Slightly lower mortgage rates finally pause slide in housing demand

Lower mortgage rates finally stopped the decline in housing demand last week. After mortgage rates peaked around 7.60% and fell toward 7.30%, housing demand stopped bleeding temporarily, and we saw a smidge of growth during one of the bond market’s more volatile weeks in 2026. As we enter the last week of October, let’s review what happened with the 10-year yield, mortgage rates and housing demand and what it means for the rest of year. 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% What a crazy week in the bond market! On Friday’s podcast, Editor and Chief Sarah Wheeler and I discussed the madness of what happened, but to be honest, the whole month has been based on the 10-year yield holding the 5.35% level. Even with elevated oil prices and firm economic data, that key level holding and some weakness in the AI story brought the 10-year yield back below 5% last week, so mortgage rates are slightly lower than their peak. For now, the worst-case scenario of 8% and even 9% mortgage rates that people have been talking about is off the tab...