The Daily Tearsheet

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are down.

Friday’s jobs report will be delayed due to the partial government shutdown. “The Employment Situation release for January 2026 will not be released as scheduled on Friday, February 6, 2026. The release will be rescheduled upon the resumption of government funding,” Emily Liddel, associate commissioner of the BLS, said in a statement.

The Senate has passed a funding measure however it remains held up in the House. House Democrats want ICE reined in and are using the bill as leverage. Some Republicans are holding out because they want voter ID put into the bill.

The manufacturing economy expanded in January, according to the ISM Manufacturing Report. The index rose to 52.6 (any number over 50 indicates expansion) after 26 straight months of contraction. The number was higher than Wall Street analysts expected, driven by a huge jump in new orders. December saw a big decline in new orders, so the rebound may have been a “catch-up” phenomenon.

Inventory levels remain low, which is generally a good sign for the economy because it signals future production will be needed to meet demand. Prices also increased, which isn’t helpful for the Fed’s inflation-fighting mission. Employment is still in contraction mode as companies continue to manage headcount as opposed to hiring new workers.

The comments from manufacturers revolve around tariff uncertainty, however the rebound in the index is a good signal for the economy.

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New Feature: Expanded Market Data with SOFR Swaps

You’ll notice our daily market data now includes SOFR swap rates, provided by Eris Innovations. These rates are derived from Eris SOFR Swap futures (native CME Group contracts), offering a transparent view of long-term rates.

Why this matters for your workflow: Since SOFR replaced LIBOR, it has become the universal benchmark for financing. Using SOFR swaps—rather than Treasuries—for modeling and hedging offers several advantages:

• Capital Efficiency: Swap futures require significantly less balance sheet than cash instruments.
• Precision Hedging: Liquid across the curve (out to 30 years), they allow you to isolate benchmark interest rate risk from credit spread exposure.
• Strategic Utility: Already widely used for hedging MSR portfolios, but they are also becoming the instrument of choice for hedging ARMs, non-QM, RTL, and key rate duration for Agency mortgage portfolios.

By benchmarking against SOFR, and easily trading this with Eris SOFR Swap futures, investors can more effectively monitor the “pure” credit spread of their mortgage assets, which can then be separately managed using Mortgage TBAs. Contact john.douglas@erisfutures.com to learn how Eris SOFR can help you improve your execution.

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US population growth slowed in 2025, according to the Census Bureau. The population grew at 0.5%, about half the growth rate of 2024. This was the lowest rate since 2021 when it grew at 0.2%. Immigration (or net migration to be more precise) was the driver of decrease as enforcement at the border resumed. We saw a similar decline during the first Trump Administration, followed by a bump during the Biden admin, and now net migration is falling again.

An under-appreciated driver of affordability is taxes and insurance (T&I) payments. For decades, the T&I aspect of the mortgage payment was more or less an afterthought as the principal and interest (P&I) portion accounted for the vast majority of the payment. No longer.

In Florida, escrow payment have risen 70% over the past 5 years, with T&I now accounting for 38% of the mortgage payment. On average, escrow payments have increased 45%, driven primarily by rising insurance costs.

“Escalating escrow costs are reshaping the financial reality of homeownership across the U.S.,” says Cotality Principal Economist Archana Pradhan. “This financial strain can deter many from entering the housing market, ultimately affecting their ability to achieve homeownership. At the same time, existing homeowners are getting squeezed, especially those who are on fixed incomes or tight budgets.”

Something to keep in mind when looking at payment-to-income ratios since rising costs can make a mortgage which looks affordable now unaffordable in a few years. This is also why you are seeing seniors flee Florida. It is no longer cheap and people on fixed income cannot handle the uncertainty of rising costs.

Stocks are lower this morning despite a sizeable drop in oil prices. Bonds and MBS are flat.

The week ahead will be dominated by the jobs report on Friday. We will also get ISM data and some Fed-speak.

The partial government shutdown began on Sunday morning, with the House expected to return today. House Democrats are demanding changes in immigration enforcement as a condition to back a resolution. The Senate already passed a plan on Friday to keep the government open, so this is limited to a few recalcitrant House Democrats. If there is a deal today, the brief shutdown probably won’t have any noticeable effects.

That said, there doesn’t appear to be the appetite for a prolonged shutdown like we had in the fall.

