Take Two: The Weekly Wrap, Rates Fall as the 10-Year Drops Below 5%

Quick note before we dive in: earlier today’s email came through scrambled for a lot of you, and that’s on me. Here’s the Weekly Wrap the way it was meant to look, and thank you for your patience.

Happy Friday, and thank you for tuning in. It’s been an eventful, interesting week. You may have noticed the Tuesday call is no more, and that’s okay. We’re persevering, and this Friday newsletter is still a big thing for me. I’m glad you’re here. Friendly reminder: I’m always open for your clients on weekends, so send them my way anytime.

Rates finally gave us some good news. Freddie Mac’s 30-year average dipped to 7.32%, down from 7.40%, the 15-year came in at 6.68%, and the 10-year Treasury has slipped below 5%. Below I’ll walk through why rates are moving, what it means for your buyers, and a short video you can watch and share with your clients on whether payment apps like Venmo, Zelle, Cash App and Klarna can hurt a home loan. Spoiler alert: with proper planning, your clients will be fine.

Here’s the big picture. Bonds have been rallying, and when bonds rally, mortgage rates tend to come down. Quick reminder on how that works: when investors pile into bonds, bond prices go up and yields (the interest rate) go down. The two always move in opposite directions.

The 10-year Treasury is the rate the government pays to borrow money for 10 years. Mortgage rates tend to follow it. Lenders price loans off mortgage-backed securities (MBS), which are bundles of home loans that investors buy, and those trade right alongside the 10-year. When investors want MBS, their prices rise and the rates we can offer drop. This week MBS had some of their strongest days in a while, and Friday was another big move in the right direction for mortgages.

The AI trade is making investors nervous. This is the big one. Investors keep pulling money out of artificial intelligence (AI) stocks and moving it somewhere safer. The way I see it, the worry isn’t whether AI works, it’s whether the economics can keep up with the money being spent. Global AI investment is expected to top $1 trillion this year. Demand is still real, but the market is asking a fair question: who actually earns enough to pay for all of it?

Money is running to safety. When investors get that kind of doubt, they move into what feels safe, and that means Treasuries and mortgage bonds. That’s called a flight to quality. We keep seeing the same pattern: stocks stumble, bonds rally hard, and rates come down.

Investors buy when the 10-year tops 5%. Big investors like pension funds and buyers overseas see a 10-year above 5% as a bargain and step in. Add in fewer people expecting the Federal Reserve to keep hiking, and you have steady buying support for bonds.

Oil. Brent crude topped $112 a barrel. Normally that’s bad for rates, because higher gas and shipping costs feed inflation. Bonds have been ignoring it for now.

Sticky inflation and heavy borrowing. Inflation hasn’t cooled the way everyone wants, and the government is still borrowing a massive amount of money. More borrowing means more bonds for sale, and that keeps pressure on rates. Right now the AI worries are winning this tug-of-war, but that can flip fast.

For a while, 5% was the line on the 10-year. I’ve seen real resistance right around that level, because the reasons rates went up in the first place (inflation, borrowing, oil) haven’t gone away. Now the AI worries have pushed the 10-year below 5%. That’s good news, but it doesn’t mean the wall is gone for good. Those same pressures are still out there, and rates can bounce back quickly.

Freddie Mac’s weekly average has the 30-year fixed at 7.32% (down from 7.40% last week) and the 15-year fixed at 6.68% (down from 6.71% last week). Freddie Mac averages loan applications from the prior Thursday through Wednesday, so it doesn’t include the latest rally.

Every buyer under contract has one decision: lock or float. Locking means we hold their rate so it can’t go up before closing. Floating means waiting and hoping rates drop further. If rates jump while they float, your buyer pays more every month and the deal can get tight.

I see real resistance around 5%, and with the 10-year just below it, I prefer locking here and taking the win. If you have a buyer under contract who hasn’t locked, have them call me at (704) 458-0526 and we’ll go through it together.

Keep an eye on the stock market, especially the big tech and chip stocks. If they keep sliding, bonds will likely keep getting a lift. Watch oil prices too, and any new inflation or jobs news, since that’s what moves the Federal Reserve. I’ll keep you posted on Instagram at @thecltmortgageguy.

Several deals have crossed my desk recently with Zelle, Cash App, Klarna and other pay-later transfers, and a lot of them caused extra paperwork. People ask me all the time: do these kill deals? They don’t. But we do need paperwork.

Let me be clear: these apps will not kill your deals. We just have to get ahead of it as a lending team, and that comes down to proper planning.

The easiest way to avoid the paperwork is for it to not exist at all, or to handle it before the transaction starts. These app companies aren’t always great at producing statements or records, so tracing a transfer in the middle of a deal can be slow. That’s why I tell clients to move money into their bank account early so it has time to season, pay off the small pay-later plans before applying, and get any gift letter signed up front.

Plan ahead, and it’s no problem at all. If there’s no time to plan, that’s okay. My team and I are skilled at this, and we can handle it. Just because a client uses these apps doesn’t mean we can’t do the loan. We can, and we will.

Watch the video below (tap to play).

Text it, forward it, post it. Send it to any client thinking about buying, no permission needed. They can always reach me with questions at (704) 458-0526. It’s on Instagram too at @thecltmortgageguy, or watch it on YouTube.

Thanks for reading. Daily updates on Instagram at @thecltmortgageguy, short videos on YouTube, and intros or consults at linktr.ee/thecltmortgageguy.

Ian Smith · VP of Lending, Rate

(704) 458-0526 · [email protected] · linktr.ee/thecltmortgageguy · @thecltmortgageguy

Ian Smith, NMLS #1465241 · Equal Housing Lender / © 2026 Guaranteed Rate, Inc. D/B/A Rate · NMLS ID 2611 / Rates shown are illustrative, subject to change, and are not a commitment to lend. Educational only; not legal or tax advice. Loan guidelines vary by program and lender, and not all applicants will qualify.