Category: Interest Rates (Page 1 of 31)

The 2026 Mortgage Playbook: How to Use Today’s Market to Build Wealth Faster — Even Before Rates Drop

December 8, 2025 / Tom Bonetto / 0 Comments

Most buyers today are waiting. Waiting for rates to fall, waiting for the “right time,” waiting for the market to feel calm again.

But here’s the truth: those who wait often lose the most. In real estate, time in the market almost always beats perfect timing of the market.

As The Lending Coach, my job isn’t just to quote a rate and send my clients on their way. My goal is to help them use the market as it is today to move closer to their long-term wealth goals.

And right now, 2026 looks to be full of smart opportunities—if you know where to look.

Why Waiting for Rates to Move Can Cost You More

Rates get all the headlines, but home prices usually tell the real story. Historically, when rates rise, home prices may slow—but they rarely fall in a meaningful way.

And once rates drop, competition floods back in, pushing prices up even faster.

This creates a common trap:
Buyers wait for rates to fall…
Rates finally fall…
Prices jump…
And the “savings” disappear.

Your best advantage is often to buy the home before everyone else comes off the sidelines.

Smart Ways to Win in Today’s Market

basketball coach strategizing on tactics board

You don’t need to wait for the perfect rate to put yourself in a strong financial position. You just need the right strategy. Here are a few powerful tools that can help you take advantage of today’s conditions:

1. Permanent Rate Buydowns

In today’s purchase market, many sellers are willing to give concessions to buyers. Many of my clients are using those concessions to buy down their mortgage rate using discount points. More on that here…

Many clients are able to move their 30-year rate into the mid-to-high 5% range, setting them up for lower payments over the life of the loan.

2. Temporary Buydowns (1-0, 2-1, 3-2-1)

These are fantastic for easing into your payment while you grow into the home—or while waiting for a future refinance opportunity.

Like I mentioned earlier, sellers are offering concessions more often right now, which means buydowns can often be funded without increasing your out-of-pocket cost.

3. Refinancing Strategy (“Marry the House, Date the Rate”—Done the Right Way)

This isn’t about chasing rates with blind optimism.

It’s about having a planned refinance strategy based on market indicators, equity targets, and short-term affordability. When done correctly, today’s purchase can position you for tomorrow’s lower payment without missing appreciation.

4. Adjustable-Rate Options Built for Shorter Time Horizons

ARMs aren’t for everyone, but they can make perfect sense for buyers planning to move, upgrade, or refinance within a structured timeline. When used strategically, they can lower your payment and maximize your cashflow.

5. The Term of Your Loan is Paramount

The most common length of a mortgage is 30-years. But 20-year and 15-year options exist, too.

Yes, the payment will be larger, but not as high as you might think. The good news: mortgage rates are generally lower for 20-year and 15-year fixed mortgages.

More importantly, the amount of money going to principal versus interest is dramatic with loans of shorter duration. I’d be happy to show you the amortization schedule of a 30-year loan versus a 20-year loan.

You will be amazed at how you can build equity much faster this way!

6. Homebuyer Coaching to Align Decisions With Long-Term Goals

One of the biggest advantages you can give yourself is working with a mortgage professional who understands your goals—not just your application. A step-by-step plan can help you make decisions confidently now, instead of freezing in place.

A Simple 2026 Game Plan (Based on Buyer Type)

First-Time Buyers

Your focus: getting into the market and letting time and appreciation go to work for you.

Opportunities: seller concessions, buydowns, down payment assistance, and creative loan structuring.

a person giving a bundle of keys to another person

Move-Up Buyers

Your focus: using today’s slower tempo to negotiate better terms, then refinancing into a lower payment later.

Opportunities: contingent offers, pricing negotiation, and equity-driven planning.

Investors

Your focus: leveraging the soft spots in the market where competition has thinned out.

Opportunities: DSCR options, blended financing, and BRRRR-friendly structures.

You Don’t Need Perfect Timing—You Need the Right Plan

Success in today’s market isn’t about predicting the future. It’s about positioning yourself well no matter what the future brings.

If you’ve been thinking about buying—but feeling unsure—let’s take a few minutes to build a personalized strategy together. I’ll help you understand your options, compare scenarios, and map out the clearest path toward your long-term goals.

This market rewards the prepared. Let’s build your 2026 plan now.

Do reach out directly to me to begin crafting your plan!

