The latest data released by Freddie Mac on November 2 indicates that mortgage rates have dropped for the first time in two months. This shift in rates is attributed to the uncertainty surrounding monetary policy and the geopolitical conflict in the Middle East.
30-Year Fixed-Rate Mortgage
The average rate for a 30-year fixed-rate mortgage now stands at 7.76%, a decrease of 3 basis points from the previous week. This rate marks an uptick from the 6.95% average recorded a year ago.
15-Year Mortgage Remains Stable
Meanwhile, the average rate for a 15-year mortgage remains unchanged from last week, standing at 7.03%. However, this rate is higher compared to the 6.29% average observed a year ago.
These figures are derived from Freddie Mac's weekly report, which analyzes thousands of mortgage applications received from lenders across the country.
Impact of Monetary Policy and Geopolitical Climate
Freddie Mac's chief economist, Sam Khater, conveyed the potential implications of current monetary policy and geopolitical uncertainty on the overall economic landscape. While the Federal Reserve has chosen not to increase interest rates, there is no definite decision regarding potential rate hikes before the year's end. This ambiguity may hinder progress in the housing market.
Expert Perspectives
Bob Broeksmit, President and CEO of the Mortgage Bankers Association, expressed satisfaction with the Federal Reserve's decision to maintain steady short-term rates. He further emphasized that any future rate hikes or selling of mortgage-backed securities by the Federal Reserve should only occur once the housing finance market has reached stability. Broeksmit believes that these actions would contribute to lower mortgage rates and enhance affordability for homebuyers as we move closer to 2024.
Overall, these developments in mortgage rates and monetary policy highlight a shifting landscape for potential homeowners. The intersection of economic factors and geopolitical events will continue to shape the housing market in the coming months.
