Oil prices are falling again, but mortgage rates aren’t seeing much relief to start the week.
The reason might be that oil and the war have taken a back seat to tech stocks, which are up sizably on the day.
There seems to be a correlation between the two lately, with a recent stock market rout helping mortgage rates move a lot lower.
And with the bellwether 10-year Treasury yield up slightly today, mortgage rates should follow.
Still though, mortgage rates are around their best levels in two months and could be headed even lower soon.
Oil Is Doing Its Part, But Isn’t the Focus for Mortgage Rates Lately
Brent crude is down about 5% to roughly $93 a barrel, after rising above $112 at the start of the month.
The reason is progress with Iran, hopefully. President Trump told CNN that renewed strikes are “highly unlikely” if new talks are successful.
One of the recent drivers of mortgage rates has been higher oil prices thanks to the Middle East conflict, which began in late February.
If oil prices come down, it means inflation becomes less of a worry and that’s good for bonds (and mortgage rates).
Of course, hope of a deal does not equal an actual deal, and we’ve seen this movie a few times already.
But at least that piece is cooperating lately and not fanning the flames.
[Compare mortgage rates and monthly payments side by side with my mortgage rate calculator.]
The AI Trade Matters Most to Mortgage Rates Right Now
What began as a kind of fringe reason for higher mortgage rates is now a mainstream reason for them being a lot lower.
I wrote about how the massive AI buildout was potentially crowding out investors in mortgage-backed securities (MBS) back in late August.
That meant investors were chasing higher returns in places other than MBS, which led to even higher rates to boost demand.
But in recent weeks we’ve seen an AI/tech stock rout that has had a lot of folks questioning if those attractive returns are actually safe.
That has led to a classic flight to safety in something that’s guaranteed to deliver, government bonds.
And to some degree, MBS that are implicitly guaranteed thanks to Fannie Mae and Freddie Mac being government-sponsored enterprises (GSEs).
This might also explain why bonds kind of shrugged off the hot jobs report delivered on Friday.
Normally that would have led to a spike higher in mortgage rates, but the stock market selloff made sure it didn’t.
Strong hiring typically gives the Fed another reason to keep hiking, but right now the stock market is top of mind.
Long story short, investors might be thinking a 6-7% return (current 30-year fixed mortgage rates) is pretty darn good, and that means moving out of tech and into these bonds.
CPI Tomorrow Could Push Mortgage Rates Into the 6s, Or…
As if the current events aren’t exciting enough, we’ve got the October CPI report tomorrow morning.
A soft reading, plus cheaper oil and progress with Iran, plus continued pressure on stocks could give mortgage rates a shot at getting below 7%.
That would be a big win for sentiment, even if affordability remains quite poor.
The housing market has been very quiet lately, and simply getting headlines that say something like “6% mortgage rates” would be enough to wake it up some.
Conversely, a hot reading would pretty much lock in a December Fed rate hike, which is already above an 82% chance, per CME.
And Fed rate expectations can affect mortgage rates, thereby putting upward pressure on them.
So keep an eye on CPI tomorrow, and on any Iran/oil headlines, but perhaps a closer eye on the AI trade, which seems to be dictating mortgage rate movement the most lately.
Read on: How are mortgage rates determined?
- Oil Prices Keep Sinking, But Mortgage Rates Aren’t Getting Much Help - November 9, 2026
- What Happens to Mortgage Rates Post Midterms? - November 4, 2026
- Goldman Sachs Sees Mortgage Rates Falling to 6.4% in 2027 - November 3, 2026