Rates Stabilize Near Highs as Repurchase Activity Shows Mixed Signals

Mortgage rates demonstrated relative stability this week, with the 30-year fixed rate holding at 6.36% according to Freddie Mac's Primary Mortgage Market Survey, down just one basis point from the prior week's 6.37%. The 15-year fixed rate similarly declined to 5.71% from 5.72%. However, the 10-year Treasury yield climbed to 4.46%, up 10 basis points, which compressed the primary mortgage spread to 190 basis points—a notable tightening from recent wider spreads. The yield curve steepened to 48 basis points as the 2-year Treasury remained at 3.98%.

Repurchase activity across government-sponsored enterprises presented a tale of two markets. Ginnie Mae continued its February moderation with repurchases declining to 9,284 loans at an 8.87% rate, down from January's 10.33%. This 146 basis point improvement represents the second consecutive month of declining government loan repurchases, though levels remain elevated compared to the sub-5% rates seen in the fall. FHA loans maintained their dominance at 89.1% of total Ginnie repurchases. In stark contrast, GSE patterns showed extreme divergence—Freddie Mac repurchases virtually disappeared with just one loan in December 2025, while Fannie Mae activity surged 244% in September 2025 to 806 loans valued at $250.6 million.

The regulatory environment remained under pressure following the OCC's March consent order against a top-20 bank servicer for loss mitigation and escrow administration failures. The enforcement action, which requires a 60-day remediation plan and independent compliance oversight, reflects the broader supervisory focus on servicing operations that has intensified throughout 2025. CFPB mortgage servicing complaints have risen 12% year-over-year through Q4 2025, signaling continued operational challenges across the industry.

Consumer sentiment remained weak at 53.3 according to the University of Michigan survey, while initial jobless claims held steady at 211,000. The combination of elevated rates, regulatory pressure, and mixed economic signals suggests continued volatility in mortgage markets. The divergent GSE repurchase patterns warrant particular attention, as they may signal different quality control standards or portfolio management strategies between the enterprises.

Looking ahead, market participants should monitor whether the recent rate stability can be sustained given the rising 10-year Treasury yield and compressed spreads. The regulatory focus on servicing operations is likely to intensify, particularly given the pattern of enforcement actions and rising consumer complaints.