Here’s a quick market update for the week of October 26, 2026. Interest rates have improved slightly over the past week, but the 10-year Treasury remains near 5%, and we have a few key reports and a Fed meeting this week.

Bond Market & Rates

The 10-year Treasury is trading around 4.978% this morning, down .01 from Friday. Not a huge move, but finally, we’re continuing in the right direction. That’s an improvement from earlier this month, when the 10-year moved above 5.30%. Of course, inflation remains one of the biggest obstacles to lower rates. September CPI came in at 3.7% year-over-year, keeping pressure on the Fed to remain cautious. The good news is that bonds have improved recently. The question now is whether this week’s Fed meeting and economic data can sustain that momentum.

What to Expect This Week

This is a pretty important week for rates:

• Wednesday (10/28): Federal Reserve Meeting — The market currently expects the Fed to leave rates unchanged, so the bigger story will be what the Fed says about inflation and future rate increases.
• Thursday (10/29): Q3 GDP — This gives us our first look at third-quarter economic growth.
• Thursday (10/29): PCE Inflation — The Fed’s preferred inflation measurement. This could be a major mover for mortgage rates.
• Friday (10/30): Employment Cost Index — An important measure of wage and labor costs.

What we’re looking for: (Bad news is good news) Softer inflation and slower economic growth would generally be good for bonds and mortgage rates. Strong growth or another hot inflation number could push the 10-year Treasury back above 5%.

30-Year Fixed Rate Snapshot

• Freddie Mac 30-year average: 7.23%, down from 7.40% the prior week.
• 15-year Freddie Mac average: 6.68%
• Remember, actual borrower rates can vary quite a bit depending on their credit, loan size, down payment, occupancy, and points.

One longer-term issue for rates remains the national debt, now over $40 trillion.

In the short term, the Treasury must sell a large amount of bonds to finance deficits and refinance existing debt. More Treasury supply can push investors to demand higher yields to absorb it, putting upward pressure on 10-year Treasury and mortgage rates.

Longer term, if deficits remain large, the government will keep adding to the debt while paying more interest on it. That could make it harder for long-term Treasury yields—and therefore mortgage rates—to move significantly lower, even if the Fed eventually lowers short-term rates.

Lock Now or Wait?

Closing in the next 2–3 weeks: I would still lean toward locking. We’ve had some improvement, but with the 10-year sitting right around 5% and a Fed meeting plus inflation data coming this week, there is plenty of potential volatility. 30–60 days out: There may be more reason to wait for an opportunity. If inflation comes in softer and the Fed sounds less concerned about raising rates, Treasury yields could move lower again. If that happens, I would be ready to take advantage of it and lock.

Assets & Home Equity as Income

This remains a great option for clients with plenty of assets or home equity but not enough traditional monthly income to qualify.

• Retirement assets: We can use 70% of eligible retirement assets and divide that amount by 60 months to create qualifying monthly income.
• Home equity: We can use 40% of eligible home equity and divide that amount by 60 months to create additional qualifying income.
• Both can be used for the same borrower, which can make a big difference in qualifying.

Example: A borrower with $1 million in eligible retirement assets could potentially generate $10,000 per month in qualifying income. If they also have $750,000 in eligible home equity, that could add another $5,000 per month. That’s potentially $15,000 per month of qualifying income without relying on traditional employment income. This can be a great solution for retired or high-net-worth clients who have substantial assets and equity but may have difficulty qualifying using traditional income.

As always, please reach out to me directly for information on real estate buying, selling, investing, and financing. 760-758-5370

To search for homes on the market in San Diego, go to: https://kevin.canerealestate.com/

Here is your weekly update with some talking points.  First, a happy birthday greeting to my older brother, Steve!

Mortgage rates continue to rise. No surprise there.

The latest Freddie Mac average for a 30-year fixed mortgage is 7.40%, up from 7.28% the previous week. The 10-year Treasury yield closed Friday at 5.24%, down from 5.31% earlier in the week. While this improvement is encouraging, inflation concerns and higher oil prices continue to put pressure on mortgage rates.

The bond market is closed Monday, October 12, 2026.

THIS WEEK’S BIGGEST RATE MOVERS

Wednesday, October 14
• Consumer Price Index (CPI)
• Core CPI Inflation Report
• Federal Reserve Beige Book

Wednesday’s CPI report will likely be the biggest market-moving event of the week.

Thursday, October 15
• Producer Price Index (PPI)
• Retail Sales
• Weekly Jobless Claims

Friday, October 16
• Import & Export Price Indexes
• Industrial Production

Why It Matters

This may sound like a broken record, but inflation remains the biggest concern for the bond market, especially with energy prices rising again.

If inflation comes in higher than expected:
• Treasury yields could move higher
• Mortgage rates could remain under pressure
• The Fed may consider additional rate increases

If inflation continues to cool:
• Bond markets could improve
• Treasury yields could move lower
• Mortgage rates may get some relief

Iran and the Bond Market

The conflict involving Iran continues to influence mortgage rates by affecting oil prices and inflation. Over the weekend, attacks on Saudi Arabia and additional tanker incidents near the Strait of Hormuz increased concerns about Middle East oil supplies. Brent crude has climbed to about $106 per barrel, reversing some of last week’s gains. Higher oil prices increase transportation and production costs, adding to inflation concerns. That can push the 10-year Treasury yield and mortgage rates higher. However, geopolitical uncertainty can also cause investors to purchase Treasuries for safety, which pushes yields lower. For now, the biggest concern is that continued disruptions to oil supplies will keep inflation higher.

