Portland Mortgage Market Update — October 2, 2026

What a week! This week had everything going against mortgage rates. They started at a one year high and the 10 yr Treasury hit levels not seen since COVID. The market was all but guaranteeing another Fed rate hike at the end of October. But what is that? A cooler than expected inflation report? A jobs report that came in WAY lower than expected? This morning opened with a rally in bonds as a result; rates appear to have turned the corner and started a trend towards improving, and the odds of an October rate hike have all but disappeared.

Let's start with today's Jobs report. The BLS September report came in showing non-farm payrolls rose just 29K, well short of the 90K estimate. Beyond that, the August report was revised downward to 133K from 162K (and you'll recall it was that August report that really kicked off the trend of spiking interest rates), and July's report was revised further downward to now showing a loss in jobs that month. This is in line with what seemingly happens every time the BLS releases a "shocking" report-- the numbers always get revised downward.

Inflation you say? The PCE report was forecasted to come in at 3.7%, but rolled in at 3.4%(Headline) and 3.0% (Core), both .3% below the market consensus. Now, there are some naysayers that are claiming the only reason these numbers came in lower is because they changed the methodology of calculating them, which is true. They primarily adjusted how the report relies on gains in Portfolio Management, which traditionally had been skewed since it is a cost associated with gains in investments. If the stock market is on a tear (which it has been) and portfolio managers charge a percentage of that increase in earnings, that isn't necessarily a fixed cost to the everyday consumer. So, the PCE now accounts or lowers the weight that line item carries.

Let's talk about these improving rates. Well, from the time I started typing this out to now, Mortgage Backed Securities have gained about 30 basis points, lost it all, regained it, and currently lost it again. It seems traders are vacillating between throwing their money into the stock market vs bonds right now, which is causing some whipsaws, but it doesn't look like rates are actively trying to get higher than where they opened, which was about in line with the beginning of this week. The bigger picture provided by these two reports is that rates should start a trend towards improvement. The risk is there isn't much data being released next week and rates will be determined by news and geopolitical activities (i.e. the war in Iran and oil prices).

That's what I got for this week! I don't think I have ever sent this request, but if you have read this far I hope it means you find some value in my updates, and if you find value in them I would hope you are comfortable referring me to a friend, a client or a co-worker who needs home financing or just a second look at what they are currently being offered. I am around all weekend so please feel free to call/text/email if there is anything I can do to help!

Mark RuhlLoan Officer, Mortgage Express NMLS 105591 (503)317-7620 mruhl@mtgxps.com www.markruhl.com 15115 SW Sequoia Parkway, Suite 100, Portland, OR 97224 teamruhl@mtgxps.comMortgage Express, LLC | NMLS Company ID: 40831 | www.mtgxps.com Licensed in OR, ID, WA, UT, CO, CA, and AZ. Licensed in CA by the Department of Financial Protection and Innovation (DFPI) under the Residential Mortgage Act and in AZ under Mortgage Bankers License BK-1027601. This is not a commitment to lend. Loan products and amounts vary by location and are subject to credit and property approval per agency and investor guidelines. Rates, terms, and programs are subject to change without notice. Some loan products may be offered through lender partners of Mortgage Express, LLC.Additional restrictions may apply. For inquiries, contact customerservice@mtgxps.com or visit 15115 SW Sequoia Parkway, Suite 100, Portland, OR 97224. | NMLS Consumer Access Confidential: If you are not the intended recipient, please delete this email and notify the sender. Please scan attachments for viruses. Mortgage Express, LLC is not responsible for any damage caused by email-transmitted malware.