Bankrate's conventional 30-year reads 7.55% this morning, up 3 bps from Wednesday's 7.52% and back at the top of its 90-day range, so Tuesday's oil-led relief has been fully given back. A week ago it read 7.43%, which leaves the sheet 12 bps worse over seven days. The driver is the Fed. Minutes from the September 15 to 16 meeting, released Wednesday afternoon, show most participants judged another increase in the target range "would likely be appropriate by year end," with inflation risk seen as skewed to the upside. Treasury's daily curve closed the 10-year at 5.28% Wednesday, up a hundredth, and it is trading near 5.32% this morning. Jobless claims did nothing to push back: the advance figure for the week ending October 3 was 197,000. The 15-year sits at 6.81%.
Next up is Freddie Mac's PMMS later today; last week's PMMS read 7.28%, up 25 bps on the week and 57 bps over 30 days on that survey. CPI lands in the October 10 to 15 window and is the print that can move the Fed's year-end math either way. Consumer Sentiment's window opens October 13, housing starts and permits follow October 16 to 18, and the Fed meets October 27 to 28 without a dot plot. The effective fed funds rate is 3.88% after September's quarter-point increase. Until CPI, the minutes set the tone, and the minutes leaned toward tighter.
On range, 7.55% matches the high of both the 30-day band (6.83% to 7.55%) and the 90-day band (6.57% to 7.55%), against a 30-day average of 7.18% and a 90-day average of 6.88%. Today's lens is the adjustable-rate option. Mortgage News Daily's 5/1 ARM reads 6.95% against its own 30-year fixed at 7.59%, a 64 bp gap on the same survey, and the ARM is at the top of its 90-day band too (6.23% to 6.95%). MBA's weekly survey for the week ending October 2 had the ARM share of applications steady at 10.3%, with its own 5/1 ARM contract rate at 6.43% against 7.49% on the 30-year fixed. On a $400,000 loan, MND's 5/1 ARM at 6.95% is about $2,648 a month in principal and interest for the first five years, against about $2,822 on MND's 30-year fixed, a difference of about $174 a month before the rate can adjust.
The borrowers to focus on today are unlocked purchase applicants who expect to sell or refinance inside the next five to seven years and are stretching to hit a payment. An ARM is a fit only when the borrower understands the adjustment caps and the worst-case payment, so lead with both before the starting rate. Do this today: Run a 5/1 ARM next to the 30-year fixed for your three tightest-budget unlocked purchase files, including the payment at the first adjustment cap, and walk each borrower through it before CPI lands.