As always, you can set up an appointment with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Starlight Mortgage. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Fannie Mae and Freddie Mac Reforms – A Podcast: Affordable Housing Ideas from Two Loan Originators

December 2, 2025 / Tom Bonetto / 0 Comments

I recently sat down with Mike Nelson, a mortgage originator and host of the Mosaic Podcast.

We discussed some ideas that should be debated at the government levels regarding interest rates and home affordability.

I’d invite you to take a listen!

Here’s the link…

Specific Podcast Timestamps:

1:05 – Introduction
2:38 – Setting the Stage
5:02 – Ideas for Reform: Debt-to-Income and Residual Income
9:02 – The Importance of the Credit Score and Asset Utilization
12:12 – Over Regulation and Costs Associated with them
19:30 – Loan Level Price Adjustments Causing Rate Increases (2^nd homes/investment properties)
24:21 – 401(k) Utilization Without Penalty for Home Purchases/Gifts
25:28 – ‘Streamline’ Refinances for Conventional Borrowers
27:00 – Non-QM versus QM
29:00 – Government Debt and How It Impacts Mortgage Rates
32:19 – Is Real Estate Still a Good Investment?
33:55 – The Federal Reserve and The Data
37:00 – Final Thoughts

I hope you find it interesting, and feel free to reach out directly to me to discuss it further.

As always, you can set up an appointment with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Mortgage Rates Jump After the Fed’s Rate Cut — Here’s Why

November 3, 2025 / Tom Bonetto

If you’ve heard that the Fed cut interest rates and wondered why mortgage rates rose instead of fell, you’re not alone.

It’s one of the most common misunderstandings in the market—and last week’s Fed meeting was a perfect example of why that happens.

The Federal Reserve lowered its benchmark rate by 0.25%, and also announced the end of quantitative tightening (QT)—its long-running effort to reduce bond holdings.

Both moves were widely expected, and neither created a big market reaction on their own.

But when Fed Chair Jerome Powell spoke during his press conference, he made it clear that another rate cut in December was not guaranteed.

When asked about a rate cut in December, Powell stated “it’s not a foregone conclusion – far from it.”

That comment alone shifted market expectations, sending Treasury yields and mortgage rates higher within hours.

Why Mortgage Rates React Differently

Mortgage rates don’t move directly with the Fed’s rate changes. Instead, they follow the bond market, which constantly adjusts based on what investors expect the Fed will do next.

When Powell signaled uncertainty about future cuts, bond traders adjusted those expectations upward—pricing in fewer rate reductions ahead.

That caused bond prices to fall and yields (and mortgage rates) to rise.

In short:

The Fed’s current rate cut = already expected.
Powell’s tone about the future = what moved rates higher.

As a result, the average 30-year fixed rose back to levels last seen in mid-October, even though it remains lower than most of the past year.

What’s Next for Mortgage Rates

With the Fed now taking a more cautious approach, the market’s focus shifts back to the economic data that’s been delayed by the government shutdown.

Upcoming reports on jobs and inflation will likely set the tone for where rates go next.

If those reports show inflation cooling or job growth slowing, we could see another move lower in bond yields—and, eventually, mortgage rates. But until that happens, expect volatility to continue around Fed commentary and inflation data.

What This Means for Homebuyers

Even though rates ticked up after the Fed meeting, they’re still hovering near some of the lowest levels in the past year.

For buyers and homeowners considering refinancing, this period remains one of the most favorable we’ve seen since 2022.

Here’s what to do now:

Lock in a rate if you’re under contract or close to applying.
Stay informed—the next inflation report could open another window of opportunity.
Plan ahead—today’s movement shows how quickly markets react to Fed comments.

Reach out to me today to discuss your current situation and to make sure you are not missing out. I’d be happy work with you and explore options.

If it’s easier, you can schedule a call with me here…

Mortgage Rates Over the Past Three Weeks: What’s Changed

October 14, 2025 / Tom Bonetto

orange calculator beside the black smartphone

Over roughly the last three weeks, U.S. mortgage rates have edged downward, reaching their lowest levels in about a year.

According to Freddie Mac’s most recent data, the average 30-year fixed mortgage rate fell to 6.30 % from 6.34 %.

This decline is modest, but meaningful in the current interest rate environment — especially given how tightly rates have been trading lately.

In prior weeks, there was also a rebound in rates: for example, the week ending October 2 saw average rates rise from 6.30 % to 6.34 %, as Treasury yields ticked upward.

