Good afternoon and Happy Friday. Below is your Market Update, written each Friday personally by myself for you to keep on top of the local real estate and mortgage markets. 🙂
Interest Rates and Mortgage Bonds (Interest Rates down slightly week-over-week) – Mortgage bonds continued to slide finishing at 4.933% by end of the week and down from end of last week 4.999%. I would have expected more, especially with two -750 days on the Nasdaq, usually money rotates to bonds when stock markets perform bad and it just didn’t move in a large fashion. As of right now, Mortgage News Daily has the average 30 year fixed conventional nationally – 7.27% (Last Friday was 7.37%). A continued small trend in the right direction. The Federal Reserve voted 10-2 to leave interest rates neutral. Chances are still elevated for a .25% hike at the December 2026 Meeting (CMEFedWatch Tool has 72% chance of a hike on December 09, 2026). PCE was still elevated at 3.6%, which is above The Fed target rate of 2.00% but still appears to pretty much be being impacted by Iran, oil, gas, diesel, and Ukraine for direct or indirect challenges to inflation overall. I have been reading alot, many are saying the earlier peak in interest rates for early October 2026 – was potentially the peak in interest rates moving forward? Milestones the next couple of months will have something to say about the direction of monetary policy.
Real Estate Locally – Almost every transaction has some sort of large seller contributions or seller-paid 2/1 buy-down concessions. It is almost expected now. Weirdly, some listings just sit and others sell within a couple weeks. Location, location, and location is the primary difference, then quality of construction or amenities, and finishing with a push for low property tax + limited or no HOA. These seem to be the hot-buttons for many recently. Weirdly, high-cost homes seem to still be having interest, with many of those offers being written without the need for mortgage financing.
National Numbers & Outside Influences on R/E and Mortgage Markets – 1) GDP came in better at 3.4% vs the expected 3.1% – hotter than expected and being fueled by AI and Data Center Construction spending. 2) European Central Bank Head LeGarde stepped down 9 months early and in peculiar fashion. 3) Headlines are echoing this week, “Housing is signaling warning signals”, per CNBC and others saying housing is slowing. 4) A report this week comparing market of 2008 to today, Goldman Sachs indicating that 2% of national homes are under-water. This is actually a good number. Nowhere close to 2008 explosion of defaults. 5) To offer clarity, home prices fell last month, but they fell 0.1%. Rents were up, but they were up 0.1%. Both are minor moves, yet headlines make it seem worse than the numbers? Nationally, a Multi-Family 7% vacancy rate was reported. Rents dipped in Austin, Vegas, and Phoenix. While San Francisco rents exploded upward 13% YOY. 6) Purchase index 129 – down 60% from pandemic peak and down 18% YOY. 7) Mortgage applications at lows not seen since 1996.
Next week Reports – 1) ISM Manufacturing, 2) PMI, and 3) Labor Statistics could move the markets.
Mortgage News – Loan limits for Riverside and San Bernardino for 2027 were increased from $832,750 to $850,000. We are accepting the new 2027 loan limts for closings as of today, yes 2.5 months early. On another note, Director Pulte is still pushing for renewable Title Insurance on refinances, reduced credit report fees, reduced Fannie Mae and Freddie Mac LLPA’s, and more on appraisal waivers. This discussion of a second bill comes after last week’s bill 1) Seeking more methods to quickly remove mortgage insurance from current mortgages in the system, that meet the requirements vs waiting for consumers to signal. 2) Ordered Secretaries of the VA and USDA to drop interest rates down in VA and USDA – to make those more affordable than other open-market interest rates.
Product Updates or Enhancements – Our 100% Financing with Grant and $15k forgivable Grant both were expanded to December 31, 2026. 2027 FHA Loan Limits should be out early December 2026. Lastly, 12 months bank statement or self-employed 2nd TD’s are becoming more prevalent.
Overall Discussions we are having – 1) As we head into Fall/Winter, this could be setting itself up for a solid to extreme buyers-market for those sitting on the fence. Many are sitting on the sidelines and getting serious during the holidays, when competition is muted, writing potential offers that work for the buyer, and asking for massive concessions from the seller. Many are discussing tying up a property during the holidays and closing early 2027. 2) Others are sitting to see on interest rates, weather, mid-terms, and how monetary policy will be formed under a new Congress and Senate. 3) Some are just sitting it out, outright or have decided to go ahead and buy now. Conclusion – I write this and I am just passing on the thinking of many, when speaking to my peers, realtors, and actual knowledge of sitting open houses. Most of my personal conversations with clients are rate, affordability, and timing. As of today, we are now entering the beginning stages of Fall/Winter. Some open houses have had average to above average traffic (others having very little) and yes there are still buyers out there looking. Disclaimer – None of us have a crystal-ball and this is ultimately your decision. I am really just passing along the information. 🙂
Enjoy your weekend, hope you found this report helpful, and I am around for any questions. Take care.
From The Desk of Tom Santos – October 30, 2026. Happy Halloween!
