Mortgage Rates Hit Nearly 3-Year Highs Despite Weak Jobs

September’s jobs report looked like the kind of economic news that should help mortgage rates.

The U.S. economy added only 29,000 jobs in September. Unemployment increased slightly to 4.2%. Wage growth slowed to 3.0% over the past year, and July and August payrolls were revised lower by a combined 60,000 jobs. Bureau of Labor Statistics

Mortgage rates briefly improved Friday morning.

Then the improvement disappeared.

Mortgage News Daily’s national 30-year fixed index ultimately finished Friday at 7.57%, close to its highest level in years. Mortgage News Daily

That may seem contradictory, but it tells us something important about the mortgage market right now.

The Fed Is Only One Piece of the Mortgage Rate Puzzle

The Federal Reserve controls a very short-term overnight interest rate.

A 30-year mortgage is a long-term financial instrument.

That means mortgage rates are influenced much more directly by mortgage-backed securities and longer-term Treasury bonds.

Early this week, the 10-year Treasury remained around 5.25%, near levels not seen in decades. AP News

That is happening even though the newest jobs report points to slower employment growth and financial markets have reduced expectations for another Federal Reserve rate hike in October.

So what is keeping long-term rates elevated?

Investors are balancing several competing risks:

• inflation is cooling but remains above the Fed’s goal
• energy prices remain volatile
• government borrowing remains high
• global bond markets are under pressure
• investors are demanding more compensation to own longer-term debt

That last piece is especially important.

A Federal Reserve pause does not guarantee that the 10-year Treasury falls.

And if the 10-year stays high, mortgage rates can stay high with it.

Mortgage Rates Jumped Again Last Week

Freddie Mac reported that the average national 30-year fixed mortgage rate reached 7.28% on October 1, up from 7.03% just one week earlier.

It was the largest weekly jump in four years and the highest Freddie Mac reading in nearly three years. Freddie Mac

Freddie Mac’s survey is useful for identifying the broader trend, but it is collected earlier in the week.

Mortgage News Daily’s more current daily index finished Friday at 7.57%.

Neither number represents a guaranteed rate for an individual borrower. Actual mortgage pricing depends on credit, down payment, property type, occupancy, loan program, points and lock period.

For a personalized comparison, buyers can start with the Oklahoma Mortgage Group home-loan team.

Inflation Improved, But the Fed Is Not at 2%

The Federal Reserve’s preferred inflation measure was also released last week.

The Personal Consumption Expenditures Price Index increased 3.4% from a year earlier in August.

Core PCE, which removes food and energy, increased 3.0%. Bureau of Economic Analysis

Those readings were better than the previous report, but the Fed’s long-term inflation goal is 2%.

That leaves policymakers in an uncomfortable position.

Employment is clearly slowing, but inflation is still above target.

Following Friday’s employment report, markets shifted strongly toward the Fed leaving rates unchanged at its October 27-28 meeting rather than immediately hiking again. Reuters

For homebuyers, the important takeaway is that waiting for a Fed pause does not guarantee a lower mortgage rate.

We already have a market that increasingly expects a pause, yet long-term rates remain elevated.

Affordability Is Changing Borrower Behavior

The Mortgage Bankers Association’s newest weekly survey gives us a clear picture of what higher rates are doing.

Total mortgage applications fell 6%.

Purchase applications fell 4% for the week and were 14% below the same week last year.

MBA’s average conforming 30-year contract rate reached 7.30%. MBA

One number stood out.

Adjustable-rate mortgages accounted for 10.3% of all mortgage applications, the highest share since October 2025.

MBA said ARM rates were running roughly 80 basis points below fixed rates. MBA

That does not mean every buyer should use an adjustable-rate mortgage.

It does mean buyers are searching harder for ways to reduce the monthly payment.

That is where the financing conversation should start.

Stop Asking Only “What Is the Rate?”

When a buyer tells us the payment is too high, we have several variables to work with.

We can compare:

• sales price
• seller-paid costs
• permanent rate buydowns
• temporary rate buydowns
• fixed and adjustable-rate options
• conventional, FHA and VA financing
• available down payment assistance

For eligible buyers who need help preserving cash at closing, OMG offers access to a range of Oklahoma down payment assistance programs.

The right answer will be different for every borrower.

A buyer planning to stay in a home for 20 years may look at financing differently from someone who expects to move within five.

A buyer with plenty of cash but a payment concern may have a different strategy from a first-time buyer trying to preserve savings.