Precious metals had a wild ride on Friday, with silver losing 30% after a meteoric rise. Silver’s rise had nothing to do with naturals (i.e. industrial demand); it was completely driven by speculative activity driven by dollar bearishness.

Gold was also smacked around on Friday. The fun continues in the commodity markets as oil is down big this morning after Trump commented positively on the situation in Iran.

____________________________________________

New Feature: Expanded Market Data with SOFR Swaps

You’ll notice our daily market data now includes SOFR swap rates, provided by Eris Innovations. These rates are derived from Eris SOFR Swap futures (native CME Group contracts), offering a transparent view of long-term rates.

Why this matters for your workflow: Since SOFR replaced LIBOR, it has become the universal benchmark for financing. Using SOFR swaps—rather than Treasuries—for modeling and hedging offers several advantages:

• Capital Efficiency: Swap futures require significantly less balance sheet than cash instruments.
• Precision Hedging: Liquid across the curve (out to 30 years), they allow you to isolate benchmark interest rate risk from credit spread exposure.
• Strategic Utility: Already widely used for hedging MSR portfolios, but they are also becoming the instrument of choice for hedging ARMs, non-QM, RTL, and key rate duration for Agency mortgage portfolios.

By benchmarking against SOFR, and easily trading this with Eris SOFR Swap futures, investors can more effectively monitor the “pure” credit spread of their mortgage assets, which can then be separately managed using Mortgage TBAs. Contact john.douglas@erisfutures.com to learn how Eris SOFR can help you improve your execution.

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Fed Governor Michelle Bowman still considers monetary policy to be restrictive. “After excluding one-off tariff effects, and with unemployment near estimates of its natural rate but at risk of deteriorating, I continue to see policy as moderately restrictive,” she said.

She said she could have voted to reduce rates, and absent an improvement in the labor market, thinks the Fed should continue to move towards neutrality.

The Spring selling season unofficially kicks off this weekend, and buyers are in the best position in years. The typical buyer got a discount ended up buying the home at 7.9% below listing price, the best since 2012. Overall, most buyers got a 3.8% discount.

“Homebuyers in 2026 shouldn’t write off homes that are slightly above their budget because there’s a good chance they’ll get some sort of concession from the seller, be it a price cut, money toward closing costs or funds for repairs,” said Redin Senior Economist Asad Khan. “This marks a reversal from the pandemic homebuying frenzy, when house hunters were advised to search for homes below their budget because fierce bidding wars were causing properties to sell far above the asking price.”

Florida condos are seeing the biggest discounts, with West Palm seeing close to 11%.

Stocks are lower this morning on no real news. Bonds and MBS are flat.

Donald Trump has nominated Kevin Warsh to succeed Jerome Powell as Fed Chairman. “I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump said in a Truth Social post announcing the selection.

Warsh has previous experience at the Fed and is considered to be a safe choice for the markets. While he will probably support lowering rates, he is considered to be independent enough that he can resist Trump’s worst instincts.

Inflation at the wholesale level rose 0.5% month-over-month in December and rose 3.0% for 2025. This is an acceleration from the benign 0.1% and 0.2% increases in October and November. The increase was driven by final demand services, which was attributable to an increase in retailer and wholesaler margins.

____________________________________________

New Feature: Expanded Market Data with SOFR Swaps

You’ll notice our daily market data now includes SOFR swap rates, provided by Eris Innovations. These rates are derived from Eris SOFR Swap futures (native CME Group contracts), offering a transparent view of long-term rates.

Why this matters for your workflow: Since SOFR replaced LIBOR, it has become the universal benchmark for financing. Using SOFR swaps—rather than Treasuries—for modeling and hedging offers several advantages:

• Capital Efficiency: Swap futures require significantly less balance sheet than cash instruments.
• Precision Hedging: Liquid across the curve (out to 30 years), they allow you to isolate benchmark interest rate risk from credit spread exposure.
• Strategic Utility: Already widely used for hedging MSR portfolios, but they are also becoming the instrument of choice for hedging ARMs, non-QM, RTL, and key rate duration for Agency mortgage portfolios.

By benchmarking against SOFR, and easily trading this with Eris SOFR Swap futures, investors can more effectively monitor the “pure” credit spread of their mortgage assets, which can then be separately managed using Mortgage TBAs. Contact john.douglas@erisfutures.com to learn how Eris SOFR can help you improve your execution.

