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Market Analysis 10.22.25: Rates About The Same

Good morning on this best day of the week Wednesday from your Hometown Lender,

Rates this morning likely to be about the same as yesterday, which is nothing to sneeze at.

Reprice risk on the day is low, it is not likely we see any big moves in bonds that would put lenders in a position to have to reprice. Mortgage bonds are once again testing a technical resistance level that may limit further gains.

There is no government economic data yet again today.

CPI will be released Wednesday and I do not think it is a good idea to float into that data. Lock on the recent improvements before then and float down if the opportunity presents. The market has fully priced in a Fed cut next week and the majority of one for December. How much more is there really to gain at this point? It is never a straight line up or down and I would anticipate a pullback in rates after the gains we have seen.

At a higher level:

What moved rates today (10/22)

  • Treasury yields: The 10-year hovered just under 4% for most of the session (day range roughly 3.94–3.98%). That’s the key anchor for secondary MBS pricing and your rate sheets. Investing.com
  • Mortgage demand: MBA reported applications -0.3% w/w with a +refi tilt as rates edged lower — a directional positive for pipelines even if volumes are choppy. Data are for week ending Oct 17. Calculated Risk+1
  • Oil (inflation tailwind): WTI ~$58 after a multi-month slide; lower energy prices continue to cool inflation expectations and support bond prices (lower yields). markets.businessinsider.com+1
  • MBS tone: UMBS 5.5% has been steady around 101-07/101-08 — supportive of flat-to-slightly-better mid-day pricing, subject to headline risk. Mortgage News Daily+1

The political backdrop (why headlines matter)

  • Federal government shutdown: Now in week 3+, continuing to delay some federal data and add a small growth drag — typically a mild tailwind for Treasuries/MBS unless a sudden resolution sparks “risk-on.” Reuters

This week’s catalysts (date-stamped, easy to brief clients)

  • Thu, Oct 23 — Existing Home Sales (Sep), 10:00 a.m. ET. First housing print of the week; investors will parse inventory and prices for demand/affordability reads. National Association of REALTORS®
  • Fri, Oct 24 — CPI (Sep) rescheduled, plus flash PMIs / Michigan sentiment. With shutdown-skewed calendars, this one looms large for near-term rate direction. Kiplinger
  • Next Tue–Wed, Oct 28–29 — FOMC. Markets lean toward an additional quarter-point cut amid softer data and shutdown uncertainty. Expect two-way volatility into the decision. Federal Reserve+1
  • Thu, Oct 30 — GDP (Q3, advance), 8:30 a.m. ET. The tape will treat this as a referendum on the soft-landing narrative. Bureau of Economic Analysis
  • Fri, Oct 31 — PCE (Sep), 8:30 a.m. ET. The Fed’s preferred inflation gauge; core PCE is the main character for rate-cut odds into year-end. Bureau of Economic Analysis

Where mortgage rates sit (context for borrowers)

  • Freddie Mac PMMS (week of Oct 16): National 30-yr avg ~6.27%, near 2025 lows; next print lands Thu, Oct 23. Daily retail sheets still key — PMMS is backward-looking. Freddie Mac+1

Near-term rate scenarios (next 1–3 weeks)

  1. Base case — Sideways with a dovish lean: Oil stays subdued, shutdown drags, CPI/PCE come in tame → 10-yr 3.85%–4.05%, retail 30-yr fixed flat to slightly better; refis continue to nibble. Business Insider
  2. Data surprise hot: CPI/PCE or GDP pops, or a swift shutdown deal shifts sentiment → 10-yr 4.10%–4.30%, rate sheets worsen modestly. Bureau of Economic Analysis
  3. Risk-off jolt: Growth scare or geopolitical flare → 10-yr 3.70%–3.85%, improved pricing but with higher intraday volatility. (Inference from recent yield/oil correlation and shutdown sensitivity.) Barron’s

How to explain it to a novice client

  • Mortgage rates follow Treasuries: When investors get nervous about growth or inflation cools, they buy bonds → yields down → lender pricing can improve. Today, sub-4% on the 10-yr reflects that vibe, but headlines can still whip prices around. Investing.com
  • Oil and the pump matter: Cheaper oil filters into lower headline inflation, which usually helps rates — not instantly, but directionally. Business Insider

Practical lock/float playbook

  • Within 30 days of funding: Maintain a light lock bias — you’re trading small potential gains for insulation from Thu/Fri data and next week’s FOMC.
  • 45–90 days out: Float with guardrails. Set a target (e.g., “lock on a 10-yr break above ~4.10%” or if UMBS 5.5% fades below ~101-00). Use lender renegotiation policies if we rally. Trading Economics+1
  • Points vs. no-points: In a mostly sideways tape, the breakeven on points often drives more savings than headline APR changes — run both coupons.

Quick talking points you can lift

“Watch Existing Home Sales (Thu), then CPI (Fri reschedule) and next week’s Fed — that trio sets the tone into Halloween.”

“Sub-4% 10-year is keeping mortgage pricing in a tighter, friendlier range — with whipsaws around data.” Investing.com

“MBA apps dipped, refis up — falling rates are pulling some homeowners off the sidelines.” Calculated Risk

“Oil near $58 is doing quiet work against inflation — good for bonds, good for rates.” markets.businessinsider.com

Stay safe and make today great!!!