companies’ CEO reported its highest profit in four years, but CEO Varun Krishna told investors that the company’s real-time data shows the spring homebuying season is not delivering the volume increase that historical patterns would suggest. The cost of war, oil prices, and homebuyer psychology are heavy (let’s hope temporary) weights. And Optimal Blue’s latest Market Advantage report finds mortgage lock activity cooling in April after a strong first quarter. Total rate-lock volume declined 9 percent month over month (though it was up 11 percent on a year-over-year basis). Purchase demand was down about 2 percent in March but up more than 9 percent from April 2025. (Refinance activity cooled more sharply, easing refi share of total production to just 23 percent.) (Today’s podcast can be found here and this week’s ‘casts are sponsored by nCino, and its Mortgage Suite that supports a modern homeownership journey. One of the major themes emerging from nSight 2026 this week is how lenders can move beyond traditional workflows through AI, intelligent automation, and connected lending experiences. Hear an interview with Truework’s Ethan Winchell on how rising income volatility is reshaping homebuyer eligibility and what lenders must do to adapt to a more complex and less predictable income landscape.) Lender and Broker Products, Software, and Services

Source: Mortgage News Daily | 12 May 2026 | 2:52 pm

Slightly Hotter CPI No Problem For Bonds

This morning's Consumer Price Index (CPI) came in slightly hotter than expected with core inflation running 2.8% annual vs 2.7% forecasts and overall inflation at 3.8% vs 3.7%. Bonds have traded both ways after the data, but after 20 minutes, yields were actually LOWER by a hair. What gives? We know traders are trading the data based on volume. The stalemate could have to do with core goods (a proxy for tariff-related inflation) moving lower. The Fed has called this category out as a prerequisite for considering rate cuts again. The rest of the data was less friendly but housing played an outsized role. This is actually better for the rate outlook because traders think housing will ultimately trend lower over time. That said, the non-housing metric (supercore, .454% monthly and 3.32% annually) remains far too high for a rate cut discussion to be on the table for the foreseeable future.

Source: Mortgage News Daily | 12 May 2026 | 1:29 pm

Over Before it Began

Over Before it Began Monday proved to be a boring trading day despite the moderately big sell-off. Yields actually didn't move much during the domestic session. In fact, they didn't move during the overnight session either. Because the day's market-moving news happened on Sunday before trading began, it was instantly priced in at the open, and the rest of the day was spent drifting sideways to slightly weaker. Bonds ultimately underperformed their prevailing correlation with oil prices. We're not reading anything into this--especially in light of the Treasury auction cycle possibly adding some concessionary weakness.  Econ Data / Events Existing home sales (Apr) 4.02M vs 4.05M f'cast, 3.98M prev Market Movement Recap 09:03 AM Weaker overnight after peace deal impasse. MBS down a quarter point and 10yr up 2.6bps at 4.381 12:58 PM weakest levels with 10yr up 4.6bps at 4.401 and MBS down almost 3/8ths 02:08 PM some support after hitting weakest levels. MBS down 11 ticks (.34) and 10yr up 4.8bps at 4.403

Source: Mortgage News Daily | 11 May 2026 | 7:50 pm

Mortgage Rates Rising to Start New Week

Last week was decidedly stronger for mortgage rates as they either held steady or moved lower on 5 out of 5 days. All told, it was a 0.14% drop from the previous week in terms of the average top-tier 30yr fixed rate.  The new week is starting out in opposite fashion with rates moving up 0.07% today alone. This follows news over the weekend that Trump rejected Iran's counterproposal to end the war. In general, the longer the war continues, the higher oil prices will remain.  Oil price don't dictate rates, but there's currently a lot of correlation due to inflation implications. Oil naturally impacts the cost to ship goods, so a rapid spike in oil prices increases inflation. Rates are based on bonds, and bonds hate inflation. In fact, inflation is technically a component of bond yields (aka "rates"). Despite the rocky start to the week, we're not necessarily destined to move in one direction or the other. Everything depends on progress toward peace, or lack thereof. To a lesser extent, this week's incoming economic data can also have an impact. Coincidentally, much of that data focuses on inflation for the month of April.

Source: Mortgage News Daily | 11 May 2026 | 7:30 pm

Weaker Start After Peace Deal Stalls

Bonds are starting the day moderately weaker. The reasons are straightforward. Chief among them, Trump rejected Iran's counterproposal to end the war, calling it "totally unacceptable." In response, Iran's foreign minister said it will never bow to foreign pressure. Adding fuel to the fire, Netanyahu said the war was not over and there was "more work to be done."  When trading began late Sunday night, oil prices were roughly 5bps higher and 10yr yields rose 4bps to roughly 4.40%. Despite those losses, trading levels for both oil prices and bond yields remain lower than they were before last week's big rally on Wednesday morning.

Source: Mortgage News Daily | 11 May 2026 | 3:28 pm

Calm and Slightly Stronger, But Volatility Will be Back

Calm and Slightly Stronger, But Volatility Will be Back Once or twice per week, the bond market manages to post a fairly calm trading day against the prevailing backdrop of generally higher volatility. Today was such a day. The most helpful catalyst was an absence of any major war-related headlines and associated oil price volatility. That said, it's a near certainty that war-related volatility will be back in the coming week.  Econ Data / Events Average earnings mm (Apr) 0.2% vs 0.3% f'cast, 0.2% prev Non Farm Payrolls (Apr) 115K vs 62K f'cast, 178K prev Participation Rate (Apr) 61.8% vs -- f'cast, 61.9% prev Unemployment rate mm (Apr) 4.3% vs 4.3% f'cast, 4.3% prev Consumer Sentiment (May) 48.2 vs 49.5 f'cast, 49.8 prev Sentiment: 1y Inflation (May) 4.5% vs -- f'cast, 4.7% prev Sentiment: 5y Inflation (May) 3.4% vs -- f'cast, 3.5% prev Market Movement Recap 08:32 AM No major reaction to jobs report. MBS up 2 ticks (.06) and 10yr down 1.5bps at 4.375 10:46 AM Slightly stronger but leveling off.  MBS up 6 ticks (.19) and 10yr down 3.6bps at 4.356 02:13 PM MBS up 5 ticks (.16) and 10yr down 3.5bps at 4.356

Source: Mortgage News Daily | 8 May 2026 | 7:34 pm

Mortgage Rates End Week Slightly Lower

It ended up being a decent round trip for rates this week. Monday kicked things off with a jump to the highest level in more than a month, and the third highest since August 2025. But that ended up being the only day where rates went higher.  Wednesday brough the biggest chunk of the recovery with MND's daily rate index dropping 0.10%.  Tuesday and Friday (today) each added a 0.02% drop, taking the index to 6.42% after ending last week at 6.44%. War-related headlines were less of a factor today and volatility was unsurprisingly lighter as a result. This is an adjustment for seasoned rate watchers who are used to monthly jobs report being a distinct source of volatility. It's especially notable that the job count came in significantly higher with no ill effect on bonds/rates. Over the past 6 months, markets have shifted their jobs report focus from the payroll count to the unemployment rate, reversing decades of precedent. Today's outcome is more logical in that context as the unemployment rate was right in line with expectations at 4.3%.

Source: Mortgage News Daily | 8 May 2026 | 5:52 pm