The Freddie Mac Primary Mortgage Market Survey (PMMS) reported a second consecutive weekly decline, with the 30-year fixed mortgage rate dropping another eight basis points for the week ending October 29th. This recent pullback is primarily driven by easing 10-year U.S. Treasury yields, which retracted from their early-October highs as investors moved capital into safer government debt amid a technology stock selloff. While the Federal Reserve’s decision to hold its benchmark rate steady has offered some temporary stability, mortgage rates remain more than a full percentage point higher than last year due to stubborn inflation and broader economic pressures.
Mortgage applications increased 3.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending October 23rd. “Mortgage rates declined for the second week in a row, with the 30-year fixed rate decreasing to the lowest in three weeks. The decline in rates gave borrowers some relief, with applications rebounding slightly, particularly conventional applications,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “While purchase applications increased over the week, they were 18 percent behind last year’s pace as many homebuyers have put their purchase plans on hold. Similarly, refinance applications were down more than 60 percent from a year ago, as most borrowers have little to gain from refinancing.”
The Federal Reserve held steady on rates at the conclusion of its October meeting, maintaining its target range of 3.75% to 4%. Two members of the Federal Open Market Committee dissented from the decision: Governor Lisa Cook and Cleveland Fed President Beth Hammack were in favor of raising rates by a quarter percentage point. At the Fed’s press conference Warsh highlighted the strength of the economy. “Broadly, what I heard in the room the last couple of days is consistent with my own views, which is the economy is strong,” the central bank leader said. He also announced that the central bank will reduce the number of rate-setting meetings starting in 2027, noting that while eight meetings per year is “the right number”, one of them will focus exclusively on broad monetary policy strategy while the remainder will be policy-setting meetings.
U.S. consumer sentiment edged down to near a record low in October as rising prices because of the Middle East conflict soured households’ views of the economy on the doorstep of midterm congressional elections centering on affordability issues. The University of Michigan’s Surveys of Consumers released last Friday said its Consumer Sentiment Index dropped to 48.0 this month from a final reading of 48.1 in September. October’s reading marked the second lowest on record after the all-time low of 44.8 set in May, not long after the Iran war began. “Purchasing power continues to dominate consumer views of the economy,” said Joanne Hsu, the director of the Surveys of Consumers. “Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.”
