Rates open September at 6.87% — the highest level in over a year — as MBS prices sell off and spreads widen heading into a critical jobs week.

The 30-year conventional rate opened September at 6.87%, up another 6 basis points from yesterday's close — the highest reading in over a year. MBS prices are selling off across the coupon stack: the UMBS 5.0 is down to 96-13 this morning, the 6.0 at 101-01, both under pressure from yesterday's levels. The 10-year Treasury is holding near 4.74%. What's notable is that MBS spreads appear to be widening alongside broader bond weakness — mortgage rates are getting squeezed from more than one direction.

August was a rough month for the rate environment. The 30-year conventional started the month near 6.50% and exits at 6.87% — roughly 37 basis points higher in four weeks. That move was driven by stronger-than-expected economic readings through mid-month, hawkish signals out of Jackson Hole late last week, and now continued selling pressure as September opens. Spread widening is the compounding factor: when mortgage bonds underperform Treasuries, lenders can't pass through Treasury gains even when they exist. That's the situation this morning.

For anyone locking a purchase loan today, 6.87% is the number on a 30-year conventional. The math on waiting hasn't changed — rates respond to data, and the next real catalyst on the calendar is Friday's August employment report. A soft payroll print gives bonds a reason to rally and lenders a reason to improve sheets. A strong one likely pushes rates higher from here. Until Friday, this tape sets the tone. If your purchase timeline is driven by the property and not the rate, today's numbers are the operating reality.

— David Burson, NetRate Mortgage