U.S.–China Update

Following last month’s meeting between President Trump and Chinese President Xi Jinping, the USA and China have made progress on trade discussions and communication between our governments. For mortgage rates, reduced trade tensions are generally positive because fewer tariffs limit increases in imported goods prices. However, the impact has been small. Oil prices, inflation, government borrowing, and Fed policy remain much bigger problems for mortgage rates.

Federal Reserve Outlook

The Fed raised its benchmark rate by 0.25% in September, bringing the target range to 3.75%–4.00%. The next Fed meeting is scheduled for October 27–28. This week’s CPI and PPI reports will be key in determining whether the Fed raises rates again.

Financing Spotlight: Omitting a Departing Residence

I talked about this last week, but it is an important tool for sellers who need to sell before they buy.

Here’s a financing strategy that can help borrowers qualify when purchasing a new primary residence while keeping their current home. With certain loan programs, we may be able to omit the departing residence payment from the borrower’s qualifying ratios rather than requiring them to qualify with both housing payments.

Basic requirements include: • At least 20% equity in the departing residence
• Required reserves of 12-24 months of the total monthly payment for the departing residence.

One of my real estate finance students asked a question about the difference between, Conventional, FHA & VA loans. Here’s my answer.

Aloha!  After a couple of weeks in Hawaii, I’m back to fill in what has changed!

MORTGAGE RATES

Mortgage rates are starting the week under pressure again as Treasury yields remain at 20 + year highs. The latest Freddie Mac average for a 30-year fixed mortgage is 7.28%, up from 7.03% the previous week.

The 10-year Treasury yield is trading at 5.3% this morning. Higher oil prices, inflation concerns, and uncertainty over future Fed policy continue to put pressure on the bond market.

THIS WEEK’S BIGGEST RATE MOVERS

Monday, October 5
• ISM Services Index
• S&P Global Services PMI

Tuesday, October 6
• U.S. Trade Balance

Wednesday, October 7
• Federal Reserve Meeting Minutes
• 10-Year Treasury Auction

The Fed minutes will give us a closer look at the discussions behind September’s rate decision and how concerned Fed officials remain about inflation.

Thursday, October 8
• Weekly Jobless Claims
• Wholesale Inventories

Friday, October 9
• University of Michigan Consumer Sentiment
• Consumer Inflation Expectations

Why It Matters

This is a lighter week for economic reports, but the bond market remains extremely sensitive to inflation.

If economic data stays strong or inflation expectations rise:
• Treasury yields could remain above 5%
• Mortgage rates could remain under pressure
• The Fed could keep rates higher for longer

If economic data weakens and inflation expectations improve:
• Bond markets could improve
• Treasury yields could move lower
• Mortgage rates could get some relief

Iran and the Bond Market

Iran continues to have a major impact on rates because of its effect on oil prices and inflation. There is some encouraging news on oil supply. Middle East crude exports recovered significantly during September and, on several days, actually exceeded pre-war levels. However, the situation remains very unstable. The Strait of Hormuz is still not fully reopened, and attacks on tankers have increased. Brent crude is trading around $102 per barrel.

U.S.–China Update

President Trump and Chinese President Xi Jinping made some progress during their recent meetings. The two countries agreed to move forward with new trade and investment discussions, including more favorable tariff treatment for approximately $30 billion of non-sensitive goods in each direction. For mortgage rates, this is mildly positive. Less trade tension reduces the risk of additional tariffs, which can increase the cost of imported goods and add to inflation. However, the impact on rates has been relatively small. Oil prices, inflation, government borrowing, and Fed policy are currently much bigger drivers of the 10-year Treasury and mortgage rates.

Federal Reserve Outlook

The Fed remains focused on controlling inflation, and this week’s meeting minutes should give markets a better idea of how policymakers are thinking about their next move. Higher energy prices remain a concern because they can work their way through the economy and make inflation more difficult to control. If the minutes suggest the Fed may need to keep policy tighter for longer, Treasury yields could remain elevated. A more cautious tone could provide some relief for the bond market.

Financing Spotlight: Omitting a Departing Residence

One of the challenges that a seller can have when they want to buy first and then sell is coming up with the money and/or qualifying for a mortgage with their existing home.

Here’s a financing strategy that can help a borrower qualify when purchasing a new primary residence while keeping their current home. With certain Non QM (Non Qualified Mortgage) loan programs, we can omit the departing residence payment from the borrower’s qualifying ratios rather than requiring them to qualify with both housing payments or obtain a lease agreement.

Basic requirements include:

• At least 20% equity in the departing residence
• Required reserves must be documented. 12-24 months
• The borrower is purchasing a new primary residence
• Additional program and underwriting guidelines apply

For more information on this program, reach out to me at 760-758-5370

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