Key Highlights
- As the economic outlook seems uncertain, mortgage rates decreased slightly to 7% this week.
- According to data released by Freddie Mac, the average of a 30-year fixed-rate mortgage is 6.66% as of 6th October.
- Mortgage applications dropped significantly in the recent week as buyers pulled back amid higher rates and also due to the hurricane-induced closures in Florida.
Mortgage rates took a short break from their march towards 7% this week, as the economic outlook looks uncertain. According to data released by Freddie Mac, the average of a 30-year fixed-rate mortgage is 6.66% as of 6th October.
That is down 4 basis points from the previous week, and one basis point is equal to one-hundredth of a percentage point, or 1% of 1%. The 30-year mortgage rate was at 6.7% last week.
Though rates have decreased as per Freddie Mac, albeit ever so slightly, overall mortgage rates are still high relative to where they were a year ago. The 30-year was averaging at 2.99% last year.
Sam Khater, the chief economist at Freddie Mac, said in a statement that rates remain very high compared to just one year ago, meaning housing continues to be expensive for potential home buyers. The average rate on the 15-year mortgage also dropped slightly to 5.9% this october.
The ARM or adjustable-rate mortgage averaged 5.36%, up compared to the prior week. The Mortgage Bankers Association said that interest in ARMs is rising, with the share of ARMs as a percentage of all mortgage applications for purchases of a home increasing to 12%. That is the highest level it has reached since 2008.
Overall, mortgage applications dropped significantly in the recent week as buyers pulled back amid higher rates and also due to the hurricane-induced closures in Florida. The yield on the 10-year Treasury note increased to 3.8% in morning trading.
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