My cat Myrtle never liked Halloween, apparently believing it was for amateurs. Our nation has plenty of interesting historical sites related to ghosts and unpleasant things… like Salem, Massachusetts. It lives with the history of the Witch Trials of 1692 during which 19 women and men were executed on charges of witchcraft. Today, the most frightening thing about the place is the traffic in October, but also somewhat frightening is the price of real estate: if you want a decent place there, it’s going to set you back a mil. Speaking of home prices and U.S. transactions, foreign buyers are alive and well, apparently undeterred by the high prices and with a good percentage of them doing all-cash deals. At least affordability problems have been easing somewhat, with the gradual decline of mortgage rates this year. We all know that increasing regulatory restrictions and requirements will not solve consumer affordability challenges, and here is a White Paper that discusses market-based Homeowner Affordability Strategies that benefit many industries and homeowners, the pressing challenge of housing affordability amid the escalating impact of natural disasters, a crisis that demands innovative, collaborative solutions to ensure resilient and sustainable communities. (Today’s podcast can be found here and this week’s are sponsored by Optimal Blue, the only end-to-end capital markets platform built to power performance, precision, and profitability, helping lenders of all sizes operate more efficiently, manage risk more effectively, and maximize results. Today’s has an interview with nCino’s Casey Williams on the latest wave of AI-powered mortgage innovations and how these tools are redefining lender efficiency, borrower experience, and what’s next in intelligent mortgage automation.)

Rates have been flirting with long term lows over the past 2 weeks, but today made it official.  Today’s average top tier 30yr fixed rate perfectly matched that seen on September 16th, 2025.  That’s the lowest it’s been since September 2024, and we’re so close to those lows that it’s just as fair to say rates are the lowest they’ve been in over 3 years.  Today’s move didn’t come in response to anything specific. In fact, most of the justification for it was seen in yesterday’s trading session and simply didn’t have an opportunity to impact the average lender until this morning.  Incidentally, there are similar vibes this afternoon as bonds have once again improved too late in the day for most lenders to go to the trouble of adjusting mortgage rates. That means that if bonds (upon which rates are based) manage to hold their current levels through tomorrow morning, rates could be a bit lower again tomorrow.  Of course, after that, there’s a fair amount of potential volatility associated with the Fed announcement at 2pm ET.  We already know the Fed will be cutting rates tomorrow and that rate cut has no bearing on what happens to mortgage rates going forward. Rather, it would be the tone of the Fed’s press conference, or the nature of any changes in the Fed’s bond buying policies (something that might be included in tomorrow’s statement). Bottom line: rates are already low today. The Fed rate cut won’t make them go any lower.  Other info from the Fed could make them go EITHER higher or lower, depending on what’s said.  

Bill Pulte’s X post has the industry excited that loan level price adjustments could change, but the impact would not be as beneficial as some think, KBW said.

Fannie Mae revised its economic and housing outlook for 2025 and 2026, projecting mortgage rates to hit 6.3% and 5.9%, respectively.

The GSE accused four companies of trademark infringement, alleging they misrepresented to consumers that their products received its endorsement.

Malloy Evans and Danielle McCoy are moving on as both Williamson and Tom Klein, deputy general counsel, take on their respective responsibilities for now.

A previous report on Waterstone Mortgage’s Q3 earnings contained inaccurate information. We are correcting the record.

Bonds Improve After Treasury Auctions

Treasury auctions don’t always cause a reaction in bonds, but they did today. This has less to do with the results being remarkable and more to do with the fact that there were two big auctions on a Monday (as opposed to the typical auction schedule that plays out Tue-Thu) as well as the fact that there’s not much else going on in terms of data due to the shutdown. In hindsight, we can see the market likely built in a small concession ahead of these auctions, and the concession was traded back out after the auction results printed. One final way we know the auctions are having an impact is via the outperformance of MBS. Since MBS aren’t weighed down by a big glut of new supply, they were free to outperform both 10 and 5yr Treasuries–something like probably would not have happened so decisively in the absence of the auction cycle. 

Econ Data / Events

m/m CORE CPI (Sep)

0.227% vs 0.3% f’cast, 0.3% prev

m/m Headline CPI (Sep)

0.3% vs 0.4% f’cast, 0.4% prev

y/y CORE CPI (Sep)

3.0% vs 3.1% f’cast, 3.1% prev

y/y Headline CPI (Sep)

3.0% vs 3.1% f’cast, 2.9% prev

m/m SUPERCORE

.351 vs .330 prev

Market Movement Recap

10:01 AM Modestly weaker overnight with some additional selling after 9:30am NYSE open. MBS down 2 ticks (.06) and 10yr up 1bp at 4.029

01:19 PM Stronger both before and after 5yr Treasury auction.  MBS up 1 tick (.03) and 10yr down 2bps at 3.999

As the shutdown continues, econ data remains sparse. This makes for smaller, more range-bound movement overall with last week making a decent case to established the floor of the current range in Treasury yields. A good-but-not-good-enough CPI helped seal the deal on Friday, but the impending Fed announcement is just as relevant.  The market has already priced in the 25bp cut and has moved on to the next consideration: a dovish vs hawkish press conference. Combine that uncertainty with the need to underwrite the week’s accelerated Treasury auction cycle (Mon/Tue as opposed to the normal Tue-Thu) and it’s completely forgivable to see 10yr yields respecting a floor of 3.97 after briefly challenging it last week. 

I was recently on a hike with a gal pal, and we were talking about her future. I asked, “You don’t have any kids. Who is going to take care of you when you get older?” She replied, “The sommelier.” The future should be on everyone’s minds. I met up with a friend last week at the MBA Annual, and, knowing that his son had worked summer jobs for a lender in our business, I asked him about his son entering the residential lending. He replied, “He was all set to become a loan officer assistant but then went to work for ICE due to its $50,000 signing bonus program.” Paying off a student loan should matter to recent college grads, and certainly impacts buying a home down the road. I hear plenty of rumors about student debt. It turns out that, among those who ever incurred debt for their education, 8 percent were behind on their payments at the time of the 2024 survey, and 33 percent had outstanding debt and were current on their payments. Fifty-nine percent had completely paid off their loans. (Today’s podcast can be found here and this week’s are sponsored by Optimal Blue, the only end-to-end capital markets platform built to power performance, precision, and profitability, helping lenders of all sizes operate more efficiently, manage risk more effectively, and maximize results. Today’s has an interview with Rob Chrisman on takeaways from MBA Annual, the mood of the industry, and what to look forward to as conference season winds down.) Services, Products, Software, and Tools for Lenders and Brokers