30-YR CONFORMING
7.38%Optimal Blue, Oct. 5 · up 9 bps week over weekJason Russell’s Market Report · Week of October 5, 2026
The 10-Year Is Fighting a 2007 Ghost (and Your Buyers Are Paying for It)
Rates are rising on bad economic news, which isn’t supposed to happen. Here’s what’s driving it and what to do with your listings and buyers this week.
10-YEAR YIELD
5.29%Highest reading since June 2025PRICE CUTS
43%Solano listings cutting price this weekBUYING POWER
−$46KSame monthly payment versus JulyVideo briefing
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Why bad news isn’t bringing rates down
Last week handed us a weaker jobs report, a cooler PCE inflation print, and Fed members sounding dovish. Normally that’s a recipe for lower rates. Bonds rallied for a few hours and then gave it all back, and the 10-year poked above 5.29% before closing just under it.
The oddity making the rounds is Japan. They’re the largest foreign holder of U.S. debt, their currency is weak, and selling Treasuries to defend the yen would push our yields up no matter what our own data says. Treat that as a theory for now. The Treasury data that would confirm it lags about 45 days, so we’ll see August numbers in mid-October and September in mid-November.
The part I’d focus on is the spread, the gap between the 30-year mortgage rate and the 10-year. It’s historically run around 1.60% to 1.80%. MBS Highway has it at 2.30% and widening as bond volatility (the MOVE index) hit 113 climbs. HousingWire’s math puts it at 2.04% and calls that near normal, which I don’t buy when their own historical range tops out at 1.80%. Either way, the spread is wide, and it’s the reason rates can stay high even if the 10-year calms down.
Solano County, this week
- Median list price
- $580,000
- Market Action Index
- 41 (was 42)
- Inventory
- 811 homes
- Price decreased
- 43%
- Average / median days on market
- 89 / 56
- Price per sq. ft.
- $335
- Median rent
- $3,090
The gauge still reads “slight seller’s advantage,” and I’d stop leading with that label. When nearly half of listings are cutting price and the average home sits 89 days, buyers have negotiating room, and the sellers who price to today sell while the ones pricing to spring chase the market down.
The national picture
- Pending sales vs. last year
- −10%
- Purchase apps vs. last year
- −14%
- Inventory vs. last year
- +4.4%
- New listings vs. last year
- Flat
- Price-cut share
- 42.8% (41.6% in 2025)
Demand is taking the hit first. Pending sales and purchase apps are both down double digits year over year, while new listings are holding steady. The risk to watch is sellers who simply decide not to list, because that would freeze inventory right as prices get pickier.
What I’d do with clients this week
- Re-run every pre-approval from the summer. A buyer approved in July at the same payment can borrow roughly $46,000 less today. Find that out now, before they fall in love with a house.
- Put seller credits ahead of price cuts. On a listing that needs to move, a credit toward a rate buydown usually does more for the buyer’s payment than the same dollars off the price. Send me the listing and I’ll run both side by side.
- Price listings to October. The 43% cutting price are the ones listed for a market that’s gone. The first price is the one that gets the showings.
What I’m watching
- Tuesday
- ADP weekly jobs, Fed speakers
- Wednesday
- Mortgage apps, 10-year Treasury auction, Fed minutes
- Thursday
- Jobless claims, 30-year Treasury auction
The auctions matter more than usual this week, since weak demand for Treasuries is the clearest sign the foreign-selling theory has legs. On the 10-year, 5.29% is the level to watch. If it breaks, the next stops are 5.43% (2002) and 5.52% (2001). You’ll hear 9% mortgage rates on CNBC, and that would take the 10-year near 6.80% plus a wide spread, which nobody I trust has as a base case. If a client is weighing whether to lock or float, have them call me directly, because that’s a one-on-one conversation built around their timeline.
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