Fed Decision Week: What GDP and Inflation Could Mean for Mortgage Rates

The Federal Reserve takes center stage this week, but Wednesday’s interest-rate decision is only part of the story. Thursday brings the first estimate of third-quarter economic growth, consumer spending and the Fed’s preferred inflation measurement—all at the same time.

Where Mortgage Rates Stand

Freddie Mac’s latest weekly survey put the average 30-year fixed mortgage rate at 7.32% as of October 22, down from 7.40% the previous week. The average 15-year rate declined from 6.71% to 6.68%.

These are national survey averages rather than individual rate quotes. The actual rate available to a borrower depends on credit, down payment, property type, loan program, points and several other factors.

The 10-year Treasury yield was near 4.99% Monday morning. Mortgage rates do not follow the 10-year Treasury perfectly, but the two generally move in the same direction. The modest decline in yields offers some relief, although borrowing costs remain elevated.

Why an Expected Fed Pause Can Still Move Mortgage Rates

The Federal Reserve raised its benchmark rate in September to a target range of 3.75%–4.00%. Markets now overwhelmingly expect policymakers to leave that range unchanged at this week’s meeting.

That does not mean mortgage rates will simply sit still Wednesday.

The Federal Reserve does not directly set fixed mortgage rates. Mortgage pricing responds to Treasury yields and mortgage-backed securities, which reflect investors’ expectations for future inflation, economic growth and Fed policy.

Since a Fed pause is already expected, markets will focus on the language surrounding the decision and Chair Kevin Warsh’s press conference. A patient message could help stabilize longer-term rates. A stronger warning about inflation or another possible increase in December could push Treasury yields and mortgage rates higher.

Monday, October 26: A Quiet Beginning

No major rate-sensitive economic reports are scheduled Monday.

What it means for mortgage rates: A quiet calendar does not guarantee quiet rates. Bond markets can still react to geopolitical developments, energy prices and investors adjusting positions before Wednesday’s Fed announcement.

Tuesday, October 27: Business Spending, Housing and Consumers

• September Durable Goods Orders at 8:30 a.m. Eastern
• August Case-Shiller Home Price Index at 9 a.m. Eastern
• September New Home Sales at 10 a.m. Eastern
• October Consumer Confidence at 10 a.m. Eastern
• Federal Reserve meeting begins

Current forecasts call for Durable Goods Orders to rise approximately 1.2% after being unchanged in August. New Home Sales are expected to ease from an annualized pace of 684,000 to approximately 655,000. Consumer Confidence is expected to edge down from 81.9 to around 81.2.

Those figures are forecasts and may change before the reports are released.

What it means for mortgage rates: Strong business spending, home sales and consumer confidence would suggest the economy remains resilient despite higher borrowing costs. That can place upward pressure on Treasury yields. Weaker results would be more supportive of the economic-cooling argument.

Wednesday, October 28: The Federal Reserve Decision

• Federal Reserve policy statement at 2 p.m. Eastern
• Fed Chair Kevin Warsh’s press conference at 2:30 p.m. Eastern

The Fed is widely expected to maintain its target rate at 3.75%–4.00%. Investors will therefore pay close attention to how policymakers describe inflation, employment and the possibility of another increase in December.

What it means for mortgage rates: A rate hold does not automatically mean mortgage rates will improve. If the Fed sounds more concerned about inflation or hints that another increase is likely, mortgage rates could move higher. A patient message would be more favorable for the bond market.

Thursday, October 29: GDP and the Fed’s Preferred Inflation Report

• Advance estimate of third-quarter GDP at 8:30 a.m. Eastern
• Personal Income and Consumer Spending at 8:30 a.m. Eastern
• PCE and Core PCE Inflation at 8:30 a.m. Eastern
• Initial Jobless Claims at 8:30 a.m. Eastern

Current consensus forecasts call for third-quarter economic growth near a 3.2% annualized pace, compared with 2.2% during the second quarter.

Consumer spending is expected to increase approximately 0.6%, while personal income is expected to rise approximately 0.3%.

