Good FridayAM from your Hometown Lender,

Rates today are in the same tight range as they have been all week.

The PCE inflation data this morning came in right as expected, and bonds had no reaction at all. Inflation remains about 1% higher than the Fed’s desired 2%, and hasn’t moved lower in a year. The tariffs haven’t driven inflation up either, at least not on the PCE. With inflation not falling though, it does question whether the Fed thinks they need to cut rates at the pace the market is anticipating (at least not without next week’s jobs report showing a really bad labor market).

It’s a bit of an unknown from here.

If as expected the jobs report is weak, the initial reaction will be great for rates but if it is not weak, we will see rates slip higher. The bigger unknown though is if the government shuts down, the jobs report will not be released on time. What will markets do then? I would not be floating.

Some higher level insight:

🏦 Mortgage Market & Rate Analysis

Friday, September 26, 2025

📊 Where Rates Stand Today

30-Year Fixed: ~6.34%
15-Year Fixed: ~5.45%
10-Year Treasury Yield: ~4.18%
Trend: Rates have ticked slightly higher this week after a brief post-Fed dip, as stronger economic data and cautious Fed messaging temper expectations for additional cuts.

📰 Today’s Economic Data – 9/26

GDP Final Estimate (Q2): Revised upward to 2.2% annualized growth, slightly stronger than the previous 2.0% estimate.
Why it matters: A stronger economy may reduce urgency for further rate cuts, which can keep mortgage rates elevated.
Jobless Claims: Fell to 218,000 — still historically low, signaling a resilient labor market.
Market Reaction: Bond yields rose modestly on the GDP revision, and mortgage-backed securities (MBS) softened slightly, leading to minor lender repricing.

🗓 Weekly Recap & Market Drivers

New Home Sales (9/24): Surged 20% in August, hitting a three-year high.
Indicates strong buyer demand despite higher rates, likely driven by limited inventory and seasonal momentum.
Durable Goods Orders (9/25): Beat expectations, led by transportation and defense sectors.
Suggests business investment remains solid, which supports economic growth and may limit Fed flexibility.
Mortgage Demand: Purchase applications rose modestly, while refinance activity slowed after last week’s rate dip.
Fed Rate Cut (9/17): The Fed lowered its benchmark rate by 25 basis points to 4.00%–4.25%. Markets had already priced this in, so mortgage rates moved little after the announcement.

🏛 Political & Policy Developments

Fed Messaging: Chair Powell emphasized a “data-dependent” approach and warned against assuming a steady path of cuts.
Legislative Watch: Housing affordability remains a hot topic, with policymakers reviewing FHLBank structures and liquidity access.
Global Trade & Tariffs: Ongoing negotiations and tariff threats continue to influence inflation expectations and investor sentiment.
Election-Year Dynamics: Political pressure for more aggressive rate cuts is building, but the Fed remains focused on inflation and employment data.

🔮 Rate Outlook & What to Watch

Short Term (Next 1–2 Weeks):
If GDP comes in soft and inflation remains tame, rates could dip slightly. Stronger data or hawkish Fed commentary could push rates back toward the 6.5% range.

Medium Term (Fall 2025):
If the Fed follows through with additional cuts and economic data stays soft, well-qualified borrowers could see rates in the high-5% range by year-end.
Risks include sticky inflation, weak Treasury auction demand, or geopolitical shocks.

📅 Key Economic Calendar – Sept 27–Oct 4, 2025

Fri 9/27: Personal Income & Spending, PCE Index – Very High
Tue 10/1: ISM Manufacturing Index – Medium
Wed 10/2: ADP Employment Report – High
Fri 10/4: Nonfarm Payrolls, Unemployment Rate – Very High

💡 Final Takeaway

Mortgage rates are holding near their lowest levels in almost a year, but recent economic data has added some upward pressure. The Fed cut rates last week, but future moves will depend on inflation and jobs data. If you’re considering a refinance or purchase, now’s a great time to explore your options while rates are still historically favorable.

Stay safe, have a great weekend, and make today great!