Mortgage rates were down week-over-week for the first time in seven weeks, according to the Feddie Mac weekly survey.
- The 30-year fixed fell 4 basis points to a very Halloween number of 6.66% for the week ending October 6th. Rates are now 367 basis points higher than one year ago.
- The 15-year fixed was down 6 basis points to 5.90% for the week ending October 6th, this is 373 basis points higher than one year ago.
Effect On Home Prices. Redfin reports that the monthly mortgage payment on the median-asking-price home climbed to a record $2,528 at the current 6.66% mortgage rate, up 49% from $1,701 a year earlier, when mortgage rates were 2.99%. This is even up significantly from the recent low of $2,209 during the four weeks ending August 14.
Analysis. Taylor Marr, Redfin’s Deputy Chief Economist, said elevated rates are definitely putting downward pressure on home prices. “Sellers are pulling back in this market, but buyers are pulling back even more. Home prices are holding steady for now. It will take a few months before the prices of closed sales start to reflect this shock to the market. However, there is evidence of sizable price declines in parts of the market that aren’t accounted for by MLS data, such as home builders offloading homes in bulk at a 20% discount.”
BOTTOM LINE: All eyes on tomorrow’s jobs report to see if a softening labor market could provide some relief for bond markets.
