The story to carry into the weekend is how calmly bonds took Friday's jobs report. Payrolls rose 165,000 against a 65,000 forecast, according to Mortgage News Daily's market recap, yet the 10-year Treasury yield closed Friday at 4.86%, just 2 bps above Thursday's 4.84%. Bankrate's 30-year fixed reads 7.20% this morning, 2 bps above Friday's 7.18% and still near the bottom of its 30-day range of 7.18% to 7.57%.
Two reads on this: HousingWire, Scotsman Guide and MPA all framed the October numbers as strengthening the case for a rate hike at the Dec. 8-9 FOMC meeting, which carries a dot plot, while Mortgage News Daily described Friday's session as a strong showing for bonds given those headwinds and listed several possible explanations without settling on one. On the Fed side, Richmond Fed President Thomas Barkin told CNBC, as reported by The MortgagePoint, that he expects the Fed will need to raise rates further and that a gradual pace "makes sense." Barkin is not a voting FOMC member this year and becomes one next year. The effective fed funds rate sits at 3.88%.
The University of Michigan's preliminary November read adds a second data point to weigh next to payrolls. Consumer sentiment rose to 51 from 48 in October, year-ahead inflation expectations eased to 4.3% from 4.7%, and long-run expectations slipped to 3.4% from 3.5%. The survey also reports that 57% of consumers spontaneously mentioned high prices eroding their living standards. A firmer labor read paired with softer inflation expectations is the backdrop heading into the Nov. 10-15 CPI window.
For origination, a $400K loan at 7.20% is about $2,715 a month in principal and interest, against about $2,816 at the 30-day high of 7.57%. Bankrate has FHA and VA 30-year rates at 6.94%, 26 bps under conventional, which is about $2,645 a month on the same $400K before mortgage insurance or the funding fee. Freddie Mac's PMMS survey printed 7.18% on Thursday, down 6 bps on the week and 22 bps over 30 days. The next scheduled catalysts are the $42 billion 10-year note auction on Tuesday, Nov. 10, then the $25 billion 30-year bond auction on Thursday, Nov. 12, alongside weekly jobless claims and the next PMMS.
On the regulatory side, the Massachusetts Attorney General's rule on shared appreciation mortgages took effect Nov. 6, according to the National Consumer Law Center as reported by HousingWire. It sets out when nonprofit SAM lenders are shielded from state consumer protection claims and requires prominent disclosure of the maximum amount a borrower may have to repay; it does not specifically regulate home equity investment products. The OCC issued version 1.0 of the Homeownership Counseling booklet of the Comptroller's Handbook (Bulletin 2026-55), replacing the June 2011 examination procedures booklet. Separately, NRMLA is asking Congress to restore HUD housing counseling funds, noting that HECM borrowers must complete HUD-approved counseling before a loan can close. On credit performance, TransUnion data reported by MPA shows FHA loans driving mortgage delinquencies above pre-pandemic levels, and National Mortgage News reports delinquencies on Fannie Mae and Freddie Mac loans climbing again since early summer. Fitch is taking feedback through Nov. 16 on how it rates mortgage-backed deals that use alternative credit scores in place of or alongside FICO. And Treasury has designated 6,576 Opportunity Zone census tracts, including 2,594 rural tracts, effective Jan. 1, 2027 for 10 years, per Scotsman Guide.
pull every buyer you have pre-approved for a conventional loan who could also qualify for FHA or VA, and send each one a side-by-side of the payment at 7.20% conventional and 6.94% FHA or VA, with mortgage insurance and fees spelled out, before Tuesday's 10-year auction.