Good Thursday morning from your Hometown Lender,

With Jobless Claims on hold due to the shutdown, bonds are forced to endure another data-free morning.

The calendar offered a glimmer of hope with a Powell speech, but it was pre-recorded and did not address monetary policy. With that, bonds wait for the day’s only real potentially significant event: the 1 pm 30-year bond auction. We’re seeing a bit of selling this morning, but it is very much an in-range affair as is anything with a yield between 4.08 and 4.20.

The minutes from yesterday’s Fed meeting showed that most officials agreed that the recent data showing a slowdown in job growth made the labor market a higher priority over inflation for the near term. There were a few, though, who felt the quarter-point rate cut we saw wasn’t necessary, and of course, Fed governor Stephen Miran dissented, instead supporting a half-point cut. None of it was a surprise to markets, and we didn’t see much of a reaction to the news.

A bit higher level review:

🏡 Mortgage Market & Rate Update

As of Thursday, October 9, 2025

📊 Current Mortgage Rates

• 30-Year Fixed: ~6.3%–6.6% (steady to slightly lower this week)
• 15-Year Fixed: ~5.9%
• FHA/VA Loans: Just above 6%
• 10-Year Treasury Yield: ~4.13%–4.14% (holding in a narrow range)

➡️ Rates moving sideways after recent volatility tied to Fed policy and economic data.

📰 Key Economic & Political Drivers This Week

1. Federal Reserve Outlook

• Fed officials balancing sticky inflation with cooling labor market.
• Minutes confirm policymakers leaning toward additional cuts later this year.
• Markets expect another cut at Oct 28–29 meeting, though conviction weaker without government data during shutdown.

📰 Key Economic & Political Drivers This Week

1. Federal Reserve Outlook

• Fed officials continue to emphasize that inflation remains sticky, but the labor market is showing signs of cooling.
• Minutes from the September Fed meeting confirmed that policymakers are leaning toward additional rate cuts later this year, but they remain cautious until more jobs and inflation data are available.
• Markets are currently pricing in another cut at the October 28–29 Fed meeting, though conviction is weaker due to missing government data during the shutdown.

2. Government Shutdown & Political Headlines

• The U.S. government shutdown has now stretched into its ninth day, delaying key economic reports like weekly jobless claims. This lack of data creates uncertainty for both the Fed and investors.
• President Trump has assured that the Pentagon will continue paying the military, but broader budget negotiations remain stalled.
• Globally, the European Central Bank (ECB) held rates steady after a series of cuts earlier this year, signaling that major central banks are entering a “wait-and-see” phase.

3. Recent Economic Data

• Jobs: September’s ADP payrolls showed a surprise decline (–32K), while revisions to prior BLS data revealed nearly 1 million fewer jobs than previously reported.
• Inflation: Core CPI and PCE remain elevated but not accelerating, keeping pressure on the Fed to balance inflation control with economic growth.
• Housing: Mortgage applications have ticked up slightly as rates hover near 6%, sparking some renewed buyer interest. However, affordability remains a challenge, especially for younger buyers—data shows more Gen Z adults are living with parents than a decade ago.

🔮 What This Means for Mortgage Rates

• Short-Term (Next 1–2 Weeks): Expect rates to stay in a tight range around current levels. With limited economic data due to the shutdown, markets are relying more on Fed commentary and Treasury auctions. If demand for Treasuries remains strong, mortgage rates could drift slightly lower.
• Medium-Term (Next 1–3 Months): If the Fed follows through with another rate cut at the end of October, we could see mortgage rates edge closer to 6%. However, any upside surprises in inflation or a prolonged shutdown could stall that progress.
• Long-Term (2026 Outlook): With inflation gradually cooling and the Fed expected to cut rates further into next year, mortgage rates are likely to trend lower into the mid-5% range. That said, housing affordability challenges and political uncertainty (budget battles, GSE reform discussions) will remain key themes.

💡 Takeaway for Homebuyers & Homeowners

• Buyers: Today’s rates are more stable than earlier this year, and if you find the right home, locking now provides certainty. Waiting could bring slightly lower rates, but affordability gains may be modest.
• Homeowners: Refinancing opportunities are available, and debt consolidation can be a great financing tool. Keep an eye on the Fed’s October meeting—another cut could open the door for better options; however, rates have worsened after each of the last four rate cut decisions. It is advantageous to lock before the Fed meets, not after.
• Investors & Industry Pros: Watch the 10-year Treasury closely. As long as yields hold near 4.1%–4.2%, mortgage rates should remain steady. A break lower could be the green light for improved pricing.

✅ Bottom Line: 

Mortgage rates are in a holding pattern, caught between a cautious Fed, a government shutdown delaying data, and global central banks pausing after aggressive cuts. For now, stability is the theme—but the end of October could bring the next big move.

Stay safe and make today great!