A path to sub-7% mortgage rates is back on the table

Housing demand has stabilized over the last two weeks as rates have fallen a tad, and we can finally see a clear path back to sub-7% mortgage rates. We survived the crazy month of October, when the 10-year had the potential to close above 5.35%, which would have created a backdrop of bond-escalation selling, sending mortgage rates above 8%. That didn’t happen, of course, as the 10-year yield held that key line!Not only has the 10-year yield now gone below 5% — with mortgage rates closer to 7% than 8% today — but what this month has shown us is that there’s a clear path for sub-7% mortgage rates. Just the move in the last two weeks has stabilized demand in our weekly pending home sales data, so let’s take a look on this Halloween on what needs to happen to get rates lower. 10-year yield and mortgage rates In the 2026 HousingWire forecast, I anticipated the following ranges: Mortgage rates between 5.75% and 6.75% The 10-year yield fluctuating between 3.80% and 4.60% Last week was Fed week, and even Fed Chair Kevin Warsh said tighter policy has created financial pain for some AI companies. The Federal Reserve has been talking more and more about AI being very inflationary for many wee...