Democrats win Congress and Treasury yields ease. What it could mean for mortgage rates, points and California's new down payment loans

Democrats have won both the House and the Senate in the US midterms, and borrowers got an encouraging first read from the bond market: Treasury yields eased overnight.

The result and the market's first move

Democrats retook the Senate late on Tuesday (AP, 3 November 2026). By Wednesday morning, NBC News projections had them at 54 Senate seats to 44, with Alaska and Mississippi uncalled, and at 258 House seats to 177 (NBC Chicago, 4 November 2026).

Our week-ahead post had prediction markets at 94% for the House and 69% for the Senate (Newsquawk, 30 October 2026). A sweep was also the outcome investors had linked to a bond rally.

The 10-year Treasury yield fell about 5 basis points to 4.90% in Tokyo trade (Reuters, 4 November 2026) and stood at 4.93% on Wednesday (Trading Economics, 4 November 2026). Treasury's own figures show 4.91% on Monday and 4.95% on Tuesday, so the move so far has reversed Tuesday's rise.

"Bonds are coming out as the clear winner," said Prashant Newnaha of TD Securities, as investors expect tax cuts and spending to be harder to pass (Reuters). Odds of a Fed rise in December eased to about 77% from 84% (Trading Economics).

Freddie Mac's 30-year average was 7.24% on 29 October, down from 7.32%. Jonathan Miller wrote before the vote that "lower 10-year yields would be the real path to lower mortgage rates" (The Real Deal, 3 November 2026).

If rates ease, do points still pay?

Points buy a lower rate today and take time to pay back, which matters if you might refinance sooner. The Mortgage Points Calculator takes up to three quotes and your expected hold, then shows the month the points pay for themselves, counting the balance as well as payments. Here's an illustrative USD 400,000 loan over 30 years, points paid in cash:

Keep the loan seven years and two points finish USD 9,638 ahead. Refinance at two years and the no-points quote leads. The free Refinance Calculator then shows whether a lower rate would cover the closing costs.

California's Proposition 37: what 17% does to PMI

California voters approved Proposition 37, with AP calling it and 61% voting yes in reported results (ABC10, 4 November 2026). It allows up to USD 25 billion of bonds for second loans of up to 17% of a qualifying new home's price, with at least 3% down. The measure doesn't set a rate (Legislative Analyst's Office).

In the PMI Estimator, on an illustrative USD 800,000 home at 7.24% with a 740 to 759 credit score, 3% down alone means a USD 776,000 loan and about USD 453 a month in PMI for 143 months. With a 17% second loan, the first mortgage is USD 640,000 at 80% LTV, and the calculator shows no PMI. The second loan carries its own payment, so the full comparison waits on published rates.

What's next this week

The Bank of England and Freddie Mac report on Thursday 5 November and the US jobs report follows on Friday 6 November. Stresst will cover each one, with the numbers worked through.

Run your own numbers in Stresst

The worked figures above came out of the Stresst calculators, and you can run your own in minutes.

The Mortgage Points Calculator and PMI Estimator are Premium, which adds PDF export on every calculator and starts with a 7-day free trial. Mortgage Payment, the Refinance Calculator and Total Purchase Costs are free.

Freddie Mac's next rate is due on Thursday, so it's a good moment to have your numbers ready. On iPhone, Stresst is in beta through Apple's TestFlight app.

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Know your numbers before you commit.

Sources

• Associated Press via PBS NewsHour, "Democrats take control of the Senate after winning key midterm races", 3 November 2026. https://www.pbs.org/newshour/politics/democrats-take-control-of-the-senate-after-winning-key-midterm-races
• NBC Chicago, "Election 2026: Which races still haven't been called, and which Senate, House seats flipped?", 4 November 2026. https://www.nbcchicago.com/news/local/election-2026-which-races-still-havent-been-called-and-what-states-flipped-seats-mississippi-alaska-election-results/4012174/
• US Department of the Treasury, "Daily Treasury Par Yield Curve Rates", 2 and 3 November 2026. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202611
• Reuters via Business Recorder, "US bonds rally as Democrat sweep seen stalling spending", 4 November 2026. https://www.brecorder.com/news/40447360/us-bonds-rally-as-democrat-sweep-seen-stalling-spending
• Trading Economics via TradingView, "Treasury Yields Fall as Democrats Sweep Congress", 4 November 2026. https://www.tradingview.com/news/te_news:598025:0-treasury-yields-fall-as-democrats-sweep-congress/
• Newsquawk, "Week In Focus 2nd-6th November 2026", 30 October 2026. https://www.newsquawk.com/headlines/week-in-focus-2nd-6th-november-2026-highlights-include-us-midterm-election-nfp-ism-pmis-rba-boe-and-ez-cpi-
• Freddie Mac, "Primary Mortgage Market Survey", 29 October 2026. https://www.freddiemac.com/pmms
• The Real Deal, "Housing Notes: What midterms could mean for the market", 3 November 2026. https://therealdeal.com/new-york/2026/11/03/housing-notes-what-midterms-could-mean-for-the-market/
• ABC10 via Yahoo News, "Proposition 37 passes with 61% of the vote, approving $25 billion homebuyer loan measure", 4 November 2026. https://www.yahoo.com/news/politics/articles/proposition-37-passes-61-vote-063147471.html
• California Legislative Analyst's Office, "Proposition 37", 3 November 2026 ballot. https://lao.ca.gov/ballot/2026/prop37-110326.pdf