Senior LO highlights the bright side for buyers and welcomes a drop in mortgage rates at last
The Federal Reserve’s Wednesday decision to hold interest rates steady came as little surprise – but while that’s unlikely to move bond yields much, the mortgage industry has seen some cause for optimism in recent days with mortgage rates finally inching lower.
Average 30-year fixed mortgage rates had been on a precipitous climb, surging above 7% amid continuing bond market concerns about the swelling national debt and upward inflation pressure.
Kristin O’Neil, a Virginia-based senior loan officer at Open Door Lending, described herself as “cautiously optimistic” about the rate outlook for the coming months.
“It’s been a rollercoaster,” O’Neil told Mortgage Professional America. “Last week we saw rates drop to their lowest level in more than a month, and since then they’ve mostly held steady.”
That downward movement has been propelled in part by an investor shift away from AI-related stocks and into bonds, lowering yields and bringing down mortgage rates by extension.
O’Neil isn’t banking on a continued big drop but suggested a degree of calm would be welcome news for borrowers. “I think rates are more likely to stay in a range than to fall sharply, and I’m telling my clients to plan for that,” she said.
At the beginning of the year, few would have predicted that rates would climb above the 7% mark in 2026 – but with rate projections unreliable, O’Neil said she’s keeping her clients’ priorities on what they can control.
“We’re still focusing on the overall budget and payment,” she said. “Unfortunately, with rates as volatile as they have been these last few months, we can’t guarantee that rates are going to drop and we can’t be sure where they’ll land.
“So we run the numbers on today’s rate and look at options like seller concessions or a buydown to help the payment.”
The good news for buyers
Home prices, O’Neil pointed out, have held up despite higher rates – meaning waiting isn’t free. She’s advising clients that they can always look at refinancing in the future, but should also be comfortable with their payment at closing now in case the perfect opportunity never comes around.
Rising rates, meanwhile, aren’t necessarily a massive impediment for every buyer. Combating that perception is a key focus for O’Neil. “There are so many buyers right now who assume they’re priced out of the market,” she said.
“But because we’re seeing more seller concessions in our area, we’ve been able to get really creative with financing solutions that still fit their budget – whether that’s a permanent buydown, a temporary buydown, or a price reduction. There are a lot of different ways to structure a loan to get the payment to a comfortable level.”
Still, what applies to one potential buyer doesn’t necessarily work for the next. “I’m never someone who thinks everybody should buy right now,” she said. “If we run the numbers and it’s just not comfortable, then maybe you’re better off holding. But if the numbers work, at least in our market, it might be a really good time to strike.”
All eyes on upcoming economic data
A big factor in the future direction of bond yields – and mortgage rates – will be upcoming economic data, including a new inflation reading on Thursday (October 29), which will indicate how much of an impact rising fuel prices are continuing to have on the overall outlook.
O’Neil said she’ll be keeping an especially close watch on the labor market and the impact of the recent executive order signed by President Trump targeting mortgage insurance and refinancing costs.
“[The jobs market] has stayed strong with very low layoffs, which is part of why the Fed can keep its attention on inflation,” she said. “And on the housing side, there’s a recent executive order aimed at lowering the cost of homeownership, including how mortgage insurance is handled.
“Details like timing haven’t been released yet, so we’re keeping an eye on how it rolls out and what it means for buyers and homeowners.”
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