Headline PCE inflation is expected to increase approximately 0.5% for the month and roughly 3.7% over the past year. Core PCE, which removes volatile food and energy prices, is expected to rise approximately 0.3% for the month and 3.1% annually.

What it means for mortgage rates: Strong growth combined with hotter inflation could increase expectations for another Fed rate increase and place upward pressure on mortgage rates. Softer inflation, slower consumer spending or weaker economic growth would generally be better received by the bond market.

Friday, October 30: The Cost of Employment

• Third-quarter Employment Cost Index at 8:30 a.m. Eastern
• Chicago Business Barometer at 9:45 a.m. Eastern

The Employment Cost Index is expected to rise approximately 0.8% for the quarter after increasing 0.9% previously.

What it means for mortgage rates: Wages and employee benefits make up a significant portion of business expenses. Stronger labor-cost growth can contribute to persistent inflation, while slower growth could give the Fed more room to remain patient.

Jared’s Take

This week is a good reminder that the Fed’s decision and mortgage rates are not the same thing.

A Fed pause is expected, but mortgage rates may still move quickly if the Fed’s message changes expectations for December. Thursday’s combination of GDP, consumer spending and PCE inflation could then either confirm that message or send the market in a different direction.

If you are buying, refinancing or deciding whether to lock a rate, the best strategy is not to gamble on one report. It is to understand your payment, compare the available options and decide how much market risk fits your situation.

Start Your Mortgage Review

Have questions about what this week’s news could mean for your plans? Reach out anytime. I’m happy to help you look at the numbers without the pressure or hype.

The Federal Reserve takes center stage this week, but Wednesday’s interest-rate decision is only part of the story. Thursday brings the first estimate of third-quarter economic growth, consumer spending and the Fed’s preferred inflation measurement—all at the same time.

Where Mortgage Rates Stand

Freddie Mac’s latest weekly survey put the average 30-year fixed mortgage rate at 7.32% as of October 22, down from 7.40% the previous week. The average 15-year rate declined from 6.71% to 6.68%.

These are national survey averages rather than individual rate quotes. The actual rate available to a borrower depends on credit, down payment, property type, loan program, points and several other factors.

The 10-year Treasury yield was near 4.99% Monday morning. Mortgage rates do not follow the 10-year Treasury perfectly, but the two generally move in the same direction. The modest decline in yields offers some relief, although borrowing costs remain elevated.

Why an Expected Fed Pause Can Still Move Mortgage Rates

The Federal Reserve raised its benchmark rate in September to a target range of 3.75%–4.00%. Markets now overwhelmingly expect policymakers to leave that range unchanged at this week’s meeting.

That does not mean mortgage rates will simply sit still Wednesday.

The Federal Reserve does not directly set fixed mortgage rates. Mortgage pricing responds to Treasury yields and mortgage-backed securities, which reflect investors’ expectations for future inflation, economic growth and Fed policy.

Since a Fed pause is already expected, markets will focus on the language surrounding the decision and Chair Kevin Warsh’s press conference. A patient message could help stabilize longer-term rates. A stronger warning about inflation or another possible increase in December could push Treasury yields and mortgage rates higher.

Monday, October 26: A Quiet Beginning

No major rate-sensitive economic reports are scheduled Monday.

What it means for mortgage rates: A quiet calendar does not guarantee quiet rates. Bond markets can still react to geopolitical developments, energy prices and investors adjusting positions before Wednesday’s Fed announcement.

Tuesday, October 27: Business Spending, Housing and Consumers

• September Durable Goods Orders at 8:30 a.m. Eastern
• August Case-Shiller Home Price Index at 9 a.m. Eastern
• September New Home Sales at 10 a.m. Eastern
• October Consumer Confidence at 10 a.m. Eastern
• Federal Reserve meeting begins

Current forecasts call for Durable Goods Orders to rise approximately 1.2% after being unchanged in August. New Home Sales are expected to ease from an annualized pace of 684,000 to approximately 655,000. Consumer Confidence is expected to edge down from 81.9 to around 81.2.

Those figures are forecasts and may change before the reports are released.