But the recent movement has tilted downward again, amid growing caution about economic strength.

Recent Months to Today

As of October 14, 2025, the average 30-year fixed mortgage rate stood at 6.30 % — down from 6.34 % the prior week.
Over the past several weeks, rates have settled in their lowest band in roughly a year.
Earlier in 2025, rates were higher — in many places above 6.8 % or even close to 7.0 % for conforming loans, depending on timing and market conditions.
Looking back further, we see that since 1971, the long-term average 30-year fixed rate is about 7.71 % (through 2025)
In other words, current rates are still below that historical average, though far from the ultra-low rates seen in the 2010s and early 2020s.

Why Rates Are Moving: Key Drivers

To understand why mortgage rates have shifted, it helps to zoom out and see the levers that push long-term borrowing costs:

1. Treasury yields & the bond market

roll of american dollar banknotes tightened with band

Mortgage rates are closely linked to longer-term Treasury yields (especially the 10-year). When investors buy Treasurys, yields fall; when they sell, yields rise. Mortgage lenders price based on these benchmarks.

In recent weeks, Treasury yields have shown some softness, reflecting investor appetite for safer assets amid economic uncertainty. That downward pressure on yields helps bring mortgage rates lower.

2. Economic data & inflation

Every inflation report, employment release, and GDP update can swing expectations about future interest rates. If inflation shows signs of sticking higher, markets will demand higher yields (and mortgage rates) to compensate.

Conversely, weak jobs or growth data can boost expectations of rate cuts and push long yields lower.

In recent weeks, signs of softening in labor markets have grown more pronounced, which has helped ease rate pressures.

3. Federal Reserve policy expectations

The Fed doesn’t set mortgage rates directly—but its policy decisions and forward guidance are central to rate expectations. Markets are watching how many cuts the Fed will enact in 2025 (and how fast) and how strongly it will resist inflation.

Recently, the Fed has signaled caution, acknowledging that inflation risks remain. But weaker labor data may give it more room to ease.

4. Supply, demand & housing market sentiment

Mortgage rate movement also reacts to credit demand, lender competition, and overall confidence in the housing market. As rates dip, some borrowers respond quickly with refinance or purchase activity. That can feed back into pricing dynamics.

In fact, even small rate reductions lately have triggered increases in refinancing inquiries.

Also, broader uncertainties — such as the current U.S. government shutdown — create additional caution in markets, which can tilt toward lower yields (and lower mortgage rates).

What to Watch Next: Forward Outlook & Risks

Given where we are, here’s what I see as the main potential paths forward — and what borrowers should watch for.

Base Case: Modest Further Decline or Plateau

Most forecasts expect mortgage rates to stay where they are or possibly drift modestly lower through late 2025. For example, Fannie Mae recently revised its year-end expectation to 6.4 %, and 2026 to ~6.0 %.

Other analysts believe rates will more or less stay in the 6.2 %–6.6 % range through year-end, depending on economic data.
If inflation continues to ease and labor markets soften, bond yields could fall further, dragging mortgage rates down with them.

Upside Risk: Rates Could Rise

If inflation surprises to the upside, markets could push yields (and thus mortgage rates) higher.
Strong economic data — especially in jobs, consumer spending, or corporate profits — could make the Fed more reluctant to cut or even force it to reconsider policy tightening, which would ripple through longer-term yields.
Global or fiscal surprises (e.g. government shutdowns, debt ceiling worries, geopolitical events) can trigger volatility in bond markets, pushing rates upward.

Final Takeaways for Borrowers & Homebuyers

It’s not a dramatic rate cut that is in play — the recent moves are incremental. But every basis point matters when you’re financing a large amount.

If you’re in the market now and your numbers make sense, don’t wait on “perfect” rates. Locking something in is often better than trying to time the bottom.

Also, do keep a close eye on inflation numbers, payrolls/unemployment data, and Fed communications. These will be the levers moving rates in the coming weeks.

Finally, for clients who are refinancing or planning purchases in 2025, building in some “wiggle room” (i.e. rate buffers) is prudent given the potential volatility.

Reach out to me today to discuss your current situation and to make sure you are not missing out. I’d be happy work with you and explore options.

If it’s easier, you can schedule a call with me here…

Have Recent Fed Cuts Caused Mortgage Rates to Rise?

