You are currently viewing Market Analysis 10.27.25: Rates Are About The Same

Market Analysis 10.27.25: Rates Are About The Same

Good morning on this fantastic Monday from your Hometown Lender,

Rates are about the same as Friday and reprice risk on the day is low.

It isn’t likely that rate sheets make any big moves ahead of Wednesday’s Fed meeting and Fed Chair Jerome Powell’s press conference… and we may not even see big moves after that though keep in mind, the last four times the Fed cut, rates worsened immediately after. The more controlled action is to lock ahead of the meeting and float down if rates improve.

Oil is the troublemaker of the day.

West Texas Intermediate crude is trading around $61 a barrel after recent sanctions-related spikes. Markets are watching oil because higher crude = higher fuel costs = potential upward pressure on inflation. Reuters

Today oil is a touch softer intraday, but still elevated versus early October.

That’s important because if energy prices stay sticky, bonds can get nervous and push yields back up.

Market Analysis, A higher view:

What moved rates today (10/27)

Treasury yields are still behaving.

The 10-year Treasury yield is hovering right around 4.0%–4.03%, basically flat versus last week and well below the highs we saw earlier this year. Lower Treasury yields are the main reason mortgage rates have eased recently. YCharts+1

→ Translation: the bond market isn’t panicking about runaway inflation right now.

Mortgage rates just hit a 2025 low.

Freddie Mac’s latest survey (through Oct 23, 2025) shows the average 30-year fixed at 6.19%, the lowest level in more than a year and the third straight weekly decline (15-year at 5.44%). Refinances are waking back up, and ARM curiosity is creeping in. AP News+1

Daily lender sheets can be slightly below or above that number, but that 6.1x–6.2x handle is now real, not theoretical. MarketWatch+1

Mortgage applications are stabilizing, not exploding.

Mortgage apps dipped just 0.3% in the most recent MBA survey (week ending Oct 17), but the refi share jumped to ~56% of all applications as current rates pulled some homeowners off the sidelines. MBA+1

So: people aren’t stampeding back into the market, but they are sniffing the door.

Consumers are feeling… meh.

The University of Michigan’s final October sentiment index slipped to 53.6 from 55.1. People are still worried about prices and job stability. Lower sentiment usually signals softer future spending, which tends to help bonds (and therefore mortgage rates). SCARaba+1

The political backdrop (why D.C. is in your rate sheet)

The federal government is still shut down.

We are now basically a month into a shutdown, with Congress dug in and no funding deal as of October 27. The Senate failed to push through partial back-pay for some “essential” workers, and pressure is building as missed paychecks and suspended benefits start to hit federal employees and households. The Washington Post+2CBS News+2

  • The shutdown creates a mild drag on overall growth (slower government spending, delayed services). Slower growth usually nudges yields down, which is rate-friendly.
  • BUT it also scrambles data. Some official economic reports are delayed, so the market is flying with less visibility — which keeps volatility higher. The Wall Street Journal+1

Housing and affordability check

Existing home sales finally perked up.

September existing home sales rose 1.5% month-over-month to an annualized pace of 4.06 million units, the fastest since February. Inventory climbed roughly 14% year-over-year and is now about 4.6 months of supply, while the median price hit about $415,200, up ~2.1% from last year. AP News+2Reuters+2

That’s classic “early thaw”: a little more inventory, slightly better rates, and buyers testing the water again — especially in markets where sellers finally blinked on price or concessions.

Reality check for buyers:

Even at ~6.2%, affordability is still tight. On a ~$425K home with 20% down at ~6.25%, all-in monthly cost (PITI + insurance) can still sit in the mid-$2,600s. Affordability hasn’t magically reset to 2020 levels. MarketWatch

The Fed this week (Oct 28–29)

The Fed meets Tuesday and Wednesday (Oct 28–29). Markets broadly expect another 0.25% rate cut as the Fed tries to cushion a cooling labor market and keep the slowdown from turning into an accident. mint+2Kiplinger+2

Context:

  • The Fed already cut once in September.
  • Inflation readings have cooled enough to give them cover.
  • Job market data looks softer (even though we don’t have full official numbers because of the shutdown).
  • The Fed is signaling it cares about preventing broader employment damage more than squeezing the last 0.2% out of inflation. mint+1

That matters for mortgages because:

  • Fed cuts don’t directly set 30-year fixed rates.
  • But cuts do influence investor expectations for growth and inflation.
  • Softer growth + cooler inflation expectations = downward pressure on Treasury yields = potential room for mortgage rates to drift lower or at least stay in this new 6-point-something range. YCharts+1

