Good Friday morning from your Hometown Lender,

Rates are steady as they should be with not much data available due to the government shutdown for markets to consider.

For the week, we have seen bonds improve about +20bps and rate sheets improve very minimally. Reprice risk on the day is low, it is not likely we see bonds lose much ground until a deal is struck to pass a budget, and that isn’t likely to happen today.

However, what happens over the weekend is still up in the air.

A couple days ago, Senate Majority Leader John Thune said that he planned to keep the Senate in session through the weekend. But yesterday, Thune said it was “unlikely” senators will be voting this weekend and that “we’ll give them the weekend to think about it, and then we’ll come back and vote on Monday.” I can’t find anything definitive about the House of Representatives, either. So, bottom line, it looks like this shutdown will continue through Monday, minimizing the risk to floating. When the government reopens, rates will be volatile and that is not a good place to be. It is a better decision to lock now and float down on improvement than gamble with other people’s money.

If the shutdown continues into next week, markets will become more jittery. Also, not good for rates.

🏦 Mortgage Market & Rate Analysis

Friday, October 3, 2025

📊 Where Rates Stand Today

30-Year Fixed: ~6.41%–6.52%
15-Year Fixed: ~5.68%–5.79%
10-Year Treasury Yield: ~4.19%

Trend: Rates have edged higher (minimally) this week as economic data has been on hold due to the shutdown and cautious Fed messaging temper expectations for additional rate cuts.

📰 Today’s Economic Data – 10/3

Nonfarm Payrolls (September): Data on hold pending the government reopening
Unemployment Rate: Data on hold pending the government reopening
PCE Inflation (September): The Fed’s preferred inflation gauge showed modest cooling, but not enough to shift policy expectations significantly.

🗓 Weekly Recap & Market Drivers

New Home Sales (9/24): Surged 20% in August, hitting a three-year high.
Durable Goods Orders (9/25): Beat expectations, led by transportation and defense sectors.
ISM Manufacturing Index (9/30): Came in slightly below expectations, suggesting some softness in factory activity.
ADP Employment Report (10/1): Beat forecasts, showing private sector job growth remains strong.

🏛 Political & Policy Developments

Government Shutdown: Congress has not passed a short-term funding bill, avoiding a shutdown and keeping economic data releases on schedule.
FICO Score Reform (10/2): FICO launched a direct license program allowing lenders to bypass credit bureaus, potentially lowering costs and improving transparency for borrowers.
FHFA & MBA Support: Both agencies praised the move, calling it a step toward a more competitive and consumer-friendly mortgage market.
Election-Year Dynamics: Political pressure for more aggressive rate cuts continues, but the Fed remains focused on inflation and employment data.

🔮 Rate Outlook & What to Watch

Short Term (Next 1–2 Weeks): If inflation continues to cool and job growth slows, rates could ease slightly. Strong data or hawkish Fed commentary could keep rates in the 6.4%–6.6% range.
Medium Term (Fall 2025): If the Fed follows through with additional cuts and economic data softens, well-qualified borrowers could see rates dip into the high-5% range by year-end. Risks include sticky inflation, strong wage growth, or geopolitical instability.

📅 Key Economic Calendar – Oct 7–11, 2025

Tue 10/7: Consumer Credit Report → Medium
Wed 10/8: Wholesale Inventories → Low
Thu 10/9: Jobless Claims → Medium
Fri 10/10: University of Michigan Consumer Sentiment → Medium

💡 Takeaway

“Mortgage rates stayed steady this week as job data has been limited by the government shutdown. The Fed remains cautious, future rate cuts may be slower than originally hoped as the data needed is delayed. If you’re considering a refinance or purchase, now’s a smart time to review your options before rates shift again.”

Stay safe and make today great!