Craig Kamman • Edina Realty | Wayzata, MN • October 26, 2026
Current Rate Snapshot
Freddie Mac PMMS (week of Oct 22, 2026) — the standard weekly survey of contract rates on purchase loans:
| Loan Type | Rate | Change vs. Last Week | 1 Year Ago |
|---|---|---|---|
| 30-Year Fixed | 7.32% | ▼ −0.08% | 6.19% |
| 15-Year Fixed | 6.68% | ▼ −0.03% | 5.63% |
| 30-Year Jumbo | 7.47% | Bankrate daily lender survey (Oct 25) | |
| 5/1 ARM | 6.64% | Bankrate daily lender survey (Oct 25) | |
| 10/1 ARM | 6.81% | Bankrate daily lender survey (Oct 25) | |
Note: Freddie Mac PMMS measures contract rates on conforming purchase loans with 20% down and excellent credit. Bankrate daily lender surveys typically run 15–25 basis points higher. Both are correct for their methodology.
Market Context
10-Year Treasury — 6-Month Trend
The 10-year Treasury yield closed Friday at 4.99%, down meaningfully from its recent peak of 5.31% on October 5th and well off last week’s 5.12%. Thursday’s session saw the largest single-day drop in Treasuries in over a year — a 17-basis-point decline in one session — driven largely by weaker-than-expected economic data. Mortgage rates followed, with the PMMS dropping 8 bps this week. The Treasury has now pulled back roughly 32 basis points from its October peak, giving some breathing room to rate-sensitive buyers.
Mortgage-Treasury Spread
The spread between the 30-year fixed mortgage rate and the 10-year Treasury yield sits at approximately 2.33% — historically wide compared to the long-run average of around 1.7%. This means even if Treasury yields stay flat or drift lower, mortgage rates are likely to remain elevated until lenders and the secondary market normalize their risk premiums. A “double win” for buyers would require both lower Treasuries and spread compression.
Fed Policy & FOMC Outlook
The Fed meets Tuesday, October 28. Markets are pricing an 88.5% probability of a hold at the current rate (per CME FedWatch as of October 26). No cut is expected this week. The Fed has been clear: they’re watching inflation data closely before any move, and last month’s stronger-than-expected employment numbers pushed a November cut off the table entirely for most analysts. The next meaningful window for a rate decision is December.
The big picture: the Fed’s target rate is holding at its current level while 10-year Treasuries have rallied somewhat. Markets are starting to price in a “higher for longer” scenario extending into 2027 — meaning mortgage rates in the mid-to-upper 7s are the new normal for now, not a temporary spike.
Twin Cities Local Impact
| Metric | Current | YoY Change |
|---|---|---|
| Median Sales Price (Twin Cities) | ~$405,000 | +2.8% |
| Pending Sales | Below last year | −~20% (week of 10/16) |
| Active Inventory | Growing | +11.2% (September YoY) |
| Days on Market (National) | 61 days (September) | Up from 41 days in Sept 2021 |
| Cash Purchases (Twin Cities) | ~18% of sales | Elevated |
| Inventory Level | 7-year high | More choices for buyers |
Sources: MAAR (Minneapolis Area Realtors), MN Realtors, HomesMSP weekly update (10/16/26), Finance & Commerce (10/2026). Pending sales lag is from MAAR NorthstarMLS data.
Here’s what’s happening on the ground in the West Metro right now: buyers are pulling back, not disappearing. Pending sales running 20% below last year is significant — it means rate sensitivity is real. The buyers who are active tend to fall into two camps: those who have to move (job change, family, estate sale) and those with enough equity or cash that rate doesn’t dictate the decision. Cash purchases at 18% of the market tell that story clearly.
Inventory at a 7-year high is actually good news for buyers if they can make the math work. Sellers are more flexible on contingencies, closing credits, and even price than at any point in the last several years. A well-qualified buyer with a down payment has negotiating leverage they haven’t had since 2019.
For sellers: pricing matters more than it has in years. A home priced aggressively at $430K when the comp is $410K is sitting. Price it at $408K and you’re still getting multiple showings. The inventory rise isn’t from a flood of new listings — it’s from homes that are priced above what the rate-constrained buyer pool can absorb. There’s still a market for well-priced, well-prepared homes.
Bottom Line / Takeaway
Rates dropped this week — a 30-year fixed at 7.32% is the lowest the PMMS has reported since early September. That’s a meaningful move and it matters for affordability at the margins. The question is whether this is the start of a sustained pullback or a head-fake before yields climb again.
My read: this is a temporary Treasury rally, not a structural shift. The Fed isn’t cutting this week, and economic data hasn’t softened enough to force their hand by December. Buyers who’ve been waiting for 6% rates should stop waiting — those rates aren’t coming in the next 12 months based on current trajectory. If 7.32% moves you into a payment you can handle, now is a better window than last week, and likely better than next month if Treasuries drift back up.
For sellers in the West Metro: don’t price for a 2023 market. Price for 2026 buyers who are rate-stressed and have more choices. The good news is that prices haven’t crashed — the median is still up 2.8% year-over-year. But the market is settling into a slower pace, and overpricing is the fastest way to sit.
What to Watch This Week
| Date | Event | Why It Matters |
|---|---|---|
| Tue, Oct 28 | FOMC Meeting Decision | Expected hold. Any surprise language about future cuts (or hikes) will move bond markets immediately. |
| Wed, Oct 29 | Q3 GDP Advance Estimate | Strong growth = fewer rate cuts expected = upward pressure on Treasuries and mortgage rates. |
| Thu, Oct 30 | Core PCE Inflation (September) | The Fed’s preferred inflation gauge. If it comes in hot, expect Treasury yields to bounce back up. |
| Thu, Oct 30 | Initial Jobless Claims | Labor market resilience keeps the Fed on hold. A spike would be rate-positive for buyers. |
| Fri, Oct 31 | Employment Cost Index (Q3) | Wage inflation data — another Fed input for the December decision. |
Questions About Your Twin Cities Home?
Whether you’re buying, selling, or just trying to figure out if the math works at today’s rates — reach out. I work with buyers and sellers across the West Metro every day and can give you a straight read on what’s realistic in your situation.
Craig Kamman • Edina Realty | Wayzata, MN
📞 952-994-4451
Disclaimer: This post is for informational purposes only and does not constitute financial or mortgage advice. Mortgage rates change daily and your specific rate will depend on your credit profile, loan amount, property type, and lender. Talk to a licensed mortgage professional to understand your options. Craig Kamman is a licensed Realtor with Edina Realty, not a mortgage broker or financial advisor.