Mortgage rates climbed for the first time in seven weeks as bond yields continue to climb after the Fed decision two weeks ago, according to Freddie Mac’s latest survey.
- The 30-year fixed-rate mortgage (FRM) averaged 6.12% for the week ending October 3rd, a four-basis-point increase from the previous week. This marks the first rise in rates since mid-August.
- Similarly, the 15-year FRM saw an uptick, averaging 5.25%, up nine basis points from the prior week.
Bonds Yields Rise: The recent rise comes after a longer-than-expected period of falling rates, which had defied the upward trend of the 10-year Treasury yield. The yield on the 10-year Treasury, a key indicator for mortgage rates, has been increasing for over two weeks after hitting a 15-month low of 3.62% on August 16th. As of midday October 3rd, the yield has risen to over 3.82%.
What They’re Saying: Despite this recent increase, Freddie Mac’s Chief Economist Sam Khater remains optimistic about the housing market’s outlook. “Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise,” Khater said. “As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.”
Bottom line: Although mortgage rates have ticked up, broader trends show a more favorable environment for homebuyers, with improving affordability, slowing home price growth, and rising incomes, setting the stage for a healthier housing market heading into the fall season.
