The 10-year fell to 4.90% on the election. Mortgage rates haven't followed yet.

The 10-year fell to 4.90% on the election. Mortgage rates haven't followed yet.

Lender · Houston, TX · Member since 2026 · 121 posts · 23 votes

Bonds moved fast on the election results overnight. Mortgages haven't, at least not yet.

With Democrats projected to take both chambers, the 10-year Treasury dropped to roughly 4.90%. It was 4.91% Monday and 5.05% on October 28. The bond market's read is fiscal, not political: a split government makes a big new spending or tax bill harder to pass, which means less new Treasury supply. Stock futures sold off too, and that money went looking for safety.

Mortgage News Daily's 30-year index actually ticked up Tuesday, to 7.30% from 7.27%. Freddie Mac's weekly number is 7.24% and updates Thursday.

Here's how I'm thinking about it on a flip. On a $264,000 loan (20% down on a $330,000 house), principal and interest at 7.30% is about $1,810. Hold that payment constant and every tenth of a point is worth about $2,600 of loan to your exit buyer, roughly $266,600 at 7.20% and $261,400 at 7.40%. That's real, but it isn't a windfall, and I wouldn't build a resale price on a rally that hasn't reached borrowers.

On rentals it's even smaller. A $250,000 takeout runs about $1,714 a month at 7.30% and $1,697 at 7.20%. Seventeen dollars won't save a deal that doesn't cover.

The other side of the ledger: September job openings rose to 7.5 million and quits to 3.4 million, and markets still price about a 75% chance of a Fed hike on December 9. Friday's jobs report (consensus 55,000) and the Treasury's auction plan this morning decide whether 4.90% holds.

I put the longer write-up on my website, which you can find through my profile.

For those of you underwriting exits right now: are you pricing the resale off today's 7.30%, or are you already baking in some of this rally?

0Reply
115 views

3 Replies

Jump to latestLatest
  • Real Estate Agent · Dallas · Member since 2026 · 56 posts · 48 votes
    3d

    @Steve Waller Interesting breakdown. I agree that underwriting an exit based on a rate rally that hasn't translated into actual mortgage relief is risky. I'd rather price deals using today's borrowing costs and treat any rate improvement as upside rather than a baseline assumption. A deal should remain viable even if financing conditions don't improve as expected.

    Are you seeing buyers become more cautious with their offers these days?

    Probably sellers are beginning to adjust their price expectations?

  • Lender · Houston, TX · Member since 2026 · 121 posts · 23 votes
    1d

    Marisol, thanks, and sorry for the slow reply. Agreed on underwriting at today's cost and treating any improvement as upside. If a deal only works after rates fall, it isn't a deal yet, it's a bet.

    On your two questions, my read is yes to both, but price is usually the last thing to move. Buyers get more careful first: more inspection asks, more requests for seller credits, fewer offers over list. Sellers adjust in the same order. Concessions and days on market give first, and the outright price cuts show up on the homes that have already sat. A fresh listing rarely starts out discounted.

    In Dallas, are your sellers going to the credit first or straight to a price cut?

  • Member since 2021 · 86 posts · 79 votes
    12h

    Hey Steve — your payment math holds up. I reran it: $1,810 at 7.30%, and the $266,600 and $261,400 loan sizes at 7.20% and 7.40% are right on. Marisol's point — don't price an exit off a rally that hasn't reached borrowers yet — is the one I'd put on a sticky note.

    Both of the things you said would decide it have landed. Freddie Mac's Thursday number fell to 7.18% from 7.24%, its third straight weekly drop. Then Friday's jobs report came in at 165,000 against that 55,000 consensus, with August and September revised up 84,000 combined. Even so, the 10-year held near 4.9%.

    So some of the rally did reach borrowers, and it stuck: MND printed 7.17% Thursday and held there through Friday's jobs number. On your $1,810 payment, the Freddie move (7.24% to 7.18%) is about $1,600 of loan, and against the 7.30% MND print you anchored on, 7.17% is about $3,400. Real money, but small next to a rehab budget, and one extra month of carry on this house roughly cancels it.

    To your question: I'd price the resale off the latest Freddie print, not the overnight Treasury move. Mortgages are still running about 2.3 points over the 10-year, and a hot jobs number plus December hike odds near 75% can widen that gap as fast as it narrows.

    Curious what you're seeing from your side of the desk. Are lenders passing the drop through on rate sheets yet, or holding margin?

Join the conversationCreate a free account to reply, vote on answers and follow this thread.