A Small Step Down: Temecula Mortgage Update, Oct 23, 2026

Felicia's Mortgage Update | Oct 23, 2026

A Small Step Down

Mortgage rates hit their lowest level in a month this week. It was a smaller move than last week's, but it's still progress, and it came from a place most people wouldn't expect: a rough week for big tech.

Here's what that actually means for you, what changed since last week, and what to watch when the Fed meets on Wednesday.

What Happened With Rates This Week

In last week's update, I said rates could keep improving if worries about tech stuck around. They did. On Thursday, several big tech companies shared earnings and outlooks that let investors down. Tech stocks dropped hard, and the average lender lowered rates that same day.

Friday gave a little of that back. Even so, rates ended the week slightly lower than last Friday and close to the best levels since late September. The 30-year fixed averaged 7.33% on Friday, so we're still in the 7s.

Why Tech Trouble Helps Mortgage Rates

This one sounds backwards, so let me break it down. When investors get nervous about lending money to companies tied to the AI boom, they move that money somewhere safer. That includes Treasuries and mortgage bonds. More demand for those bonds pushes the rates tied to them lower.

There's a bigger reason too. The AI boom has meant huge spending and borrowing. If that slows down, the economy could cool a bit, and that can ease inflation over time. Lower inflation is what mortgage rates really need.

One thing that's mattered less lately is oil. Oil prices went up on Thursday, and rates still fell. Energy costs still affect inflation, but they haven't been running the show.

What Changed Since Last Week

Last week was the best week since late March. This week was quieter, but it kept the trend going instead of reversing it. That matters. One good week can be a blip. Two in a row starts to look like real movement.

A few loan types, including VA, FHA, and the 15-year fixed, now average just under 7% nationally. That's a small line to cross, but it's one people notice.

The housing reports were softer. Fewer homes went under contract in September than expected, and by a wide margin. Builder confidence slipped, and new home starts came in below forecast too. The honest read is this: rates are moving the right way, but slowly, and the housing market still feels the weight of rates in the 7s.

What to Watch: The Fed Meets Wednesday

The Fed announces its next rate decision on Wednesday, October 28. Over the past two weeks, expectations have shifted toward the Fed holding steady. That's a real change from the recent worry about another hike.

What most people don't realize is that a hold won't automatically lower mortgage rates. Markets already expect it. What matters more is what the Fed says about the economy. If it leans toward worry about a slowdown, that could support the recent improvement. If it stays focused on stubborn inflation and more hikes, rates could push back up.

Thursday also brings new reports on economic growth and inflation. Those can move rates just as much as the Fed. And if tech's troubles fade while the economy stays strong, some of this support could go away. So I'm watching closely, not celebrating yet.

What This Means in Temecula Valley

If you're buying: When fewer buyers are writing offers, the ones who are ready often have more room to negotiate. In Temecula, Murrieta, and Menifee, that can mean asking for a seller credit toward closing costs or a rate buydown. If you're looking at new construction, ask each builder what incentives they're offering right now and how they can apply them to your rate.

If you're selling: Buyers are shopping by monthly payment. A smart price and the right credit offer can help your home stand out. A credit that helps a buyer buy down their rate can reach more buyers than a small price cut.

If you already own: Most homeowners have a rate lower than today's, so a full refinance doesn't make sense for many people. If you need cash for a project or to pay off higher-interest debt, a HELOC or home equity loan lets you keep your first mortgage as is.

If you're a military family: Whether you're commuting to Camp Pendleton, Miramar, or Coronado, VA loans are still one of the most flexible options, with no down payment for eligible buyers.

Why the Home and the Loan Should Work Together

When rates move a little at a time, the details decide your payment. That's where having both sides handled matters. I look at the price, the seller credit, the buydown, and the loan program together, so every piece works toward one payment you're comfortable with. Nobody's waiting on an agent to call a lender, or a lender to call an agent.

My advice this week is simple. Don't try to time the Fed. Get your numbers ready so you can move when the right home shows up. I post these updates every week on my mortgage update page, so you can see how things change over time.