Buy the Gap. Why I Would Look Before New Year's.
The 10-year Treasury just slipped under 5%. Markets expect a Fed hike in December. In my opinion, the weeks in between are worth your attention.
The Facts, Short
The 10-year broke under 5%
On Oct 22 the 10-year yield fell roughly 17 to 19 basis points to about 4.96%. CNBC reported it as the first close under 5% since late September and the biggest one-day drop since March 2023. It sat near 4.99% midday Oct 23.
Two weeks ago it was 5.36%
The 10-year peaked near 5.36% on Oct 7, the highest since 2002. The drop came from investors moving money out of AI and tech stocks and into bonds. Flights to safety can reverse fast.
December is the wild card
CME futures price roughly a 78% chance of a Fed hike in December and only about 7% for the Oct 27-28 meeting. Freddie Mac's 30-year average is still around 7.3%, so mortgage rates have not caught up to the bond move yet.
My Opinion, Labeled as One
There is a gap between a bond market that just eased and a Fed that may tighten in December. If yields hold, mortgage rates tend to follow with a lag. If December brings a hike, that window may close. That is my read, not a promise. Nobody knows where rates go next, including me.
Why Before New Year's
Mortgage rates track longer-term bond yields, not the Fed rate directly. The bond move happened this week. The mortgage move, if it comes, usually shows up later. Being pre-approved before that happens means you can act when it does, instead of starting paperwork while everyone else does too.
Year-end is also quiet. Fewer buyers shop over the holidays, which in my opinion can mean more room to negotiate. And if rates fall later, a refinance may be an option. If they rise, you already bought.
If You Are a Physician
Contracts, start dates, student debt. Your file takes more setup than a W-2 file. Get it done now so you are ready if the gap opens. See physician loans. Building instead of buying? Ask about construction-to-permanent financing. Served? VA loans may be worth comparing.
What this means for your rate, your budget and your timeline is the part I will not guess at in a blog post. That takes your facts.
Your Situation, Not the Headline
Are you overpaying on your mortgage? Not sure?
Just ask Rosie. Find out instantly at seanshallis.com. Or book 15 minutes with me and bring your questions.
Learn more: The Fed Will Probably Hold · Treasury Over 5% · Buy When Rates Rise
These are my own personal opinions as an individual market observer. They are not the views of any employer, lender, bank or institution, none of which has reviewed or approved this post. Nothing here is financial, investment, tax or legal advice.
Sources (public reporting): CNBC, Oct 22 and Oct 23, 2026; Yahoo Finance, Oct 2026; CME FedWatch as reported; Freddie Mac Primary Mortgage Market Survey. Figures are third-party data as of publication and change continuously. Futures pricing is other parties' expectations, not fact, and may be wrong. “The gap” is my opinion, not a prediction.
Nothing here is a rate quote, an offer of credit, a commitment to lend or a guarantee of any rate, price, savings or outcome. Refinancing later depends on future rates, your credit and costs, and is not guaranteed. All loans subject to credit approval and program guidelines; not all programs available in all states or for all loan amounts.
Sean Shallis · NMLS #2362814 · Equal Housing Lender