Bond market quiet into the weekend, with no new catalyst beyond what this week already delivered. The 10-year Treasury closed Friday at 5.09%, 1 bp under Thursday's 5.10%, as Mortgage News Daily described traders consolidating the week's rally rather than extending it. Bankrate's 30-year reads 7.46% this morning, unchanged from Thursday and Friday and 11 bps under Monday's 7.57% high. Freddie Mac's weekly PMMS stands at 7.40% for the week of October 15, flat from the prior week. The MBA's weekly survey for the week ending October 9 had its contract 30-year at 7.50% and purchase applications down 4% for the week, but that window closed before most of this week's bond rally.
Next up: September housing starts and permits are due by October 20, Freddie Mac's PMMS and weekly jobless claims on October 22, new home sales in the October 23 to 26 window, core PCE in the October 23 to 30 window, and the FOMC on October 27 to 28, a meeting with no dot plot. The 10-year's hold near 5.09% is the level to watch going in; a move back above 5.19%, Wednesday's close, would take this week's improvement back off the table.
On range, Bankrate's 7.46% is still at the rich end: its 30-day window runs 7.06% to 7.57% with a 7.36% average, and its 90-day window runs 6.61% to 7.57% with a 6.97% average. With the conventional level parked, the lens worth shifting to is government loans. Bankrate's FHA 30-year reads 7.24% and its VA 30-year 7.20%, 22 and 26 bps under the conventional 30-year, while its jumbo 30-year reads 7.54%, 8 bps over it. Those three series resumed in mid-August, and since then FHA's range is 6.32% to 7.24%, so FHA is sitting at its high since the series restarted; VA's range is 6.34% to 7.28%, and jumbo's is 6.74% to 7.66%. On a $400K loan, principal and interest runs about $2,786 a month at the conventional 7.46%, $2,726 at FHA's 7.24% and $2,715 at VA's 7.20%, before mortgage insurance or funding fees, which change the comparison and belong in every side-by-side.
The focus today is purchase borrowers who were quoted conventional only, especially those with smaller down payments or VA eligibility, since the note-rate gap is 22 to 26 bps and the all-in answer turns on mortgage insurance, funding fee and down payment rather than the rate alone. For in-flight conventional locks, the 7.46% level is 11 bps better than Monday with major prints still ahead next week, so a borrower closing inside 30 days who floats through housing starts and the October 22 survey is putting that 11 bps at risk for whatever those prints add. Do this today: run a conventional, FHA and (where eligible) VA side-by-side, including mortgage insurance and funding fee, for every active purchase file under 10% down and send it before Monday.