Bonds did the moving this morning, and mortgage surveys have not caught up yet. The 10-year Treasury was trading near 5.03%, about 10 bps under Wednesday's 5.13% close, after a run of sessions Mortgage News Daily described as a sideways holding pattern. CNBC tied the drop to rising Middle East tensions and a risk-off tone in stocks. It was not the labor data: the Labor Department said initial claims fell to 194,000 for the week ending October 17 from a revised 200,000. Bankrate's 30-year fixed reads 7.37%, unchanged since Tuesday, with the 15-year at 6.73% and VA at 7.15%, each 2 bps lower, FHA up a bp to 7.22%, and jumbo flat at 7.45%. Freddie Mac's PMMS stood at 7.40% for the week of October 15, 0.45 points higher than a month earlier.
Next up: the new PMMS lands today, new home sales fall in the October 23–26 window, core PCE in the October 23–30 window, Case-Shiller on October 27, and the FOMC meets October 27–28 with no dot plot. The MortgagePoint reports a Reuters poll in which economists expect the Fed to hold this month and hike in December, so the statement's tone on December matters as much as the decision. A rally built on geopolitical headlines can reverse on the next headline, which makes today's better bond price an opening rather than a new floor.
On range, 7.37% sits just under the 30-day average of 7.40% inside a 7.11% to 7.57% band, and in the upper part of the 90-day range of 6.67% to 7.57% (average 7.01%). The 15-year is the lens worth a look today: at 6.73% it runs 64 bps under the 30-year and sits near the top of its own 90-day range of 6.03% to 6.84%. On $400K, the 15-year payment is about $3,535 in principal and interest against $2,761 on the 30-year, roughly $774 more a month, but total interest over the life of the loan drops from about $594,000 to about $236,000.
The segment today is in-flight files closing before the October 28 Fed decision that are still floating. If this morning's bond move reaches rate sheets, those borrowers get a better price without waiting through the meeting, and if it fades, they are back where they were on Tuesday. Do this today: check your pricing engine this afternoon against this morning's sheet, and if today's rally has reached it, call every floating borrower closing before October 28 with the new payment and offer to lock.