September 25, 2025 / Tom Bonetto

As we have seen over the last few days, mortgage rates and bonds have actually worsened since the Federal Reserve cut their Federal Funds rate on September 17^th.

a red paper bag in the middle of red balloons with percentage symbols

Markets, including longer-term treasuries and mortgage rates, are forward-looking and often price in a Fed rate cut in advance of the actual Fed cut, once it has been clearly telegraphed.

I’ve read many articles recently that fall into the trap of disregarding the forward-looking nature of the market by measuring the effect of a Fed rate cut on longer-term rates and mortgage rates from the date of the cut.

More importantly, there are coincident economic reports that can greatly influence the move in interest rates subsequent to the cut.

The September 17^th Cut

Let’s look at a few examples. Most recently, the Fed cut rates on September 17 and the 10-year Treasury touched at 3.99% that day. Yields have risen since then to 4.17% (as of today), and a large contributing factor was the sudden drop in initial jobless claims on September 18 – the morning after the Fed cut rates.

The Fed’s rational for cutting rates, even though Core Personal Consumption Expenditures (PCE) is above their target, was because they were concerned about weakness in the labor market.

But initial claims showed a drop from 264K in the previous read to 231K. This significant drop, to some degree, is contrary to a weakening labor market, and didn’t support the Fed’s reasoning for cutting rates.

Prior to the Cut

Now let’s look at what happened before the most recent Fed cut on September 17. During his Jackson Hole speech on August 22, Chair Jerome Powell clearly telegraphed that a rate cut was coming. This was when the bond market started to react.

The day of the Jackson Hole speech by Powell, the 10-year Treasury was at 4.32%. By the time of the actual cut on September 17, the 10-year Treasury had dropped by over 25bp.

Additionally, mortgage rates dropped even more, thanks to a narrowing mortgage spread. So, looking at the change in rates after the Fed actually cuts ignores the market’s anticipation of the cut and leads to false narratives.

Recent History

There is a lot of historical precedent for this as well. Look no further than the Fed’s 50bp rate cut on September 18, 2024. The chart below paints a very clear picture.

In the two to three weeks prior to the actual cut, the 10-year Treasury made a significant drop in yield, and mortgage rates declined by a whopping 5/8%. Again, markets are forward-looking.

Subsequent to the Fed cut, mortgage rates and Treasuries remained stable until October 4, when the September 2024 jobs report was released. There was a huge upside surprise in job creations totaling 254K, which sent the bond market into a selloff.

We now know, from the QCEW, that it is likely that less than half of those jobs were actually created.

This is why we need to dig more deeply, and not only contemplate the market’s anticipation, but consider what factors caused interest rates to move subsequent to the Fed rate cut. Had the jobs number been less than market expectations, it’s highly likely that interest rates would have declined.

And the same story applied to the next rate cut on November 7, 2024. The chart below shows that mortgage rates were declining until another upside surprise in the job numbers released in early December caused them to bump higher. And this happened yet again after the December 18, 2024 cut.

Long Term History

Now, let’s gain a more historical perspective. As you can see over the long run, there is a reasonably good correlation between the direction of the Fed Funds Rate and mortgage.

We also need to look at what the Fed is leaning towards in their upcoming meetings The “Dot Plot” system is the Fed’s way of giving the public a snapshot of how its policymakers see the future path of interest rates, but it’s always subject to change as the economy evolves.

I don’t recall a more divided Fed with such wide disparities in opinion. Future Fed rate cuts this year hang tenuously on continued labor weakness. Therefore, strength in the labor market would likely take the expected two additional rate cuts through the end of 2025 off the table.

This puts enormous focus on the outcome of the September jobs report, which is set to be released on October 3. This will ultimately decide the direction of Fed cuts at their upcoming meetings.

All that said, another factor which must be contemplated is the market’s interpretation of whether a Fed rate cut could be too stimulative to the economy, bringing on an increase in inflationary pressures.

In Conclusion

As shown above, there are many factors that go into the reaction mortgage rates have to Fed rate cuts.

So, to simply state that mortgage rates and long-term Treasury yields rise when the Fed cuts rates is not only myopic, but a fool’s game, as it fails the deep thinking required to correctly analyze all the above considered.

Category: Interest Rates (Page 1 of 31)

The 2026 Mortgage Playbook: How to Use Today’s Market to Build Wealth Faster — Even Before Rates Drop