What it means for mortgage rates: Strong business spending, home sales and consumer confidence would suggest the economy remains resilient despite higher borrowing costs. That can place upward pressure on Treasury yields. Weaker results would be more supportive of the economic-cooling argument.

Wednesday, October 28: The Federal Reserve Decision

• Federal Reserve policy statement at 2 p.m. Eastern
• Fed Chair Kevin Warsh’s press conference at 2:30 p.m. Eastern

The Fed is widely expected to maintain its target rate at 3.75%–4.00%. Investors will therefore pay close attention to how policymakers describe inflation, employment and the possibility of another increase in December.

What it means for mortgage rates: A rate hold does not automatically mean mortgage rates will improve. If the Fed sounds more concerned about inflation or hints that another increase is likely, mortgage rates could move higher. A patient message would be more favorable for the bond market.

Thursday, October 29: GDP and the Fed’s Preferred Inflation Report

• Advance estimate of third-quarter GDP at 8:30 a.m. Eastern
• Personal Income and Consumer Spending at 8:30 a.m. Eastern
• PCE and Core PCE Inflation at 8:30 a.m. Eastern
• Initial Jobless Claims at 8:30 a.m. Eastern

Current consensus forecasts call for third-quarter economic growth near a 3.2% annualized pace, compared with 2.2% during the second quarter.

Consumer spending is expected to increase approximately 0.6%, while personal income is expected to rise approximately 0.3%.

Headline PCE inflation is expected to increase approximately 0.5% for the month and roughly 3.7% over the past year. Core PCE, which removes volatile food and energy prices, is expected to rise approximately 0.3% for the month and 3.1% annually.

What it means for mortgage rates: Strong growth combined with hotter inflation could increase expectations for another Fed rate increase and place upward pressure on mortgage rates. Softer inflation, slower consumer spending or weaker economic growth would generally be better received by the bond market.

Friday, October 30: The Cost of Employment

• Third-quarter Employment Cost Index at 8:30 a.m. Eastern
• Chicago Business Barometer at 9:45 a.m. Eastern

The Employment Cost Index is expected to rise approximately 0.8% for the quarter after increasing 0.9% previously.

What it means for mortgage rates: Wages and employee benefits make up a significant portion of business expenses. Stronger labor-cost growth can contribute to persistent inflation, while slower growth could give the Fed more room to remain patient.

Jared’s Take

This week is a good reminder that the Fed’s decision and mortgage rates are not the same thing.

A Fed pause is expected, but mortgage rates may still move quickly if the Fed’s message changes expectations for December. Thursday’s combination of GDP, consumer spending and PCE inflation could then either confirm that message or send the market in a different direction.

If you are buying, refinancing or deciding whether to lock a rate, the best strategy is not to gamble on one report. It is to understand your payment, compare the available options and decide how much market risk fits your situation.

Start Your Mortgage Review

Have questions about what this week’s news could mean for your plans? Reach out anytime. I’m happy to help you look at the numbers without the pressure or hype.

• Freddie Mac Primary Mortgage Market Survey — 30-year and 15-year national mortgage-rate averages for October 22. Freddie Mac
• Federal Reserve meeting calendar — October 27–28 meeting dates, announcement and press-conference schedule. Meeting calendars and information
• BEA release schedule — October 29 GDP, personal income and PCE releases. U.S. Bureau of Economic Analysis (BEA)
• BLS Employment Cost Index schedule — October 30 release date and time. bls.gov
• U.S. Census Bureau economic indicators — Durable Goods Orders and New Home Sales schedules. census.gov
• MarketWatch economic calendar — current consensus forecasts and prior readings. MarketWatch
• Federal Reserve selected Treasury yields — Treasury-yield context.

What Credit Score Do You Need to Buy a Home?

“My credit probably isn’t good enough.”

That assumption can keep someone from starting a homebuying conversation for months—or years.

Your credit matters. But there isn’t one score that determines everyone’s mortgage options.

Different loan programs have different rules. Lenders can add their own requirements. And your income, monthly debts, savings, and credit history also help determine what may be available.

Before counting yourself out, let’s look at the full picture.