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The median rent in January fell 1.4% to $1,353, according to Apartment List. The vacancy rate hit 7.3%, which is a record high. “Early last year, it appeared that annual rent growth was on track to flip positive for the first time since mid-2023; however, that rebound stalled out and reversed course during a slow summer moving season that has now dragged into the winter,” wrote Chris Salviati, chief economist at Apartment List.

Multifamily units under construction have fallen back to prepandemic levels however there is still a decent amount of supply that has yet to hit the market.

Stocks are flattish this morning after the Fed maintained rates. Bonds and MBS are flat.

As expected, the Fed maintained the Fed Funds rate at its current level of 3.5 – 3.75%. The statement removed the “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.” statement that was in the December statement. Miran and Waller dissented, preferring to cut rates by 25 basis points.

In the press conference Powell suggested he is in no hurry to cut rates: “We’re not trying to articulate a test for when to next cut…What we’re saying is we’re well positioned.” In other words, the labor market has to deteriorate or inflation has to move markedly closer to the 2% target before the Fed cuts again. Suffice it to say we have seen our last cut out of the Powell Fed.

The March Fed Fund futures still see the Fed standing pat, with only a 14% chance for a cut. The December futures still see 2 cuts as the most likely scenario.

It is interesting to see the Fed remove the reference to the downside risks to the labor market given that nothing much has changed from December. The consumer confidence report from earlier this week shows a substantial difference between consumers’ perception of the labor market and the actual numbers coming out of BLS.

I plotted consumer confidence versus the unemployment rate, and we are definitely seeing an breakdown of the inverse correlation between confidence and unemployment:

I’m not sure what is causing the breakdown, which is definitely a post-pandemic phenomenon.

________________________________________

New Feature: Expanded Market Data with SOFR Swaps

You’ll notice our daily market data now includes SOFR swap rates, provided by Eris Innovations. These rates are derived from Eris SOFR Swap futures (native CME Group contracts), offering a transparent view of long-term rates.

Why this matters for your workflow: Since SOFR replaced LIBOR, it has become the universal benchmark for financing. Using SOFR swaps—rather than Treasuries—for modeling and hedging offers several advantages:

• Capital Efficiency: Swap futures require significantly less balance sheet than cash instruments.
• Precision Hedging: Liquid across the curve (out to 30 years), they allow you to isolate benchmark interest rate risk from credit spread exposure.
• Strategic Utility: Already widely used for hedging MSR portfolios, but they are also becoming the instrument of choice for hedging ARMs, non-QM, RTL, and key rate duration for Agency mortgage portfolios.

By benchmarking against SOFR, and easily trading this with Eris SOFR Swap futures, investors can more effectively monitor the “pure” credit spread of their mortgage assets, which can then be separately managed using Mortgage TBAs. Contact john.douglas@erisfutures.com to learn how Eris SOFR can help you improve your execution.

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Homebuyers are cancelling deals at the highest rate on record, according to research from Redfin. Roughly 40,000 contracts were cancelled in December, which is a record high. This works out to 16.3% of properties that went under contract. “High housing costs and rising inventory have made homebuyers more selective,” said Chen Zhao, head of economics research at Redfin. “Home sellers outnumber buyers by a record margin, meaning the buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.”

Atlanta and the Bay Area saw the biggest number of cancellations. “Buyers have options and aren’t shy about negotiating to find the right home,” said Alison Williams, a Redfin Premier real estate agent in Sacramento, CA. “Cost is a major barrier right now, so if the seller hasn’t fixed maintenance issues or the home is priced too high, the buyer may back out.”

Stocks are higher as we await the Fed decision. Bonds and MBS are flat.

The FOMC decision is due at 2:00 pm today. The most likely outcome is that they make no move on rates. The thing to look for will be their body language on future cuts. If the statement (or Jerome Powell) says something like “if progress on inflation continues the way we expect future cuts may be warranted.” will be a good sign. If they imply that they are pausing for an indefinite time, then that would be a bad sign. Look for language like “policy is still modestly restrictive” as a clue for where they think policy is. There has been indications they think r-star (the neutral rate of interest) is higher than they previously thought.

Home prices rose 1.4% YOY in November, according to the Case-Shiller Home Price Index. On a month-over-month basis, prices fell 0.1%. The hip-to-be-square trade continues, with MSAs like Chicago, New York and Cleveland leading the pack. On the other side of the coin, Florida continues to struggle, with home prices in Tampa down 3.9%. Phoenix, Dallas and Miami also saw YOY declines.

