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Market Analysis 10.20.25: New Week

Good Monday AM from your Hometown Lender,

New week. Same grind.

We’re waiting (likely for a good while longer) for the government shutdown to end before the most relevant econ data can truly exert influence on the bond market in the big picture. On the plus side, the trading in the interim has erred on the bullish side thanks to the available non-gov data and anxiety over trade tensions.

So far this morning, bonds have rallied at the open which is just something that can happen serendipitously due to trader positioning and is not tied to any underlying motivation in news/data.

At a higher level:

What moved rates into today

  • Mortgage rates: Freddie Mac’s latest survey (released Thu, Oct 16) shows the 30-yr fixed at 6.27% and 15-yr at 5.52%, edging down and hovering near 2025 lows. This supported slightly better rate sheets late last week. Freddie Mac+2Freddie Mac+2
  • Treasuries: The 10-yr yield is hovering ~4.0% today after easing into the weekend—friendly backdrop for MBS pricing. Trading Economics+1
  • Builders: NAHB builder confidence rose to 37 in October (six-month high). Sentiment is still below “neutral” (50), but incentives and slightly lower rates are helping traffic. Reuters+1
  • Applications: MBA data show apps fell for a third straight week into mid-October, even as refi share crept higher—buyers remain payment-sensitive. Investing.com+1

Today’s context: politics are steering the wheel

  • Federal shutdown—Day 20: The shutdown continues, with another Senate vote expected this evening. White House advisers are signaling it could end this week, but it’s not done until it’s done. The shutdown has paused some federal data, slowed NFIP flood insurance, and is introducing closing delays in certain markets. In the near term, uncertainty has tended to nudge yields lower, but any resolution headline can swing rates intraday. National Association of REALTORS®+5CBS News+5Reuters+5

This week (Oct 20–24): what to expect

  • Data flow still thinned: Some releases remain disrupted by the shutdown; traders are leaning on high-frequency proxies and Fed communications. Expect headline sensitivity to Washington developments. CBS News
  • Housing & activity reads: With official prints spotty, private-sector updates (MBA apps on Wed, Oct 22) and builder/industry surveys will carry more weight than usual. Investing.com
  • Fed countdown: The next FOMC meeting is Oct 28–29; markets expect a cautious tone given softer growth and the data blackout. Long-end yields near 4% are consistent with a “sideways-to-slightly-lower” mortgage-rate bias unless a hot data surprise lands. Federal Reserve+1

What this means for rates (translation for clients)

  • Near-term (days to a couple of weeks): With the 10-yr near ~4% and PMMS drifting lower, rate sheets have a mild tailwind. If the shutdown ends and pent-up data/permits flood back in, expect volatility—especially if inflation or activity reads run firm. Bias: sideways to slightly lower, but headline-driven chop is real. Trading Economics+1
  • 1–3 months (into year-end): The Fed is likely to stay gradual and data-dependent. If growth cools and inflation progress resumes, mid-6s on the 30-yr remain plausible; stickier inflation or heavy Treasury supply would cap rallies. Federal Reserve

Practical guidance you can share (novice-friendly)

  • Lock vs. float:
  • Purchases / tight escrows: Lean lock. Today’s pricing is competitive for 2025; don’t let DTI drift on a headline.
  • Refis / flexible closes: Disciplined float can make sense while 10-yr hovers near 4%. Use auto-alerts and a hard target to capture dips.
  • Structure beats sticker: Seller credits for permanent points or a 2-1 buydown often reduce the payment more than the same dollar price cut—particularly when appraisals are tight. (App credits count; furniture cars do not.)
  • Closings during shutdown: Build in extra time for NFIP, VOEs, and IRS transcripts in affected areas; confirm wire instructions by phone with title (no email changes mid-deal—ever). Reuters+1
  • For agents: Builder incentives are widespread (~65% using incentives; avg. price cut now ~6%). Pair with buydowns to unlock payment-sensitive buyers. National Association of Home Builders

The week at a glance (quick timeline)

  • Mon (Oct 20): Shutdown headlines dominate; 10-yr ~4.0%. Trading Economics+1
  • Wed (Oct 22): MBA applications (watch refi share vs. purchase). Investing.com
  • Thu/Fri: Light official data unless shutdown ends; Fed speakers and market internals (yields, spreads) guide rate sheets. Federal Reserve

Bottom line for today

Rates are stable-to-slightly-better versus last week’s survey, with the 10-yr near 4% and builders a bit more upbeat. The shutdown path is the wild card; a fast resolution could trigger a data catch-up swing. If you need certainty, lock the win. If you have time, a guard-railed float with alerts is reasonable. And yes—have your “funded & recorded” confetti ready, not your “refresh Twitter” finger. 🧯➡️🎉

Stay safe and make today great!