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.