Bottom line: The Fed’s 25 bp cut adds a gentle tailwind to a market that had already pulled 30-year mortgages into the low-6% range. From here, the 10-year Treasury and MBS spreads will do most of the driving, but for well-qualified 30A buyers—especially in warrantable condos and clean jumbo files—execution is improving. Translation: no sugar-rush rally, just a steadier backdrop where smart structure and early underwriting can capture real savings.
What changed today. The FOMC moved down 25 bps and signaled caution: the committee will “carefully assess incoming data,” and Powell said a December cut is “not a foregone conclusion.” The Board also adjusted administered rates (e.g., IORB to 3.90%) and directed SOMA operations accordingly. Translation: policy is easing at the margin, but the Fed isn’t promising an extended cutting cycle.
Where mortgage rates actually are. Freddie Mac’s latest survey shows the 30-yr fixed at 6.19% for the week of Oct 23—the lowest in 12+ months—with the 15-yr at 5.44%. MBA data indicate refi interest is re-awakening. The 10-year Treasury is ~4%—the anchor mortgages key off—so moves in that yield and the MBS–Treasury spread will dominate day-to-day mortgage pricing.
Labor → bonds → mortgages. The Fed cut in part because jobs data softened: U.S. unemployment ~4.3% (Aug), with Florida at 3.8%. Softer labor data tends to pull long yields lower; hot inflation or upside surprises can stall the rally. Locally, Walton County ~4.2% and Bay County ~4.4% in August signal some cooling but still relatively tight conditions on the Emerald Coast.
Projection (near term, 4–8 weeks). If the 10-year holds ~3.9–4.1% and MBS spreads stay contained, 30-yr fixed quotes likely hover ~6.0–6.3% into late Q4. A clean CPI/PCE and softer payrolls could test the high-5s; a hot print or spread widening would push us back up. (Market-path inference from Treasury/MBS levels and Fed guidance.)
Why spreads matter more than the Fed cut. Mortgage coupons equal 10-year Treasury + spread (credit, liquidity, convexity/servicing). In periods of stress or balance-sheet runoff, spreads widen and blunt the benefit of rate cuts. Elevated spreads today can keep mortgage rates higher than history would suggest—even with benign inflation.
What This Means on 30A (Second Homes, STRs, Condos, Jumbo)
Second homes. Agency LLPAs add cost vs. primaries; the exact hit depends on FICO/LTV and other features. In practice, second-home quotes often run ~0.25–0.50% higher than an identical primary file, sometimes more with higher LTVs. Clean files and conservative LTVs sharpen pricing.
Investment/DSCR. Investor channels tend to lag improvements in primary/agency quotes because capital demands wider spreads when volatility is high. Underwrite with today’s coupon; treat any spread compression as upside.
Condos (Alys, Rosemary, Seaside, PCB). Warrantability and Florida-specific standards drive access to agency execution. Budget reserves, special-assessment posture, and insurance compliance are decisive; non-warrantable pushes you to portfolio or non-QM. Pre-clear the HOA early.
Jumbo/private-bank desks. With the 2025 conforming limit at $806,500, part of the market stays agency; above that, private-bank/portfolio sheets can be very competitive—especially with AUM/deposit relationships.
