The Ten-Year Printed 5.31% Monday, the High of 2026. Finished New Homes Are Down 27.1%.

By Steve Waller · October 7, 2026

The number

The 10-year Treasury closed at 5.31% on Monday, October 5. That is the highest daily close of 2026. It settled back to 5.27% on Tuesday. The first trading day of January printed 4.19%, so the long end of the curve has moved roughly 110 basis points in nine months.

The mortgage market has already repriced to it. Freddie Mac's 30-year average reached 7.28% on October 1, up from 7.03% the week before and 6.34% a year earlier. The 15-year average is 6.60%. The Mortgage Bankers Association's own survey put the average contract rate on a conforming 30-year at 7.3%, up from 7.12% the week before, with points rising to 0.75.

What it costs the buyer who takes your house

Houston's median single-family sale was $330,000 in August. Put an 80% loan on that and you are financing $264,000.

At 7.28% over 30 years, principal and interest on $264,000 is $1,806 a month. At the 6.34% that was available a year ago, the same loan cost $1,641. That is $165 a month more for the identical house.

Now run it the other way, which is the direction that matters to your exit. Hold the payment constant at last year's $1,641 and ask what it finances today. The answer is $239,835, which is $24,165 less mortgage. On an 80% loan that is roughly $30,200 less house.

So if your after-repair value came off comparable sales from last spring, it is carrying about thirty thousand dollars of error on a median Houston house, and the error is not in your favor. Every 25 basis points from here is another $45 a month on that loan, and every $100 a month of payment is worth about $14,600 of mortgage at today's rate.

Demand has already answered

You can see the response in the application data for the week ending September 25. The Mortgage Bankers Association's composite index fell 6% week over week. Purchase applications fell 4% on a seasonally adjusted basis and were 14% below the same week a year ago. Refinance applications fell 9% and were 56% below a year ago, with refinances down to 38.3% of all applications.

A 14% year-over-year shortfall in purchase applications is the pool of retail buyers your flip is priced against. A 56% shortfall in refinance volume is the other exit, and it is the one shrinking faster.

The number pointing the other way

The Census Bureau's August new residential construction release carries one figure that works in your favor, and it is the largest move in the report. Privately-owned housing completions ran at a seasonally adjusted annual rate of 1,128,000, which is 11.9% below July and 27.1% below August 2025. Single-family completions were 816,000, down 10.4% from July.

Read the error bands in that release, because they decide which numbers you are allowed to believe. The completions declines are stated at ±9.7% month over month and ±8.9% year over year, so both clear the Bureau's own confidence interval. The starts figures do not: total starts were 2.6% below July at ±12.0%, and 1.2% below a year ago at ±10.8%. Permits, which are a count rather than a sample, came in at 1,394,000, down 2.7% from July but 3.5% above a year ago, with single-family authorizations at 878,000.

So the pipeline is still being permitted while deliveries have fallen hard. Finished new houses are what actually competes with your renovated resale, and there are materially fewer of them arriving in the window you would be selling into this winter.

Houston's own supply is not the problem

Houston ended August with 38,947 active single-family listings, up 0.5% year over year, and 5.3 months of inventory. Average days on market moved to 54 from 52. Closings fell 11.5% to about 7,100, with 7,939 transactions pending. The average price held at $426,760, up 1.2%, while the median slipped $5,000 to $330,000.

That combination is the whole story in one line. Supply is close to flat and demand is down double digits. The extra months of inventory on the board came from the buyer side, not from a wave of new listings, which means the pressure sits on the seller you are negotiating with rather than on you.

What to do with it this week

Three things follow from the arithmetic above, and none of them involve waiting for rates.

• Re-cut your exit assumption at today's payment, not last year's price. Take the monthly payment your target buyer can carry and work backward to a sale price at 7.28%. If that number is below the ARV in your spreadsheet, the spread you think you have does not exist.
• Move the difference into the offer. Purchase price is the only input in a renovation deal you control outright, and it is the one that stays with you for the whole hold. A seller sitting at 54 days on a market with 5.3 months of supply has more reason to move on price than you have to accept the list.
• If the plan is a rental takeout, re-run it at a quoted rate. Long-term rental financing is priced off the 10-year, and the 10-year is 110 basis points higher than it was in January. A debt-service coverage figure modeled in the spring is not the figure you will be approved against now. Get the current quote and put it in the model before you are under contract.

What we are watching

• Freddie Mac's next weekly survey on Thursday, which will show whether 7.28% held or kept climbing.
• The Houston Association of Realtors' September report, due in the next week, for whether days on market pushed past 54 and whether the median held $330,000.
• The Census Bureau's September construction release in mid-October, for whether the collapse in completions is a one-month print or a trend.
• The next weekly application survey, for whether purchase demand stabilized above the 14% year-over-year deficit.

Sources

• U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates, October 2026
• Freddie Mac, Primary Mortgage Market Survey, 1 October 2026
• Mortgage Bankers Association, Weekly Applications Survey, week ending 25 September 2026
• U.S. Census Bureau and HUD, New Residential Construction, August 2026
• Houston Association of Realtors, Monthly Housing Update, August 2026

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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