Before Reducing the Price, Run the Payment

This also changes how Realtors should approach a listing that is not getting activity.

Suppose a seller is considering another price reduction.

Before making the change, ask the buyer’s lender to compare the same dollars as a seller concession.

Depending on the borrower and loan program, the money could potentially be used toward closing costs, a temporary buydown or a permanent rate buydown.

A lower price may still be the best answer.

But when the biggest obstacle is the monthly payment, the financing structure deserves to be modeled before the seller changes the list price again.

Realtors who want help creating those comparisons can use Oklahoma Mortgage Group’s Realtor and Builder resources.

A Major HUD 184 Change Took Effect October 1

There is also a new loan-program change that matters more in Oklahoma than it does in many parts of the country.

HUD increased the upfront loan guarantee fee for new Section 184 Indian Housing Loan Guarantee Program Firm Commitments from 1.00% to 1.50% effective October 1, 2026.

The new fee applies to purchases and refinances receiving a new Firm Commitment on or after October 1.

The annual guarantee fee remains zero.

Existing Section 184 guaranteed loans are not affected. GovInfo

For eligible Native American homebuyers, HUD 184 can still be an important financing option.

The difference is that buyers and Realtors need to make sure older worksheets and payment comparisons are not using the previous fee.

More information is available through our Oklahoma HUD 184 Native American loan page.

Significant Assets but Low Taxable Income? There May Be Another Option

Waterstone’s Product Development team also highlighted PennyMac’s Non-QM asset-qualification options last week.

These programs are worth remembering for retirees, business owners and higher-net-worth borrowers whose tax returns may not show enough conventional qualifying income.

PennyMac’s Asset Qualifier/Depletion program allows eligible borrowers to use verified liquid assets as part of the qualification process.

Its broader Non-QM lineup also includes bank-statement, DSCR, full-documentation, WVOE and 1099 options. PennyMac Financial Services, Inc.

This is a scenario where involving the lender early can make the difference.

A borrower should not assume:

“I am retired, so I cannot qualify.”

or

“My tax return shows very little income, so buying is impossible.”

There may be a financing path that evaluates the borrower differently.

What Happened to the New Appraisal Deadline?

There was also a late change involving the new UAD 3.6 appraisal format.

Fannie Mae and Freddie Mac announced a temporary policy exception for approved sellers that are unable to complete their UAD 3.6 implementation by the November 2 mandate. Fannie Mae

This is an exception for lenders that need additional implementation time.

It is not a cancellation of the new appraisal system.

The industry is still moving toward the redesigned Uniform Residential Appraisal Report and UAD 3.6.

For Realtors and sellers, the practical advice remains the same.

Before an appraisal, make it easy for the appraiser to understand the property.

Have information available about major renovations, additions, permits, roof or HVAC replacement, kitchen and bath updates, structural repairs and other improvements that may not be obvious during the inspection.

What Could Move Mortgage Rates This Week?

This week is lighter on major inflation releases.

September CPI does not arrive until next week.

The biggest scheduled mortgage-market event is the release of the September 15-16 Federal Reserve meeting minutes on Wednesday, October 7 at 1:00 p.m. Central. Federal Reserve

Investors will be looking for clues about:

• how strongly Fed officials feel inflation remains a problem
• how much support exists for another rate increase
• whether weakening employment changes the Fed’s outlook

Because the domestic calendar is lighter, oil prices, Treasury auctions, global bond markets and government-debt concerns may have an unusually large influence on day-to-day rate movement.

What I Would Tell a Tulsa Buyer Right Now

Do not build a homebuying plan that requires mortgage rates to drop next month.

Maybe they will.

Maybe they will not.

Instead, find the payment that works today.

Then see whether we can improve it through the property negotiation, seller contribution, loan program, rate structure or down payment strategy.

If rates improve later, we can evaluate whether refinancing makes financial sense.

But the purchase should work without requiring a future rate drop.

If you want to compare different scenarios, contact Oklahoma Mortgage Group in Tulsa.

Sources

Bureau of Labor Statistics, September Employment Situation. Bureau of Labor Statistics
Bureau of Economic Analysis, August Personal Income and Outlays. Bureau of Economic Analysis
Freddie Mac Primary Mortgage Market Survey. Freddie Mac
Mortgage Bankers Association Weekly Applications Survey. MBA
Mortgage News Daily Rate Index. Mortgage News Daily
Federal Reserve October Calendar. Federal Reserve
HUD Section 184 Federal Register Notice