Weekly Mortgage Rates

October 7, 2025

The Waiting Is The Hardest Part

Due to the government shutdown starting Tuesday night, we did not get the official BLS employment data last week. Markets had to rely on other lower-tier employment reports for clues on the job market.  Among those: JOLTS showed layoffs at the fastest pace since 2009, and ADP reported private sector jobs declining. 

ISM Services- represents more than half of our economy- contracted with declining business activity for the first time since 2020. A bright spot in the economy is still strong consumer spending, but inflation remains persistent in all these reports. 

Mortgage rates didn’t move much last week on the headlines, despite the weakening employment data. With key reports delayed by the shutdown, it is hard for markets to take decisive action in either direction.

Government Shutdown- Impact on Mortgage Rates 

We saw a slight improvement in mortgage rates after the shutdown as traders moved to safe-haven bonds. A normal occurrence during times of uncertainty. It wasn’t a big move but provided a temporary boost to pricing.

The shutdown can continue to impact rates by what gets negotiated and just how long it lasts. If it continues, we will not get the CPI inflation reading on October 15^th . This leaves the Fed flying blind going into their October rate decision meeting.

A Lesson From Japan

Over the weekend, Japan elected a new prime minister. Investors are concerned that her pro-spending policies will increase thier already enormous deficit. This could pressure long-term bonds to rise globally as well as in Japan. 

It illustrates why the rate path is not simple. Even Fed cuts could backfire if long-term bonds rise on fears of deficit spending and inflation. The bond market is really in charge and will ultimately say where long-term rates head. 

What’s Ahead

No major economic news will be available until the shutdown ends, so all the movement in mortgage rates will be based on how the shutdown progresses and geo-political events.

Market Strategies

The ICE mortgage monitor report just released shows home affordability has improved the most since 2022. Despite the weekly ups and downs with rates we point out each week in the update, mortgage rates have trended lower since that August 22^nd date we noted as the turning point for rates. That trend lower is still in place for now. With improving affordability and more negotiating room with sellers, discouraged buyers may want to relook at their options.