The Mortgage That Prices Your Buyer Rose 64 Basis Points in Four Weeks. The Ten-Year Rose 26.

By Steve Waller · October 14, 2026

The two rates came apart

Freddie Mac's 30-year fixed-rate average has printed higher for seven consecutive weeks. The run goes 6.76% on September 10, then 6.95%, 7.03%, 7.28% on October 1, and 7.40% on October 8. A year ago the same survey read 6.30%. The 15-year average is 6.73%.

The 10-year Treasury did not keep up. It closed at 4.95% on September 10 and 5.21% on Tuesday, October 13. In between it printed 5.31% on October 5, which is the high of 2026, and then came back down.

So over four weeks the mortgage moved 64 basis points and the benchmark behind it moved 26. The spread between the two went from 181 basis points to 219.

That extra 38 basis points is the part worth understanding. It is not the Treasury market and it is not the inflation print. It is what the mortgage market is charging to originate, hold and sell the loan on top of the benchmark. Your exit buyer pays it. You do not get a vote on it, and it does not show up in any headline about the ten-year easing.

This morning's inflation print

The September Consumer Price Index was scheduled for release at 8:30 Eastern this morning. As this went out, the latest figure on the record was still August: all items +0.4% for the month and +3.4% over twelve months, core +0.3% and +2.4%, shelter +3.0% year over year, and energy +16.3% with gasoline +27.4%.

Energy at those levels is what has been pushing the headline around, and it is why the ten-year has had a hard month. If September came in hotter than August, the benchmark has no reason to ease and next Thursday's mortgage survey has fuel. If it came in cooler, the thing to watch is whether the mortgage follows it down or holds the wider spread. The arithmetic below does not depend on which way it went.

What 64 basis points did to the buyer who takes your renovated house

HAR's most recent monthly update puts the Houston median single-family sale at $330,000. An 80% loan on that is $264,000. Principal and interest over 30 years:

• At 6.76%, the September 10 survey: $1,714 a month.
• At 7.40%, the October 8 survey: $1,828 a month.

That is $114 a month, or $1,366 a year, on the same house.

The number that actually matters is the other way round. Hold the payment at $1,714, which is what your buyer qualified for four weeks ago, and ask what it buys now. At 7.40% that payment carries $247,560 instead of $264,000. Your buyer lost $16,440 of loan, which at 80% is $20,550 of house.

Nothing about your property changed. The buyer pool for it repriced underneath you.

Against a $12,210 margin

ATTOM's Q2 2026 flipping report puts the typical Houston-area flip at a 3.7% gross margin. On a $330,000 resale that is $12,210, before rehab overruns, before carry and before the roughly 7% it costs to sell. Nationally the typical flip ran a 21.5% margin and $60,526 of gross profit over 161 days, with flips at 6.2% of all sales. The other large Texas metros were no better than Houston: Dallas 1.8%, Austin 2.8%, San Antonio minus 0.3%.

So the last four weeks of rate movement took $20,550 of reachable price out of your buyer, against a typical local gross margin of $12,210. The rate move is worth 1.68 times the entire typical Houston flip margin. That is the whole case for underwriting the exit before the rehab scope.

The refinance exit lost less, and that is the actionable part

The rental takeout is priced off the ten-year, not off the Freddie survey. The ten-year moved 26 basis points over the same four weeks the mortgage moved 64. Hold a property's income flat and watch what each move does to the loan it supports.

Take $1,800 a month of net operating income and a 1.20 debt service coverage requirement. That allows a $1,500 monthly payment. A 30-year loan at that payment sizes to:

• $226,604 at 6.95%.
• $220,762 26 basis points higher, which is what the ten-year did: $5,842 less.
• $212,649 64 basis points higher, which is what the retail mortgage did: $13,955 less.

Put the two exits side by side in the same unit. Over four weeks, the resale exit lost $16,440 of loan the buyer can carry. The refinance exit lost about $5,842 of loan the rent can carry. The resale exit deteriorated 2.8 times harder.

ACP does not publish rates and nothing here is a quote. Use the rate on your own term sheet. The useful thing to carry in your head is the sensitivity: on a loan near a quarter of a million dollars, every 10 basis points is roughly $17 a month, and every full point is roughly $170 a month.

What Houston looks like underneath this

From HAR's latest monthly update: 38,947 active single-family listings, up 0.5% year over year. 5.3 months of inventory. Days on market 54, against 52 a year earlier. Single-family sales 7,100, down 11.5%. Pending sales down 3.5%. Median price $330,000, down about 1.5%, with the average at $426,760, up 1.2%.

Listings flat, sales down eleven and a half percent. The extra supply on the market is not coming from new sellers arriving. It is coming from buyers leaving, and the four weeks described above are a direct explanation of why they are leaving.

The supply side is not going to rescue anyone this quarter

Census's most recent New Residential Construction release, covering August, has building permits at a 1,394,000 annual rate, down 2.7% for the month but up 3.5% on the year. Starts at 1,275,000, down 2.6% and down 1.2% on the year, though single-family starts rose 7.6% to 918,000. Completions at 1,128,000, down 11.9% for the month and down 27.1% on the year, with single-family completions down 22.9%.

Completions down 27% in a year is the number with teeth in it. Finished new houses are your competition on the resale shelf, and there are fewer of them coming. That is the one line in this brief working in a flipper's favour. It does not offset 64 basis points.

What to change this week

• Re-run the exit, not the entry. If your ARV was set on a buyer qualified before mid-September, it is $20,000 stale on a $330,000 house. Reprice the ARV before you reprice the repairs.
• Underwrite the hold as the primary exit on anything you are buying now. The refinance exit lost roughly a third of what the resale exit lost. If a property only works as a sale, it is carrying the full 64 basis points of the move.
• Price the carry at the long end of your timeline, not the short one. The typical flip nationally took 161 days. A 54-day listing clock is not the holding period.
• Treat the spread as a standing cost, not a blip. At 219 basis points over the ten-year, a fall in the benchmark does not automatically reach your buyer. Wait for the Freddie print, not the Treasury print.

The week ahead

• Thursday, October 15 - Freddie Mac's weekly survey. An eighth consecutive increase would be the longest run since 2022; the ten-year at 5.21% on Tuesday argues against it.
• Tuesday, October 20 - Census New Residential Construction for September. Watch completions, which have been falling at a 27% annual rate.
• HAR's September monthly update, still to come. August was the last month on the record as of this writing. Days on market and the sales count are the two lines to read first.
• The ten-year every day. It printed 5.31% on October 5 and 5.21% on October 13. That ten-basis-point range is the difference between a rental takeout that sizes and one that does not.

Sources

• U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates, October and September 2026
• Freddie Mac, Primary Mortgage Market Survey, 8 October 2026
• Federal Reserve Bank of St. Louis (FRED), 30-Year Fixed Rate Mortgage Average, MORTGAGE30US
• U.S. Bureau of Labor Statistics, Consumer Price Index Summary, August 2026
• ATTOM, Q2 2026 U.S. Home Flipping Report
• Houston Association of Realtors, Monthly Housing Update
• U.S. Census Bureau and HUD, New Residential Construction, 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.

All briefs