“High mortgage rates continue to cast a long shadow over housing,” Godec concluded. “Thirty-year loan rates hovered in the mid-6% range during November, weighing on affordability even as they eased slightly from recent peaks. This elevated financing cost continues to cap home price growth. Inflation has erased most nominal gains, leaving home values essentially flat in real terms.”

Given that inflation is still running around 3% or so, we are seeing real (inflation-adjusted) declines in home prices. As long as wage inflation continues and home price appreciation flattens we should see a continued, gradual improvement in home affordability. If we want durable improvements in affordability, this is the least painful way to do it. Sugar-high steps like QE won’t do the job, and price controls will only make it worse.

Consumer confidence tumbled in January, according to the Conference Board. The index fell by almost 10 points as current conditions and future expectations deteriorated. Perceptions of the labor market continued to deteriorate, which the Fed noticed in its “low hiring / low firing” characterization. There is a noted political bifurcation with Republicans holding much more optimistic views on the economy than Democrats and Independents. Demographically, Gen X and Boomers are the most depressed.

“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana M Peterson, Chief Economist, The Conference Board. “All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2)—surpassing its COVID-19 pandemic depths.”

Part of the decline could be due to the drip-drip announcements of job cuts. Yesterday, UPS announced 30k job cuts. Today Amazon announced 16k. Consumers also indicated they are less likely to spend going forward.

Overall this number is hard to reconcile with the Atlanta Fed’s GDP Now model which forecasts a whopping 5.4% GDP growth in Q4.

Granted, the trade balance is adding a lot to GDP, and some items parts matter more than other when it comes to perceptions of the overall economy. If GDP is rising because imports are decreasing, people probably won’t feel it much. You could say the same with government spending – if government spending is rising because healthcare spending is rising, people won’t get a warm fuzzy feeling about the economy either, even though the GDP numbers look good on paper.

The Fed will be wrestling with these considerations as they make their decision on rate cuts.

Mortgage applications fell 8.5% last week as purchases fell 4% and refis fell 16%. Apps are still up in the high teens compared to a year ago. “Mortgage rates increased for the first time in a month, and as expected, refinance applications fell by 16%. The 30-year fixed rate was the highest in three weeks at 6.24%,” said MBA’s Joel Kan, Vice President and Deputy Chief Economist. “FHA refinance activity bucked the overall trend and increased, as FHA rates remained almost 20 basis points lower than conforming rates. With rates holding in the 6%range, the refinance market is likely to remain sensitive to week-to-week rate movements.”

FHA refinances make me thing we are seeing borrowers with high levels of credit card debt doing debt-consolidation refis into FHA loans. This is an overall sign of stress in consumers, which does create opportunities for loan officers to offer a solution.

Stocks are flattish this morning on no real news. Bonds and MBS are down.

The Fed begins its meeting today. The announcement will be tomorrow, with no changes in monetary policy expected.

The current appropriations bill runs out on Saturday, and Democrats are demanding changes to the Department of Homeland Security in the wake of violence in Minneapolis. The Department of Homeland Security would theoretically be closed if the government shuts down which would supposedly restrict immigration enforcement agencies like ICE. The bill includes funding for the Pentagon and DHS, along with HHS and the Department of Labor, so there are priorities for both parties.

The AP noticed that FHFA Director Bill Pulte increased the caps on Fannie and Fred’s allowable holdings of MBS in response to Trump’s suggestion that the GSEs buy more MBS to lower rate. Trump wanted the GSEs to buy $200MM, however the caps have been raised to $225 billion each so this seems to contemplate further purchases.

Pulte said: “FHFA simply gave each entity legal flexibility to go beyond their previous caps,” Pulte wrote Friday, adding that despite the lenders’ new bond purchasing authority, they would not “exceed $200 billion.”

After the story was published, the agency put out additional statement saying that “Fannie and Freddie will not be allowed to go beyond the president’s buy.”

Prior to entering conservatorship, the GSEs were allowed to hold $450 billion worth of MBS, which means we are going back to pre-GFC levels. Of course the difference this time is that Fan and Fred are not purchasing subprime loans – they are limited to conforming paper which is much less risky.

