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30-year jumps to 7.33% as markets price an October hike

Bankrate's 30-year is up 11 basis points overnight to the top of its 90-day range, and PCE tomorrow is the next test before Friday's jobs report.

Tuesday, September 29, 202610Y Treasury 5.22%
30Y fixed
7.33%
+8bps today
15Y fixed
6.70%
7d +8bps
5/1 ARM
6.87%
30d +37bps
Now

The sheet moved overnight. Bankrate's conventional 30-year is 7.33% this morning, up 11 basis points from yesterday's 7.22% and 18 above the 7.15% of a week ago. The 10-year traded near 5.24% Monday, its highest level this year, before easing to about 5.22% early Tuesday. There was no print behind it: Mortgage News Daily described Monday as another weak start for bonds, reacting to Strait of Hormuz headlines with or without a move in oil, and National Mortgage News reported economists expect Wednesday's data to show a strong jump in inflation-adjusted consumer spending, which they said would add pressure for an October hike after the Fed raised its target range to 3.75%–4.00% on September 16. Mortgage News Daily's own index moved from 7.43% to 7.50%.

Next

NEXT is the same calendar with less room to spare. BEA's August PCE lands Wednesday, September 30; Freddie Mac's survey and jobless claims follow Thursday, October 1 (claims last printed 197,000); and the September jobs report arrives Friday, October 2, with unemployment last at 4.1%. The next FOMC meeting is October 27–28 with no new dot plot, so those two prints are what can reprice the curve before then. A hot PCE on top of Monday's move would test whether 7.33% is a new floor; a soft one gives bonds a reason to retrace some of it.

Range

On range, the conventional 30-year is at the top of both windows: 6.74%–7.33% over 30 days (average 6.98%) and 6.47%–7.33% over 90 days (86 observations). Bankrate's 15-year is 6.70%, also the top of its 90-day range (5.85%–6.70%). The government and jumbo products moved with it: FHA 30-year 7.02%, VA 7.04% and jumbo 7.45%, each the high of its series since Bankrate resumed publishing them in mid-August. On Mortgage News Daily's index the 5/1 ARM holds 6.85% against a 7.50% 30-year, a 65-basis-point gap.

Do

The lens for today is the conventional-versus-FHA gap. At 7.33% conventional and 7.02% FHA, a $400,000 loan runs about $2,750 a month in principal and interest conventional against about $2,667 at the FHA rate, before mortgage insurance on either side. For a buyer whose approval is tight on debt-to-income, that side-by-side is worth running with the full cost of insurance included, because the rate gap alone does not settle it. Do this today: for every floating borrower, send their payment at 7.33% and at a quarter point either side, and for any FHA-eligible buyer add a side-by-side of the conventional and FHA payment with insurance included, then ask for a lock-or-wait decision before PCE lands Wednesday.

Paste-ready talking points

  • On a $400,000 loan, today's rate works out to about $2,750 a month in principal and interest.
  • A quarter-point move either way changes that payment by about $68 a month, and two big economic reports land this week.
  • If you're floating, today is a good day to decide your lock-or-wait plan. Want me to run your number?
  • If you're comparing loan types, I can put a conventional and an FHA payment side by side, insurance included, so you see the full monthly cost.
  • Reply LOCK and I'll send your payment at today's rate, plus a quarter point higher and lower.

Sample client message

Borrowers currently floating their rate
SubjectYour payment check before this week's reports, {client}

Hi {client}, a quick update on your loan. Rates moved up a bit overnight, and two big economic reports come out Wednesday and Friday that could move them again in either direction. On a $400,000 loan at today's rate, the principal-and-interest payment is about $2,750 a month, and a quarter-point change up or down moves that by about $68 a month. I'd like to put your own numbers in front of you today: your payment at today's rate, plus a quarter point higher and lower, so you can see exactly what is at stake in dollars. If protecting your payment matters most, we can lock today. If you'd rather wait for Wednesday's report, let's set a time Wednesday afternoon to make the call together. Reply LOCK, WAIT, or CALL ME and I'll take it from there.