The Freddie Mac Primary Mortgage Market Survey (PMMS) for the week ending November 5th shows that rates dropped another six basis points last week. This marks three weeks in a row where rates have dropped, and they are down nearly 25 basis points over that period. This downward trajectory provides an improving environment for prospective homebuyers against a backdrop of strong economic growth. However, there are few signs that slightly lower rates are bringing buyers off the sidelines. “Prospective borrowers may be holding off decisions until rates and economic and political conditions settle,” MBA president and CEO Bob Broeksmit said in a statement.
Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 30th. “Mortgage rates drifted down to their lowest level since September 2026 last week in the wake of the Federal Reserve’s decision to hold on additional rate hikes at its October meeting,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “While the 30-year rate declined, activity is still quite slow, with purchase application volume down for the week and refinance volume effectively flat at a very low level. As we have highlighted in recent weeks, more borrowers are choosing ARMs in this environment to lower their initial payments, with the ARM share at its highest level since September 2025.”
The number of Americans filing new claims for unemployment benefits slipped to a 57-year low last week, pointing to labor market resilience. Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 189,000 for the week ended October 31, the Labor Department said. Low layoffs, thanks to strong domestic demand and profit growth, are anchoring the labor market. But some economists viewed the low level of jobless claims as a function of a smaller labor force amid an immigration crackdown. “Employers are holding on to the workers they have heading into the holidays, and the hiring they are announcing is largely short-term, seasonal work,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas. “Companies want flexibility to meet holiday demand without adding permanent headcount.”
US manufacturing activity picked up in October amid strong domestic demand, keeping inflation at the factory gate elevated. Despite the unexpected improvement reported by the Institute for Supply Management on Monday, sentiment among manufacturers remained overwhelmingly downbeat, with some complaining that “economic policies coming out of Washington continue to weigh on business conditions,” and others saying the situation was “making it impossible to make sound long-term decisions.” The ISM said its manufacturing Purchasing Managers’ Index increased to 55.5 last month from 54.5 in September. The PMI has stayed above the 50 threshold this year, indicating growth in manufacturing, a sector that accounts for about 9.4% of the economy.