Will purchasing $200 billion of MBS move the needle for mortgage rates? Maybe in the short term. It would make more sense if MBS spreads were wide, but you can’t make that argument either – MBS spreads are around historical averages.

Durable goods orders rose 5.3% in November, according to the Census Bureau. If you strip out transportation, they rose 0.5%. This offset drops in October. Excluding defense, orders rose 6.6%.

Western Alliance reported better than expected earnings. Earnings per share increased 13.6% and revenues rose 4.6%. NPLs fell to 0.85% of the portfolio. The stock is up a couple of percent pre-open.

Prepayment activity is picking up according to ICE’s First Look. “December’s numbers show that lower interest rates drove refinance activity and prepayments to near multi-year highs,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “At the same time, there was a divergence in delinquency trends, with early-stage delinquencies improving and late-stage delinquencies continuing to rise. Foreclosure activity also increased, driven mainly by FHA and VA loans.”

Foreclosure activity is increasing, primarily in government loans. Early-stage delinquencies are declining.

Stocks are flattish as we enter Fed week. Bonds and MBS are up.

The week ahead will be dominated by the FOMC decision on Wednesday. Right now the chance of a rate cut is pretty slim. We will also get inflation data with the Producer Price Index along with some Fed-speak.

Consumer sentiment improved in January according to the University of Michigan Consumer Sentiment Survey. “Consumer sentiment lifted about 3.5 index points this month, with minor gains seen across all index components. While the overall improvement was small, it was broad based, seen across the income distribution, educational attainment, older and younger consumers, and Republicans and Democrats alike. However, national sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets. Aside from tariff policy, consumers do not appear to be connecting foreign developments to their views of the economy.”

Inflation expectations moderated to 4.0%, however we are still up on a YOY basis. Long-term expectations increased from 3.2% to 3.3%. Note that the breakeven inflation rate on 5-year Treasury Inflation Protected Securities is 2.4%, so there is a gap between investors and consumers.

The Index for Leading Economic Indicators fell 0.3% in November, according to the Conference Board. “Throughout 2025, weak consumers expectations led the decline in the LEI, followed by new orders. The remaining components of the leading index were relatively muted in November, with the strongest positive contributions coming from labor market data, like initial claims for unemployment insurance and weekly hours worked in manufacturing. Despite real GDP growth hitting 4.4% in Q3 2025, the LEI continues to suggest that the US economy will slow in 2026.”

It seems like the high GDP numbers are not affecting sentiment. I guess the trade balance’s effect doesn’t register with the average consumer. This makes sense although rising exports should improve things.

ISM New Orders and consumer expectations were the negative drivers for the index. Initial Jobless Claims and average weekly hours added to the index.

I did a Substack piece over the weekend discussing the US dollar and its role as the reserve currency. Check it out here.

Stocks are flattish this morning on no real news. Bonds and MBS are up.

Third quarter GDP growth was revised upward from 4.3% to 4.4% as the Bureau of Economic Analysis catches up with releases from the government shutdown days. Consumption was flat at 3.5%. The PCE Price index rose 2.8% while the core rate which excludes food and energy rose 2.9%.

The 4.4% growth rate is the highest since the second quarter of 2023, and follows a robust growth rate of 3.8% in the second quarter. The trade balance is contributing quite a bit to growth, but consumption was still the driver. Q1’s drop was largely due to the trade balance as imports increased.

The Atlanta Fed GDP Now model sees even stronger growth for Q4, with the current estimate at 5.4%. Assuming that holds up, that would work out to a string of 3.8%, 4.4% and 5.4%, which is an exceptionally strong run.

We will get the advance estimate for fourth quarter GDP in mid February.

Personal incomes rose 0.3% MOM in November, while personal consumption expenditures rose 0.4%. The PCE Price Index rose 0.2% MOM and 3.0% YOY. The core index was up the same amount. The inflation numbers were a touch hotter than expected, however it is old data so we didn’t see much movement in the bond market.

Note the Fed Funds futures see the Fed holding steady at the January meeting next week.

Stocks are higher this morning after Trump moderated his rhetoric on Greenland. Bonds and MBS are up small.

Trump spoke in Davos yesterday, saying that Denmark wasn’t “up to the task” of defending Greenland from Russia and China. He then said he had a good meeting with NATO Secretary-General Mark Rutte on the situation, where he backed down on the threat of European tariffs and also ruled out invading with the US military.