Program rules and lender requirements aren’t always the same

A mortgage program may permit something that a particular lender doesn’t offer.

Those additional lender requirements are often called “overlays.” They can include higher credit score requirements or restrictions on certain credit situations.

That’s why a minimum score you see online may reflect one lender’s policy rather than a rule that applies everywhere.

Here’s how the major programs differ.

FHA: credit score and down payment work together

FHA’s baseline guidelines generally allow:

• 580 or higher: down payments as low as 3.5%.

• 500–579: a minimum 10% down payment.

Those figures don’t guarantee approval or mean every FHA lender offers financing at those scores.

The lender still reviews your income, debts, credit history, assets, and property. Recent late payments or other credit issues can matter even when your score meets the stated minimum.

VA: no VA-set minimum credit score

VA does not establish a minimum credit score for its home loan program.

Individual lenders, however, can set their own credit requirements.

Eligible veterans, service members, and certain surviving spouses still need to meet the applicable eligibility and underwriting requirements. Having no VA-set score minimum does not mean credit history is ignored.

If you’ve heard that every VA borrower needs a 620, that isn’t a universal VA rule.

USDA: 640 isn’t a universal program minimum

USDA’s guaranteed loan program does not establish a universal minimum credit score.

A lender may use a score requirement such as 640, but that number alone doesn’t tell you whether every USDA option is available or unavailable.

Credit history, repayment ability, underwriting results, and lender requirements all matter. Household income limits and property eligibility also apply.

A lower score needs an individual review—not an automatic promise of approval or an automatic dismissal.

Conventional: the underwriting method matters

You’ll still see 620 described as the minimum conventional mortgage score. That doesn’t capture every current scenario.

Fannie Mae’s Desktop Underwriter, its automated underwriting system, no longer applies a minimum credit score floor. It evaluates the overall application and credit risk.

That doesn’t mean credit scores are irrelevant or that any score will qualify. Lenders may maintain their own minimums, and manually underwritten loans and other conventional programs have different requirements.

The useful question is: “Which programs and lenders fit my complete application?”

Why your app score may be different

The score shown by your credit card company or credit monitoring app may differ from the score used during a mortgage review.

Different scoring models, credit bureaus, and reporting dates can produce different numbers.

Use those tools to monitor trends and watch for problems. But don’t treat one app score as a mortgage approval—or a denial.

What else does a lender review?

Your score is one piece of a larger review that may include:

• Your payment history and any recent late payments.

• Monthly debt payments compared with qualifying income.

• Employment and income documentation.

• Savings, down payment funds, and reserves.

• Collections, charge-offs, bankruptcies, or foreclosures.

• The property and the loan program’s requirements.

Two buyers with similar scores can have different financing options because the rest of their applications look different.

What should you do before applying?

Keep payments current, review your credit reports for errors, and avoid taking on unnecessary new debt.

Before closing accounts, opening new credit, or using a large portion of your savings to pay off old accounts, talk through the plan with your lender. The best next step depends on what’s actually affecting your application.

You don’t need to guess your way through it.

Jared’s Take

A credit score is information we use to make a plan. It isn’t a judgment about you.

Sometimes the review shows a path to buying now. Sometimes it shows that paying down a balance, correcting an error, or allowing more time would put you in a better position.

Either way, you leave with more useful information than “I probably can’t.”

If you’re thinking about buying in Charleston, North Charleston, Summerville, or elsewhere along the South Carolina coast, let’s review your situation and figure out a practical next step.

You don’t need perfect credit to start a conversation.

Jared W. Jackson
Rainbow Row Real Estate | South Carolina Lender
Mortgage Loan Originator, NMLS 2763373
Ascend Financial Group, Company NMLS 1629704

Program guidelines do not guarantee lender availability or approval. All loans are subject to credit, income, asset, property, and underwriting approval. This is not a commitment to lend.

Do You Really Need 20% Down to Buy a Home?

If you’ve been putting off buying a home because you haven’t saved a 20% down payment, let’s talk.

Twenty percent can be a great option. But it isn’t the minimum required for every mortgage.

