Congratulations to Donald Trump and Scott Bessent on a — checks notes — 13bps drop in mortgage rates from the local highs.

I’m gonna go out on a limb and say that’s not enough to win back any midterm voters who might’ve been aggrieved when the fallout from the Iran war dashed their 2026 home-buying hopes.

And look: That’s not a straw man, is it? I mean, there were a lot of Americans hoping to buy their first house this year, just like there are every year. And a meaningful share of those people were surely priced out as rates rose from 6.10% when Ali Khamenei was last among the living to highs north of 7.60% earlier this month.

Thanks to a nascent rally in Treasurys (which may or may not have already run its course), mortgage rates have fallen for two straight weeks, but… well, here’s the chart:

The MBA’s midweek update put the average 30-year fixed at 7.37% (Mortgage Daily News had it at 7.33% on Tuesday). The implied respite’s meaningless in the context of the run-up since March.

“The decline gave borrowers some relief, with applications rebounding slightly, particularly conventional,” MBA VP Joel Kan remarked, before quickly noting that rates “are still more than a percentage point higher than the same week last year and most homeowners still have rates much lower than prevailing market rates.”

That latter point means the resale market’s likely to remain — and as some of you’ve noticed, I’m pivoting to a more freewheeling cadence of late — all kinds of fucked for the foreseeable future.

Why? Because with prices where they are, buyers need concessions. But sellers who don’t plan on paying cash for their next home will be disinclined to grant them. They were already vexed about the prospect of swapping, say, a five-handle rate for a seven-handle. When you throw in a buyer demand for the economic equivalent of — whatever — 10% off ask, a lot of sellers will just stay home. Literally.

Consider that Redfin’s latest update on prices showed the median ask fell YoY for the first time since March in the four weeks to October 11. But pending home sales for the period ending October 18 (i.e., the very next rolling four-week period) dropped 2% to the lowest since at least 2021. As Dana Anderson pointed out, “pending sales declined in all 50 of the most populous US metro areas.” (Emphasis mine.)

This is an intractable stalemate. The only thing that’s gonna break the logjam is a demonstrable (i.e., “big league” or, preferably, “BIGLY”) decline in financing costs. It’s just that simple. In the same linked update, Anderson noted that the typical monthly payment for a homebuyer midway through this month was $2,796, “the second-highest on record.”

Wednesday’s MBA update showed ARM’s share ballooning to 11.3% over the week, the highest in a year “as more borrowers [tried] to lower their monthly payments.”

Of course, that’s not a riskless proposition. In fact, it’s not a “proposition” at all. It’s a de facto bet. In this case, I reckon it’s a fairly safe one — if I were inclined to bet on the medium-term trajectory of mortgage rates, I’d lean towards them being lower — but ARMs are a gamble. By definition.

Just ask The Wall Street Journal, which ran a feature story this week carrying the title, “Home Buyers Who Enjoyed Cheap Adjustable Mortgages Are Now Getting a Nasty Shock.”