Mortgage Rates Reach Lowest Average in Over a Year
In October, mortgage rates dropped to their lowest average in more than a year. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 6.25%, down 10 basis points from September and 17 basis points lower than a year ago. The 15-year fixed rate fell slightly by 1 basis point to 5.49%, marking an 11 basis point decrease compared to last year.
Key Financial Benchmarks
The 10-year Treasury yield, an important indicator for long-term borrowing costs, averaged 4.09% in October. This represented a 5-basis-point decrease from September’s levels. Early in the month, markets anticipated rate cuts from the Federal Open Market Committee (FOMC), which kept rates relatively stable after the FOMC announced a 25-basis-point reduction to the federal funds rate.
Impact on Housing Market Activity
Lower mortgage rates helped boost housing-related activity. According to the Mortgage Bankers Association, applications for mortgages, refinancing, and home purchases all rose. Existing home sales climbed to a seven-month high in September.
However, data on new home sales is currently unavailable due to the ongoing government shutdown. The housing sector continues to face challenges from a weakening job market and persistent inflation. Added uncertainty comes from an upcoming Supreme Court case on recent tariffs and the absence of some economic data, making the Federal Reserve’s December rate decision difficult to predict.
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Summary: October’s mortgage rates fell to their lowest levels in over a year, encouraging housing activity despite economic uncertainties from inflation, labor markets, and political factors.