Weekly Mortgage Market Update: Mortgage Rates Near 3-Year Lows as Volatility Returns
Mortgage rates held remarkably steady for most of the week, staying close to their lowest levels in nearly three years as traders waited for a new economic direction. Early in the week, calm conditions and a federal holiday kept bond markets quiet, leading to minimal rate changes. But that calm didn’t last. By Thursday, a wave of volatility hit the markets as investors digested shifting headlines on trade policy, renewed concerns in the banking sector, and conflicting signals from recent Fed speeches. Bond yields swung sharply as traders recalibrated expectations for inflation, future rate cuts, and overall economic momentum. This serves as a reminder to borrowers that even in a low-rate environment, market sentiment can shift quickly.
Trade Tensions and Bank Headlines Stir Volatility
The calm broke after new headlines reignited uncertainty around U.S.–China trade relations. Comments from Washington suggesting possible 100% tariffs on select Chinese goods initially pushed bond yields lower and gave mortgage rates a modest boost. However, after those remarks were walked back on Friday, yields bounced slightly higher to close the week.
At the same time, news from regional banks added fuel to the volatility. Reports of loan losses at Zions Bancorp and Western Alliance briefly spooked investors, raising questions about credit risk and economic health. The short-term bond market reacted sharply, but once liquidity fears subsided, longer-term yields stabilized—ultimately keeping mortgage rates near their best levels of the fall.
For borrowers in Raleigh and across the Triangle, these swings highlight how sensitive rates remain to market headlines and sentiment shifts. Even modest changes in bond yields can quickly impact mortgage pricing.
Mortgage Bonds Outperform Broader Markets
Despite the market turbulence, mortgage-backed securities (MBS) held up better than Treasuries, giving lenders room to keep pricing aggressively. That resilience helped push mortgage rates near their best levels since 2022, with many 30-year fixed loans holding in the mid-6% range for well-qualified buyers. FHA Streamline and VA IRRRL refinance programs have been especially strong, offering some of the lowest rates available and making this an excellent window for homeowners to explore reducing their monthly payments.
The combination of lower rates and easing inflation pressures continues to support buyer demand in the Raleigh, Cary, and Wake Forest housing markets, where affordability has recently improved after two years of steep rate increases.
What’s Ahead: Key Reports to Watch
The week ahead may bring fresh direction to rates, particularly as markets digest a packed schedule of data and Fed commentary, even amid the ongoing government shutdown that’s delaying many official releases.
Economic Calendar Highlights (Week of October 20, 2025):
-
Tuesday, Oct 21: Fed Waller speeches and NY Fed Treasury purchase data.
-
Wednesday, Oct 22: MBA Mortgage Applications report — a key indicator of homebuyer demand and refinance activity.
-
Thursday, Oct 23: Jobless Claims (subject to delay due to shutdown), plus Existing Home Sales for September.
-
Friday, Oct 24: Private-sector inflation readings, including Core and Headline CPI, alongside S&P Global PMIs and New Home Sales.
Private-sector releases like CPI and PMI may carry outsized influence this week since they’ll fill the data void left by paused government reports.
Local Outlook
For North Carolina homeowners and homebuyers, the outlook remains favorable heading into late October. With mortgage rates near multi-year lows and Raleigh-area inventory improving slightly, many buyers are seizing the opportunity to lock in rates before the next data-driven shift.
Refinancers are also re-entering the market as home equity levels stay strong across the Triangle. A quick review of your mortgage scenario could reveal real monthly savings opportunities.
Bottom Line
Mortgage rates remain near their lowest levels in three years, but volatility is back. The next few weeks could bring sharper movements depending on inflation data and evolving Fed guidance.
For buyers and homeowners in Raleigh, Durham, and surrounding communities, this is an ideal time to explore mortgage options while rates remain favorable.
