Somewhere, in a parallel universe, Mariah Carey is walking around some supermarket, sick of listening to me sing Christmas carols. This is, of course, a humorous assumption, but what isn’t so humorous is the discussion begun by the Trump Administration about assumable mortgages, arguably the bane of MBS investors. Locked-in mortgage rates and frozen inventory have pushed an old idea back into the spotlight: the assumable mortgage, a feature long limited to FHA and VA loans but now debated as a potential fix for an affordability crisis that rate cuts alone cannot solve. As millions of ultra-low-rate mortgages sit trapped under American homes, policymakers, lenders, and consumers are wrestling with big questions about equity, market distortion, and what happens when formal financing channels no longer meet the needs of buyers and sellers. From the legal gray zones of “subject to” deals to international models like portable mortgages, pressure is building for bold solutions that could reshape everything from MBS markets to household mobility. The debate over assumability is really a debate about whether the housing system can adapt before consumers invent their own workarounds. Click to read the full deep dive. (Today’s podcast can be found here and this week’s are sponsored by Lenders One. Lenders One is dedicated to helping independent mortgage bankers, banks and credit unions reduce costs, improve profitability, and operate competitively in the mortgage industry and within their communities. Hear an interview with Texans for Reasonable Solutions’ Nicole Nosek on how housing reform hinges on pairing pro-supply, market-friendly policy with strategies that defuse local resistance, protect affordability for lower- and middle-income families. Robbie says you don’t want to miss this one.)
Bonds were modestly weaker overnight, but have moved back into positive territory after this morning's Employment Cost Index and NYSE. This means 10yr yields are at the bleeding edge of the 3-month range heading into this afternoon's Fed announcement.
The rate cut is about as close to a foregone conclusion as normal, so the focus remains squarely on the dot plot (and the press conference, to a lesser extent). The last dot plot showed one more cut in 2025 and one additional cut in 2026, but 2026's dots are much more dispersed.
With some of the more hawkish speeches recently, the risk is that some of the more central dots migrate up from 3.375 to 3.625--effectively suggesting the Fed is done cutting until further notice. We suspect some of the bond market weakness of the past 2 weeks is trading that fear, but there could be more weakness if it's confirmed. On the other hand, if 2026 retains the single rate cut, it should be rate-friendly.
Wednesday is All About Dot Plot and Powell
Bonds lost ground moderately and logically on Tuesday in response to the JOLTS data. From here, this week's volatility potential hinges on the Fed. Fed Funds Futures suggest that there's been no change in rate cut prospects for Wednesday's meeting. It remains a nearly a 90% probability and thus a non-event when the cut is announced. The more important events will be the 2pm ET release of the dot plot (individual Fed member forecasts for the Fed Funds Rate) and the 2:30pm press conference with Fed Chair Powell. While it may be fashionable to hold the cynical view that Powell's pressers "always" hurt rates, that's certainly not the case and we have no way to know if it will be the case on Wednesday. At the very least, the bearish set-up over the past 2 weeks should tell you that anything can happen (considering Fed rate cut days have often pushed back against the prevailing trend in rates).
Econ Data / Events
ADP Employment Change Weekly
4.75K vs -- f'cast, -13.5K prev
CB Leading Index MoM (Sep)
-0.3% vs -0.3% f'cast, -0.5% prev
JOLTs Job Quits (Sep)
3.128M vs -- f'cast, 3.091M prev
JOLTs Job Quits (Oct)
2.941M vs -- f'cast, -- prev
USA JOLTS Job Openings (Sep)
7.658M vs 7.2M f'cast, 7.227M prev
USA JOLTS Job Openings (Oct)
7.670M vs -- f'cast, 7.658M prev
Market Movement Recap
10:50 AM Sideways to slightly stronger overnight, but now weaker after JOLTS data. MBS down an eighth and 10yr up 1.5bps at 4.178
02:10 PM Weakest levels. MBS down 6 ticks (.19) and 10yr up 2.2bps at 4.185
04:17 PM Drifting out at weakest levels. MBS down 7 ticks (.22) and 10yr up 2.2bps at 4.185
Mortgage rates were surprisingly steady on Tuesday with most lenders roughly in line with Monday's levels. Why surprising? Because the bond market was noticeably weaker and bonds dictate day to day mortgage rate movement. In Tuesday's case, we can actually reconcile the steadiness with the timing of bond market movement. Specifically, bonds didn't lose ground until after the 10am release of the Job Openings data from the Bureau of Labor Statistics. Most mortgage lenders consider bond market levels before 10am when setting rates for the day. The implication is that if bonds are at the same levels tomorrow morning, the average lender would set rates higher. Tomorrow afternoon brings another potential source of volatility in the form of the latest Fed announcement. The most important thing to understand about tomorrow's probably Fed rate cut is that it is NOT a mortgage rate cut. In fact, mortgage rates have been more likely to move higher following recent Fed cuts. Even then, the cut itself is not the news the market is waiting for. Rather, traders are interested to see each Fed member's rate outlook via the quarterly release of the Fed's economic projections. In addition, every Fed meeting includes a press conference with the Fed Chair and bonds have often made the biggest moves in response. Bottom line: the rate cut means nothing for mortgage rates. Volatility will come from the 2pm ET dot plot (the chart that shows each Fed members' rate outlook) and the 2:30pm press conference.
