A welcome sight for future homeowners was the significant slowing of mortgage rates this week, according to the Freddie Mac weekly survey.
- The 30-year fixed was up to 6.94% for the week ending October 20th, this is up two basis points for the week and is up 385 basis points from one year ago.
- The 15-year fixed saw a bigger 14 basis point jump to 6.23% and the 5/1 ARM was down 10 bips to 5.71%.
Analysis. Sam Khater, Freddie Mac’s Chief Economist, “Mortgage rates slowed their upward trajectory this week…The 30-year fixed-rate mortgage continues to remain just shy of seven percent and is adversely impacting the housing market in the form of declining demand.”
Kate Marino at Axios Markets had a great piece this morning explaining why mortgage rates are soaring.
“Large buyers of mortgage bonds — i.e. the Fed and the big banks — have dropped out of the game. The lower demand has pressured the value (or price) of mortgage bonds, sending yields soaring…When mortgage bonds are available in the secondary markets at discounted prices — i.e. higher yields — then investors are apt to buy those, instead of buying in the primary market where new deals are bundled…To entice buyers to scoop up these new deals, rates need to go up — a lot.” (Read More)
