The average long-term mortgage rates in the U.S. have decreased for the third consecutive week, providing some relief to prospective homebuyers facing increased costs. According to reports from The Economic Times, the average 30-year fixed-rate mortgage declined to 7.18% from 7.24% in the previous week, as reported by mortgage buyer Freddie Mac. This marks the third straight week of declining rates, offering some respite to the housing market. The current rate represents a new one-month low and remains elevated compared to historical levels, with the average 30-year rate one year ago at 6.22%, according to The Economic Times. As per Freddie Mac's Primary Mortgage Market Survey (PMMS), the 30-year fixed-rate mortgage averaged 7.18% for the week ending November 5, representing the third straight weekly decline from an October peak that had reached the highest level in nearly three years.
The 15-year fixed-rate mortgages also saw a decline, dropping to 6.57% from 6.60% in the previous week, as reported by Freddie Mac. These shorter-term mortgages are often sought by borrowers refinancing home loans, and the rate decline provides additional options for homeowners looking to adjust their financing terms. A year ago, the 15-year rate was significantly higher at 5.50%, indicating substantial improvement in borrowing costs. The declining rates help alleviate some of the financial burden on prospective homebuyers facing higher home prices and increased borrowing costs. As per Freddie Mac, the 15-year fixed-rate mortgage, favored by homeowners seeking to refinance, fell to 6.57% from 6.60% the prior week.
The November 5 midterm elections, which handed Democrats control of both the House and the Senate, helped ease sentiment in the bond market and contributed to the third consecutive week of declining mortgage rates. According to Freddie Mac, "Mortgage rates continued their downward trajectory this week, improving the environment for prospective homebuyers against a backdrop of strong economic growth," said Sam Khater, chief economist at Freddie Mac in McLean, Virginia. The 10-year Treasury yield, which mortgage rates broadly track, dropped to 4.84% at midday Thursday, marking its lowest level since early September, well off the 5.30%+ readings logged in early October. That runup had sent US mortgage rates inching toward 7% through August and September before cresting in early October. The post-election bond market calm and easing Treasury yields helped pull borrowing costs to their lowest level in a month. As per Realtor.com® senior economist Hannah Jones, the downward drift of mortgage rates is partly the byproduct of markets digesting the seismic shift of power in Washington, DC, and looking ahead to Friday's October jobs report.
The downward drift of mortgage rates is partly influenced by the October jobs report, which came in stronger than expected, with job openings showing significant gains and layoffs declining slightly. According to Realtor.com® senior economist Hannah Jones, "While solid hiring supports housing demand over time, a stronger-than-expected report could also lift bond yields and slow the pace of rate declines in the near term." A robust labor market expansion will also provide the Federal Reserve with cover to raise its benchmark rate further, a move the central bank is expected to make next month. For homebuyers, the current mortgage environment offers some relief after months of upward pressure, though future rate movements will depend on economic data releases and Federal Reserve policy decisions.