“Seminar ‘How to avoid frauds’ is canceled. Tickets are non-refundable.” Collectively, we don’t want mortgage fraud, right? It’s a non-partisan issue. A grand jury rejected a new mortgage fraud indictment against New York Attorney General Letitia James. Meanwhile, it must be difficult living under a constant microscope, and yesterday a story broke that “Trump’s Own Mortgages Match His Description of Mortgage Fraud.” (Government watchers also noted that Treasury Secretary Scott Bessent announced that he has “divested” himself of North Dakota soybean farmland while President Trump has announced a $12 billion aid package for farmers impacted by trade policies.) Capital markets staff are focused on many things, including combatting fraud since it is illegal and impacts everyone from borrowers to investors. Today’s Capital Markets Wrap, at 3PM ET and presented by Polly, the group addresses many of the general topics facing the industry: the December slowdown in MBS trading, the Fed meeting, 2026 forecasts that hint at brief refinance openings, higher conforming loan limits, record home equity, first-time homebuyer trends, and how new trigger-lead rules may affect recapture strategies next year. One topic unlikely to be covered is artificial intelligence, but don’t worry: In his latest heavily footnoted Mortgage Musing, attorney Brian Levy offers his unique perspective on the role of AI in the mortgage industry and the hard work needed to lower the cost of mortgage loan production. (Sign up for free to get an email from Mortgage Musings whenever Levy posts a new one by subscribing here.) (Today’s podcast can be found here and this week’s are sponsored by Lenders One. Lenders One is dedicated to helping independent mortgage bankers, banks and credit unions reduce costs, improve profitability, and operate competitively in the mortgage industry and within their communities. Hear an interview with Fairwinds Magda DeMauro on how lenders can overcome regulatory and operational barriers, use education, adopt strategic overlays, and embrace emerging tools to offer more flexible, innovative credit decisions that help better support borrowers seeking new or alternative paths to homeownership.)
Watching Rates
Check our some recent articles and posts about current rates.
Mortgage rates were surprisingly steady on Tuesday with most lenders roughly in line with Monday's levels. Why surprising? Because the bond market was noticeably weaker and bonds dictate day to day mortgage rate movement. In Tuesday's case, we can actually reconcile the steadiness with the timing of bond market movement. Specifically, bonds didn't lose ground until after the 10am release of the Job Openings data from the Bureau of Labor Statistics. Most mortgage lenders consider bond market levels before 10am when setting rates for the day. The implication is that if bonds are at the same levels tomorrow morning, the average lender would set rates higher. Tomorrow afternoon brings another potential source of volatility in the form of the latest Fed announcement. The most important thing to understand about tomorrow's probably Fed rate cut is that it is NOT a mortgage rate cut. In fact, mortgage rates have been more likely to move higher following recent Fed cuts. Even then, the cut itself is not the news the market is waiting for. Rather, traders are interested to see each Fed member's rate outlook via the quarterly release of the Fed's economic projections. In addition, every Fed meeting includes a press conference with the Fed Chair and bonds have often made the biggest moves in response. Bottom line: the rate cut means nothing for mortgage rates. Volatility will come from the 2pm ET dot plot (the chart that shows each Fed members' rate outlook) and the 2:30pm press conference.
Both stocks and bonds lost ground on Monday. This pushed mortgage rates up near their highest levels in just over 3 months (because mortgages are based on bond prices). To put the 3-month highs in perspective, today's rates are right in line with those seen 2 weeks ago. [thirtyyearmortgagerates] When we see a larger-than-average shift in rates, it's often attributable to an obvious catalyst. These can be things like economic reports, comments from the Fed, or geopolitical developments. In today's case, there are no obvious scapegoats. That said, given the proximity of the next Fed announcement, "pre-Fed jitters" will likely be a popular guess. Ultimately, between Thanksgiving and New Years, we're simply more likely to see random volatility without a clear root cause. Clear connections will be more likely over the next 2 days due to Tuesday's economic data and Wednesday's Fed announcement.
Average mortgage rates drifted slightly higher to end the week, though they remained under the levels seen on Monday and Tuesday. Even then, none of this week's movement was especially abrupt. That's interesting considering there was a decent amount of economic data throughout the week. It could be that the rate market is simply waiting for the heavier hitting events on the horizon. Next Tuesday's Job Openings data is on the watch list. It will be the first major October employment data from the Bureau of Labor Statistics (the same agency that publishes the big jobs report) since the end of the government shutdown. That's especially notable in this case because we won't ever get a full jobs report for October, and the portion that remains won't come out until the following week. Then on Wednesday, the The Fed will announce its rate decision. Markets are fairly convinced the Fed will cut rates, but the confidence isn't as iron-clad as normal. Additional surprises could arrive with the Fed's dot plot (updated rate forecasts from each Fed members) as well as Fed Chair Powell's press conference. As always, keep in mind that a Fed rate cut has no bearing on longer-term rates like mortgages. It's actually been more common to see mortgage rates rise following Fed rate cuts.
Today's mortgage rates a just a hair higher than yesterday's and although yesterday's rates were reasonably close to last Friday's, they were still definitely higher. That last assertion is at odds with some of the mortgage rate media coverage you may encounter today, but there's a logical reason. Freddie Mac releases its weekly mortgage rate survey every Thursday. It consists of an average of the rates from each of the previous 5 business days (Thursday through Wednesday). Thus, by the time it is reported, it is a fairly stale indication of rate movement if there's been any reasonable amount of volatility. In the case of the current week, Monday and Tuesday saw rates move meaningfully higher from last week. Even after yesterday's recovery, the average lender is still slightly higher than any day last week apart from Monday. As always, keep in mind that consistent daily coverage of mortgage rates mean that qualitative words like "higher and lower" may sound more serious than they are. For context, rates haven't drifted outside a 0.25% range for the past 3 months. Over the past 2 weeks, the range has been half that. [thirtyyearmortgagerates]
