One word for you: "uncertainty," across both policy and markets, as the shutdown-delayed flow of economic data left lenders, investors, and regulators operating in a fog. The Federal Reserve reiterated that it cannot commit to further rate cuts until it can review labor-market and inflation data that have been missing for weeks. That wait-and-see stance kept Treasury yields confined to a familiar, narrow range despite mixed auction results: the 10-year note stopped through expectations with strong non-dealer demand, while the 30-year auction disappointed. Mortgage rates barely budged in Freddie Mac’s survey, with the 30-year fixed rising to 6.24 percent (still about half a percentage point lower than a year ago), reflecting the broader stasis in rate markets. But signs of stress beneath the surface were hard to ignore: subprime auto-loan delinquencies hit a record, small business sentiment slipped again, and concerns deepened that lower-income households are feeling the squeeze even as top-line economic data still look healthy.
Headlines also included a troubling governance issue: a confidant of FHFA Director Bill Pulte reportedly obtained confidential Fannie Mae pricing data and shared it with Freddie Mac, raising internal alarms at Freddie about the risk of appearing to collude with a competitor on mortgage pricing. The episode landed just as the Trump administration continued pressuring independent agencies, including the Federal Reserve and FHFA, stirring questions about political influence on housing policy. Meanwhile, Atlanta Fed President Raphael Bostic’s decision to retire in early 2026 added another twist, coming as the administration openly seeks to reshape Fed leadership. Yet the more immediate challenge for housing finance remains the absence of critical economic releases (e.g., CPI, PPI, retail sales, and potentially the September jobs report), all of which are unlikely to be published soon. Without these data points, markets and policymakers are/will be forced to make decisions with limited visibility.
On the consumer side, mortgage activity showed a mixed but still encouraging picture. Mortgage applications rose 0.6 percent for the week ending November 7, with purchase applications up 3 percent and a striking 31 percent higher than a year ago. Refinances, however, dipped 3 percent from the prior week, though remain nearly 150 percent higher year-over-year thanks to lower rates. Refinances still make up more than half of all activity, while ARMs remain a small 8 percent share. FHA and VA borrowers continue to represent meaningful portions of demand at 19 and 15 percent, respectively. But affordability remains a defining challenge. Industry veterans stressed that mortgage rates and home prices, while important, are only part of the equation; homeowners are being hit by rising insurance premiums, property taxes, and costly HOA fees and assessments. These issues, not just borrowing costs, are keeping many potential buyers sidelined.
I won't avoid the 800-pound gorilla in the room: the Trump administration floated what it called a major affordability solution: a new 50-year mortgage. FHFA Director Pulte touted it as a “game changer,” though President Trump publicly downplayed its significance. Industry reaction was far more skeptical. Experts were quick to note that while a 50-year term lowers monthly payments by roughly 10 percent, it dramatically slows the pace of equity building, often leaving borrowers with little or no wealth accumulation unless home prices rise reliably. With most mortgages lasting around seven years before a sale or refinance, the practical benefit of stretching amortization is limited. Moreover, the rate on a 50-year loan would almost certainly be higher than a 30-year’s because investors take on longer-duration risk, higher delinquency probability, weaker time value of money, and an illiquid secondary market. In short, the longer term may help monthly affordability on paper, but it would come at the cost of both wealth-building and pricing efficiency.
All told, we end the week grappling with an unusual combination of political drama, missing economic data, and policy experimentation...all while markets stay stuck in a holding pattern. Lenders face constrained visibility until the government statistical agencies resume full operations, leaving the labor-market outlook, and thus the Fed’s next move, uncertain. Affordability remains the defining challenge, but the proposed 50-year mortgage appears unlikely to deliver meaningful relief without significant trade-offs. With bond markets steady but underlying consumer stress rising, the coming weeks’ data catch-up will be critical in shaping rates, demand, and the broader policy conversation heading into year-end.