What happened to mortgage rates this week
“Mortgage rates increased by 12 basis points over the week to 6.44% as the 10-year Treasury yield continued to hover near highs not seen since July. This puts mortgage rates at their highest since August. While we expect the long-run trend in mortgage rates to be downward, recent weeks have brought volatility. On the one hand, the 10-year Treasury surged last week in the face of a hot jobs report as well as a CPI report that came in slightly hotter than expected. This helped boost mortgage rates last week and somewhat this week. On the other hand, the 10-year Treasury fell on Wednesday on Federal Reserve Bank of San Francisco President Mary Daly’s comments that there’s room for the central bank to lower rates. This is likely to put slight downward pressure on mortgage rates at the end of this week and into next.
What it means for the housing market
This seesaw pattern could be with us until the last week of the month, when we get a double whammy of new price and employment data with the PCE release on Oct. 31 followed by the October jobs report on Nov. 31. If inflation and employment growth come in hotter than expected, we’ll likely get increases in mortgage rates during election week, and vice versa.
What does this all mean for homebuyers? It means they should make buying decisions on finding the home that best meets their current and future needs, not on the short-term volatility in mortgage rates. The financial benefits to homeownership come from staying put in a home, and homeowners are typically more likely to stay in a home if it suits both their geographic (location) and size (beds, baths, square footage) needs. Since October is the best time to buy in many markets, we encourage buyers to forget about mortgage rates and focus on taking advantage of a slower-moving market, increasing price cuts, and inventory levels not seen in years.