Mortgage Rates Edge Down for Third Week

Mortgage rates came down for the third-straight week, but whether the recent trend is a sign of things to come remains unknown, although economists point toward any progress in a resolution in the Middle East as a step in the right direction. 

The latest Freddie Mac Primary Mortgage Market Survey® released Thursday shows the average 30-year fixed-rate mortgage rate at 7.18%, down six basis points from 7.24% last week. The 30-year FRM is still up year-over-year from 6.22% last year. The 15-year FRM averaged 6.57% down from 6.60% last week. A year ago at this time, the 15-year FRM averaged 5.50%. 

At presstime, the average rate was 7.17% Thursday afternoon, according to Mortgage News Daily, about one percentage point above year-ago levels.

Realtor.com Senior Economist Hannah Jones said Tuesday’s Job Openings and Labor Turnover Survey came in stronger than expected, with layoffs down slightly and a significant gain in job openings, which points to a potentially strong jobs report tomorrow. 

“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,” she cautioned. 

Regarding Tuesday’s midterm elections which gave Democrats a majority in both the House and Senate, Jones said it is not yet clear whether the shift will be felt in the housing market. 

“Many newly elected representatives have voiced discontent with the ongoing conflict in the Middle East, which has contributed to rising inflation, so any progress toward resolution could mean lower inflation and softer mortgage rates ahead,” she said.

Although rates have eased over the last few weeks, they remain above 7%, keeping many buyers on the sidelines. Realtor.com’s October housing market report showed another month of a slowing housing market, with both buyers and sellers pulling back. Pending sales fell 10.5% year over year; new-home sales fell 0.6% on a monthly basis in September, which Realtor.com® Senior Economist Joel Berner characterized as “muted” for this year.

“Still, sellers aren’t delisting in droves, which suggests they are disengaging rather than acting out of distress,” Jones added. “With 43% of active listings having had a price reduction, buyers who can afford to participate are in a relatively strong position, facing less competition and more price cuts.”