Mortgage rates decreased another two basis points last week, according to the Freddie Mac Primary Mortgage Market Survey released on October 30th. This is the fourth week in a row that mortgage rates have continued to trend down and are now 55 basis points lower than this same time last year. The last few months have brought lower rates, and homebuyers are increasingly entering the market.
Mortgage applications increased 7.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 24th. “Mortgage rates decreased for the fourth consecutive week, with the 30-year fixed rate down to its lowest level since September 2024. This recent decline in rates spurred the second consecutive week of increased refinance activity, driven mainly by conventional refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The ARM share of applications, which had been trending higher, dipped below 10 percent last week, as lower rates prompted more borrowers to choose fixed-rate loans. Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements.
The Federal Reserve on Wednesday approved its second straight interest rate cut, though Chair Jerome Powell rattled markets when he threw doubt on whether another reduction is coming in December. By a 10-2 vote, the central bank’s Federal Open Market Committee lowered its benchmark overnight borrowing rate to a range of 3.75%-4%. In addition to the rate move, the Fed announced that it would be ending the reduction of its asset purchases, a process known as quantitative tightening, on December 1st. The post-meeting statement did not provide any direction on what the committee’s plans are for December. Powell, however, cautioned against assuming that a rate cut is a sure thing at the next meeting. “In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” Powell said during his post-meeting news conference. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”
Pending sales of existing US homes stalled in September, suggesting anxiety about the job market kept potential buyers sidelined despite a welcome easing in mortgage rates. The index of contract signings held at 74.8 after climbing a revised 4.2% a month earlier to the highest level since March, according to National Association of Realtors data released Wednesday. “A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market,” NAR Chief Economist Lawrence Yun said in a statement. Nonetheless, “mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity.” Even with middling results for last month, housing economists see the resale market slowly thawing after several years of lackluster demand. Mortgage rates have shown signs of stabilizing, and home prices are cooling.