Depending on your qualifications, the property, and the loan program, you may have options with a much smaller down payment. Some eligible buyers can purchase without a down payment at all.

The first step is finding out which options actually fit your situation.

Where does the 20% number come from?

On a conventional mortgage, putting 20% down generally allows you to avoid private mortgage insurance, commonly called PMI.

That’s a benefit worth considering. But avoiding PMI and qualifying to buy a home are two different things.

A larger down payment also means borrowing less. A smaller down payment can leave more savings available for moving, repairs, and emergencies.

The right choice depends on both your monthly budget and the money you’ll have left after closing.

What are the common down payment options?

These are starting points, not approval guarantees. Your circumstances may require a different down payment.

Conventional: you may have options below 20%

Certain conventional programs allow qualified buyers to put as little as 3% down.

These programs have specific requirements. Depending on the option, those can include income limits, first-time buyer requirements, or homebuyer education.

PMI generally applies when putting less than 20% down. That adds a cost, but it’s worth comparing the full payment and cash needed before ruling out the option.

FHA: as little as 3.5% down

FHA financing offers down payments as low as 3.5% for qualified borrowers.

Credit history and lender requirements matter, and not everyone qualifies for that minimum. FHA also has its own mortgage insurance costs.

A smaller down payment is one part of the comparison. We should also look at the interest rate, insurance, closing expenses, and total monthly payment.

VA: a benefit worth exploring

Eligible veterans, service members, and certain surviving spouses may qualify for a VA purchase loan without a down payment.

VA loans don’t require monthly mortgage insurance. A VA funding fee may apply unless the borrower qualifies for an exemption.

Entitlement and appraisal results matter, too. For example, an appraisal gap or limited remaining entitlement can mean a buyer needs additional cash.

If you have military eligibility, it’s worth reviewing your benefit before assuming another loan is your best option.

USDA: check the address before assuming

USDA guaranteed loans offer no down payment financing for eligible borrowers purchasing eligible primary residences.

Household income limits apply, and the property must fall within an eligible area. Don’t assume you need to buy a farm or move hours away—check the actual address.

USDA guaranteed loans also have upfront and annual guarantee fees, which belong in the cost comparison.

What does that mean in dollars?

For a hypothetical $350,000 purchase:

Eligible VA or USDA buyers may have a $0 down payment requirement.

These figures show the down payment only. They do not include closing costs, prepaid expenses, or any required reserves. They are illustrations, not loan offers.

No down payment doesn’t mean no money needed

This is an important distinction.

Even with a no down payment loan, you may still need money for closing expenses, inspections, deposits, insurance, and other items.

Negotiated seller contributions may help cover eligible closing costs. Assistance programs may also be worth exploring, depending on your qualifications and availability.

Those options need to be reviewed before writing an offer so your contract and financing work together.

Jared’s Take

Don’t let an assumed $70,000 savings requirement make the decision for you.

And don’t let a low down payment convince you to buy before your budget is ready.

Let’s look at your income, credit, savings, debts, and a monthly payment you’re comfortable with. Then we can compare what buying now would look like against continuing to save.

Whether you’re looking in Charleston, North Charleston, Summerville, or elsewhere along the South Carolina coast, you deserve a plan built around your actual numbers.

You don’t need 20% saved to start the conversation.

Jared W. Jackson
Rainbow Row Real Estate | South Carolina Lender
Mortgage Loan Originator, NMLS 2763373
Ascend Financial Group, Company NMLS 1629704

Program availability and requirements vary. All loans are subject to credit, income, asset, property, and underwriting approval. This is not a commitment to lend.

Can the Seller Help Pay Your Closing Costs?

You’ve been saving for a down payment. You’ve looked at homes online. You might even have a monthly payment in mind.

Then someone mentions closing costs.

Yep. The down payment is only part of the picture.

But here’s something worth knowing before you write an offer: the seller may be able to help cover some of those expenses.

That’s called a seller contribution or seller credit, and when it’s structured correctly, it can reduce the amount of cash you need to bring to closing.

What can a seller contribution cover?