Market Analysis: This week at a glance (Oct 27–31)

Mon 10/27 (today):

  • Shutdown drama continues; it’s now an economic story, not just a political one. The Washington Post+1
  • Oil near $61 keeps inflation anxiety alive. Reuters
  • Consumer sentiment confirms households are nervous, not euphoric. SCARaba+1

Tue–Wed 10/28–10/29:

  • FOMC meeting. Expect a 25 bp policy rate cut and a very carefully worded press conference. Watch the tone on jobs. mint+2Kiplinger+2

Thu 10/30:

  • Advance Q3 GDP drops. Markets treat this as the “are we slowing gently or tipping over?” report. Strong GDP could bump yields up a bit; weaker GDP could pull them down. mint+1

Fri 10/31:

  • PCE inflation (September) — the Fed’s preferred inflation gauge — hits before the weekend. PCE that looks tame = support for the “rates can keep easing” story. A surprise pop = pressure on yields. (Some data timing has been messy because of the shutdown, but PCE is still considered mission-critical.) mint+1

In short: this week is extremely data-heavy and Fed-heavy. The market can absolutely move midweek.

Market Analysis bullet points:

  • “Mortgage rates have dipped into the low 6s nationally, the best levels in over a year.” AP News+1
  • “The reason is simple: investors think the economy is slowing just enough and the Fed is likely to cut again this week to protect jobs.” mint+1
  • “When investors expect slower growth and cooler inflation, they buy safer bonds like U.S. Treasuries. That pushes the 10-year yield down near 4%, and mortgage rates tend to follow.” YCharts+1
  • “The big wild card is energy. If oil stays elevated in the $60s, it can reheat inflation expectations and push rates back up.” Reuters
  • “Housing is waking up a little: sales rose, inventory’s better, and sellers are talking again — not just staring at you from 2022.” Reuters+1

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

1. Soft landing / gentle glide (base case).

  • Fed cuts 25 bp.
  • GDP and PCE show “cooling, not crashing.”
  • Oil doesn’t spike further.
  • → 10-year stays roughly in the 3.9%–4.1% zone. Mortgage rates hover in the low-to-mid 6s and maybe drift a hair lower. mint+3YCharts+3Trading Economics+3

2. Surprise “we’re still hot.”

  • GDP prints strong, or PCE inflation pops.
  • Oil holds $61+ or climbs.
  • → Bonds sell off, 10-year pushes above ~4.15%, lender rate sheets worsen (think a few eighths higher). Reuters+1

3. Risk-off / slowdown scare.

  • Fed sounds more worried about jobs than expected.
  • Shutdown drags into November and starts hitting paychecks and benefits at scale.
  • → Markets chase safety, 10-year could break below ~3.9%, and rate sheets improve — but with intraday volatility and fast midday reprice risk. The Washington Post+2CBS News+2

Think of it like three lanes on a highway. We’re currently cruising in lane 1. Lane 2 is “uh oh, inflation again.” Lane 3 is “uh oh, growth is cracking.”

Practical lock / float guidance

If you’re closing in ≤30 days:

  • Lean lock bias. We are heading straight into a Fed meeting, GDP, and PCE in the next 72 hours of business days. One spicy headline can erase this week’s improvement. mint+2Freddie Mac+2

If you’re 45–90 days out:

  • Float with guardrails.
  • Have a trigger. For example: “If the 10-year jumps clearly above ~4.15%, we lock immediately” or “If lender pricing worsens by ~0.25% in cost, we’re done waiting.”
  • Document that plan with the borrower so they feel proactive, not reactive. Trading Economics+1

Points vs. no points still matters more than headlines.

At these mostly-sideways rate levels, sometimes buying a small point to drop the rate a notch pencils out faster than waiting around hoping for a Fed headline miracle. That’s an easier, more controllable conversation with the borrower.

Quick market analysis talking points you can paste into email / social

“Oil around $61 is the wild card. If energy costs keep climbing, inflation anxiety can push rates back up.” Reuters

“Average 30-year fixed ~6.19% — lowest in over a year — thanks to softer Treasury yields.” AP News+2Freddie Mac+2

“Home sales just ticked up for the first time in a while as inventory improves and sellers get realistic.” Reuters+1

“The Fed meets Oct 28–29 and is widely expected to cut again to protect jobs and guide us into a softer landing.” mint+1

“We’re nearly a month into a federal shutdown, which is slowing parts of the economy and actually helping bond yields — but it also makes data spikier and politics louder.” The Washington Post+2CBS News+2

Stay safe and make today great!