Was Trump’s initial threats of tariffs simply a negotiating tactic? Who knows? He tends to treat diplomatic conflicts the same way he might treat a recalcitrant concrete subcontractor. Whatever happens, the big threat – some sort of crisis that upsets the postwar order – seems to be off the table for now.

Bonds have improved a touch, but the damage is done and we are stuck with a 10 year yield above 4.2%.

The MBA wrote a letter offering some solutions to lowering costs for mortgage borrowers. Note that these actions can be taken without Congressional approval.

“Appreciating home prices, rising monthly escrow payments for property taxes and insurance, supply issues and higher interest rates continue to strain household incomes, particularly for first-time homebuyers,” the letter stated. “We share the Administration’s view that addressing these challenges requires coordinated action across federal agencies to reduce costs for borrowers and sustain responsible access to affordable homeownership.”

The three actions are:

• Ending the tri-merge credit reporting requirement and allowing a single-file framework.
• Responsibly reducing mortgage insurance premiums.
• Reducing loan level price adjustments across the grid and eliminate LLPAs for rate/term refinances.

“The mortgage market is increasingly governed by overlapping, highly complex regulations that have driven up mortgage costs, making it significantly more expensive to originate and service a mortgage,” the letter stated. “While near-term affordability is critical, policymakers should not overlook the opportunity for broader regulatory modernization that would reduce costs structurally and sustainably.”

As I have noted in other pieces, I think the key is to help the first-time homebuyer directly without adding subsidies which just push up the whole real estate market in general which would defeat the purpose.

This will help more than other gimmicky ideas like a 50 year mortgage or a ban on institutional investors.

Pending Home Sales fell 9.3% MOM in December, according to the National Association of Realtors. On a YOY basis they fell 3%. This is the slow time of the year, so I am reluctant to read too much into it. The Spring Selling season is just around the corner.

“The housing sector is not out of the woods yet,” said NAR Chief Economist Lawrence Yun. “After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook.”

“Even after accounting for typical seasonal patterns, interpreting in-person home search activity in the winter – especially in December – can be tricky due to public holidays, people taking time off, and wintry weather conditions,” Yun added. “We’ll be watching the data in the coming months to determine whether the soft contract signings were a one-month aberration or the start of an underlying trend.”

Stocks are flattish this morning as we await Trump’s speech at Davos. Bonds and MBS are flat.

The President’s speech is supposedly going to be about “America First” foreign policy and will touch on Greenland and Venezuela. Treasury Secretary Scott Bessent discussed the speech yesterday:

“For those countries to activate their troops, I’m not sure what signal that’s supposed to send. It seems pretty quixotic to me,” Bessent said during a keynote speech in Davos, referring to the military exercises in Greenland that a number of European countries joined last week. “President Trump has made it clear that we will not outsource our national security or our hemispheric security to any other countries.”

Bessent repeated earlier calls for calm, again encouraging European to “take a deep breath.” “Why don’t they sit down, wait for President Trump to get here and listen to his argument? Because I think they’re going to be persuaded,” he said.

The “military exercises” were supposedly a handful of people last week. It sounded like four officers from different countries sitting at a table in Nuuk playing Risk. We will see what Trump has in store for his speech. Bonds moved violently yesterday so the worst rhetoric is hopefully already baked in the cake.

Mortgage applications rose 14.1% last week as purchases rose 12% and refis increased 20%. “Mortgage rates declined further last week, driving another big week for refinance applications, which saw the strongest level of activity since September 2025. The 30-year fixed rate averaged 6.16%, the lowest rate since September 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “These lower rates prompted greater refinance activity from conventional and VA refinance borrowers, with increases of 29% and 26%, respectively. Refinance applications accounted for more than 60% of applications, and the average loan size also moved higher.”

Added Kan, “Purchase applications were also up over the week, fueled by an 8% increase in conventional loan activity, and were almost 18% higher than last year.”

The Supreme Court will hear arguments today over whether Trump can fire Lisa Cook, one of the Fed’s governors. She is a Biden appointee who has been accused of occupancy fraud for several residences. This means she claimed an investment property was a primary residence in order to get a lower rate.

As you can see in the LLPA matrix below (from Fannie Mae) they have a substantial charge for investment properties – up to 4.125%:

Is it a tremendous amount of money? No. But the issue being debated is whether this constitutes “cause” to fire her.