Depending on your loan program, a negotiated seller credit may help pay eligible expenses such as:

• Loan origination and other lender fees.

• Closing attorney and title charges.

• Appraisal and recording fees.

• Prepaid insurance, taxes, and initial escrow deposits.

• Discount points or an approved interest rate buydown.

The seller agrees to apply part of their proceeds toward eligible buyer expenses. The credit is documented in the contract and accounted for at closing.

It isn’t an automatic benefit, and the seller doesn’t have to agree. It’s one of the terms you can negotiate.

Your down payment is still a separate piece

Seller credits toward closing costs generally cannot satisfy your required down payment.

They can, however, help you preserve the savings you would otherwise spend on eligible closing expenses.

That distinction matters. Having enough for the down payment doesn’t always mean you have enough for the entire purchase—and getting help with closing costs doesn’t automatically eliminate every upfront expense.

How much can the seller contribute?

The answer depends on the mortgage program, how the property will be used, and other loan details.

Conventional loans

For a primary residence or second home under standard Fannie Mae guidelines, financing contribution limits are:

Applicable combined loan-to-value requirements also matter. Percentages are based on the lower of the purchase price or appraised value.

A quick graphic doesn’t capture every conventional scenario. Have your lender confirm the limit for your particular loan.

FHA loans

Interested parties may generally contribute up to 6% of the sales price toward eligible closing expenses, prepaid items, and other permitted costs.

USDA guaranteed loans

Seller and other interested-party contributions are generally limited to 6% of the sales price, subject to eligible uses.

VA loans

VA’s 4% rule is not an overall cap on seller-paid closing costs.

Certain concessions—such as paying the buyer’s VA funding fee or qualifying debt payoff—are limited to 4% of the property’s VA-established reasonable value. Ordinary buyer closing costs are treated separately.

That distinction can make a meaningful difference when structuring a veteran’s offer.

Jumbo loans

Jumbo contribution limits depend on the lender and specific program. Confirm the guidelines before negotiating a credit.

For every program, a maximum percentage is a ceiling—not a promise that you can use that entire amount.

What could this look like?

Here’s a simplified example:

You negotiate a $7,000 seller credit and have $9,000 in eligible closing expenses. If your loan permits the credit, that could leave you responsible for $2,000 of those expenses.

Your required down payment would remain separate.

This example assumes the credit fits the program’s rules and all listed expenses are eligible. Your actual cash to close would also reflect deposits, other credits, and the final closing figures.

Would a price reduction be better?

Sometimes. It depends on what you need.

A lower purchase price can reduce the amount you borrow. A seller credit can reduce the cash you need for eligible closing expenses.

If keeping savings available for moving, repairs, or an emergency fund is a priority, a credit may be worth comparing with a price reduction. We can look at both options before you decide what to request.

The home still needs to support the agreed price through the appraisal and underwriting process.

A few things to remember

The seller has to agree. Contributions are negotiated alongside the price and other contract terms.

You need eligible expenses to use the credit. An unused balance generally isn’t money you can pocket.

Some expenses may come due before closing. Plan for inspections, deposits, and other upfront costs even when you’re requesting seller assistance.

Talk to your lender before submitting the offer. A credit that sounds helpful can create problems if it exceeds your program’s limits or the expenses you can actually use it for.

Jared’s Take

Before deciding you need another year of saving, find out what your actual numbers look like.

That doesn’t mean every seller will pay your closing costs or every buyer can purchase with very little cash. It means your plan should be based on your financing options, estimated expenses, and the terms we may be able to negotiate.

Whether you’re buying in Charleston, North Charleston, Summerville, or elsewhere along the South Carolina coast, let’s start with a conversation about what works for you.

You don’t need to have every answer before reaching out. That’s what I’m here for.

Jared W. Jackson
Rainbow Row Real Estate | South Carolina Lender
Mortgage Loan Originator, NMLS 2763373
Ascend Financial Group, Company NMLS 1629704

Loan programs and contribution limits are subject to applicable guidelines and lender requirements. All loans are subject to credit, income, asset, property, and underwriting approval. This is not a commitment to lend.