Mortgage rates are a hair better today, with bond yields moving back below 5% on cooler-than-expected inflation.
At last glance, the bellwether 10-year bond yield was down about six basis points to around 4.98%.
That’s thanks to a mixed bag of economic reports released this morning, including PCE and GDP.
The move also incorporates the Fed meeting from yesterday, in which they held rates firm as expected and reiterated they’d take things one step at a time.
Despite that, mortgage rates appear mostly stuck at these higher levels with little to set them free.
Inflation Data Cooperates, Sending Bond Yields and Mortgage Rates Lower
The Fed’s so-called preferred inflation gauge, the personal consumption expenditures (PCE) price index, showed headline PCE up 3.6% from a year earlier, which was just below expectations of 3.7%.
In addition, core PCE was up 3.1% in September, which was exactly in line with forecasts.
So while inflation is still front and center, it didn’t get any worse than feared despite the ongoing conflict in the Middle East.
That was the big report we needed to cooperate and it did what it needed to do.
It explains why bond yields are dropping today, with the 10-year down a sizable six basis points or so to 4.98%.
For bond investors, that’s what matters. Inflation eats away at the value of a bond’s fixed payments, so any hint of it getting worse tends to send yields higher. And vice versa.
If the move holds, mortgage rates should drift a little lower today as well, though it won’t be a major difference from yesterday.
Simply put, it’s not going to make or break your loan application, but it’s better than going even higher.
[Try out my mortgage rate calculator to quickly compare different rates and payments.]
Why Isn’t Hot GDP Pushing Mortgage Rates Higher?
Normally, signs of a hot economy spell bad news for mortgage rates.
The other big report we got today was GDP, which revealed that the economy grew at a 3.4% annualized pace in the third quarter, exceeding the 3.1% forecast.
Strong economic growth puts pressure on the Fed to hike, so Warsh will have less room to defend his current wait-and-see approach.
Of course, that seems to be priced in already with the odds of a quarter-point hike at the December meeting hovering around 80%.
Additionally, tech earnings from Alphabet led to a selloff today, which has been a big driver for lower mortgage rates lately.
This might explain why bond yields are still quite a bit lower on the day despite the mixed data.
We also got weekly jobless claims today, which came in at 194,000, slightly below the 200,000 forecast.
It’s yet another sign that the labor market seems to be holding up just fine, though we do get the monthly BLS jobs report next Friday.
Mortgage Rates Appear to Be Elevated for Longer
The cliché “higher for longer” thing sounds better as “elevated for longer” to me.
The slight difference in framing is rates aren’t necessarily going any higher, but are staying elevated for a longer-than-anticipated period of time.
In other words, we might be stuck with these 7%+ mortgage rates for longer than we thought.
Not necessarily going back to 7.5%, 8%, etc.
There are still too many things in the way of markedly lower mortgage rates, including intense AI spending and the Middle East conflict, which could get worse.
On the one hand, that means we aren’t going to get any major relief until those things go away.
On the other, it means there are possible levers to pull to get mortgage rates lower again.
We know what needs to happen. If we make those things happen, we can get real relief.
The good news for now is mortgage rates avoided any major setbacks related to the Fed meeting and the many economic reports released this week.
Read on: How are mortgage rates determined?
- Mortgage Rates Catch a Small Break Despite Hot GDP - October 29, 2026
- Mortgage Rates Under Pressure Ahead of Fed Meeting and Inflation Data - October 28, 2026
- AI Spending Hot Again, Remains the Wild Card for Mortgage Rates - October 27, 2026