Mortgage rates ended a six-week streak of increases with a 4-basis-point reduction for the period ended Oct. 6, which Freddie Mac attributed to ongoing economic uncertainty.
The Freddie Mac Primary Mortgage Market Survey found the 30-year fixed rate mortgage averaged 6.66% for the past week, down from 6.7%
"Markets were extremely volatile last week, roiled by geopolitical events, economic data and concerns over the health of Credit Suisse, a large bank," said Paul Thomas, vice president at Zillow Home Loans, in a statement issued Wednesday night. "Mortgage rates reached 7% and yields on 10-year Treasurys were briefly above 4% before both rates declined later in the week."
On Sept. 27, the 10-year Treasury yield hit a high of 3.99%, based on Yahoo Finance data, although MarketWatch reported it briefly reached 4.01% overnight.
Zillow's data gave an average of 6.42% for the 30-year fixed rate on Oct. 6, down 7 bps from the 6.49% average for one week ago.
Investors are torn between the Federal Reserve's current restrictive rate policy rhetoric and a possible pivot, in which future hikes would be less severe because of slowing economic activity, Thomas said.
Thomas pointed to the Mortgage Bankers Association's
And after bottoming out at 3.56% on Tuesday, the 10-year yield has been on the rise again. As of 10 a.m. eastern time on Thursday, it was at 3.81%, up 5 bps from its previous close.
That indicates that the 30-year fixed rate is likely to rise again, at least in the early part of the next Freddie Mac survey period.
Thomas pointed out last week's data showing continued strength in the labor market and a rate of inflation that's still well above the Fed's target level.
"Investors will be focused on payroll data later this week to better understand the strength of the economy and potential Fed actions going forward," Thomas said. "Next week will see inflation data releases that could move rates significantly, depending on actual levels versus market expectations."
Meanwhile, the 15-year fixed rate averaged 5.9%, down from last week when it averaged 5.96%, the Freddie Mac survey found. A year ago at this time, it averaged 2.23%.
But even as the MBA reported the share of adjustable loan applications increased to an 11.8% share, interest rates for the product rose again, up 6 bps to 5.36%, according to Freddie Mac. This compared with 2.52% for the same week in 2021.
