The Mortgage Bankers Association opened its annual convention in Chicago on Sunday with a higher-for-longer outlook for 2027. MBA chief economist Mike Fratantoni said the association expects two more Federal Reserve rate hikes, one in December and one in the first quarter of 2027, on top of September's increase that took the federal funds target to 3.75% to 4%. MBA forecasts the 30-year mortgage rate averaging about 7.25% this quarter and staying above 7% through all of 2027, with the 10-year Treasury averaging 5.1% this quarter and holding near 5% next year. On volume, MBA projects 2027 originations of $1.99 trillion, down 5% from where it expects 2026 to finish: $1.42 trillion in purchase and $571 billion in refinance. Its scenarios run 100 basis points either side of that baseline, worth $2.64 trillion if rates fall that far and $1.54 trillion if they rise.
The weekend's numbers fill in the rest of the picture. Bankrate's 30-year fixed reads 7.55% for a fourth straight morning, the top of its 90-day range, and Freddie Mac's PMMS rose to 7.40% on October 8. MBA's own application data shows the drag: refinance applications are running 40% to 45% below their January pace and purchase applications about 9% below, from a January when rates averaged about 6.3%. Fratantoni also put the mortgage-to-Treasury spread near 220 basis points, up from roughly 200 for much of 2026.
Redfin's September data shows the purchase side of that same story. Pending home sales fell 4% from August, Redfin's largest monthly drop in more than three years, and fell from a year earlier in all 50 of the most populous metros, led by Seattle at 24.4% down. The median sale price rose 1.3% from a year earlier to $393,895, while the count of homes for sale reached its highest level since March 2020. More inventory and softer price growth can give a buyer who can qualify at today's rate more room to negotiate on price, concessions or a seller-paid buydown. On the lender side, the NMN read of the same MBA session is that the top performers win on revenue rather than cost cuts, and that home equity is the growth play for 2027. Figure's data on more than 500,000 HELOC applications, reported by HousingWire, points the same way: a group of borrowers carrying high monthly debt alongside significant equity.
The week turns on Wednesday, October 14, when BLS releases September CPI at 8:30 am Eastern, followed by PPI and jobless claims on Thursday, October 15, with the next PMMS the same day. Housing starts and permits land in the October 16 to 18 window. Today is Columbus Day and the bond market is closed, so rate sheets carry Friday's pricing until Tuesday's session. MBA's inflation read, with PCE and CPI both near 3.4%, is why a hot print matters: the FOMC's October 27 to 28 meeting carries no dot plot, and Fratantoni said the Fed has signaled it will take October off, which leaves December 8 to 9, the meeting with new projections, as the one MBA expects to hike.
Two industry notes worth a read. A HousingWire op-ed argues down payment assistance programs need common data standards rather than simpler rules, so that lenders can match a declined borrower to an eligible program at the point of decision. And Rocket CTO Shawn Malhotra laid out in National Mortgage News how the company is weighing AI investments around loan officer productivity.
re-run every purchase pre-approval you issued in September at today's rate and send each buyer the updated payment before Wednesday's CPI, so nobody learns from a listing agent that their $400K loan now runs about $177 a month more than it did at 6.90% thirty days ago.