Mortgage rates move higher for fifth week: What to know

For the fifth consecutive week, mortgage rates have moved even higher. According to the latest data out from Freddie Mac, the average 30-year fixed mortgage rate now sits at 6.72%.

Yahoo Finance housing reporter Claire Boston joins Brad Smith on Wealth to speak more the latest mortgage print and what recent inflation data is indicating about the Federal Reserve's next interest rate decision.

To watch more expert insights and analysis on the latest market action, check out more Wealth here.

This post was written by Luke Carberry Mogan.

Video Transcript

Mortgage rates for the week ending October 31st are out our very own.

Claire Boston joins me on set with those numbers.

Hey, Claire, what do we know?

Hey, so we have another bad week of news for anyone kind of thinking about buying a house here.

Mortgage rates are up again.

Uh The 30 year fixed average is 6.72%.

The 15 year average is 5.99%.

This is the fifth consecutive week of gains.

And what we're seeing is this is really about bond market volatility.

Um A lot of traders are kind of getting just ahead of the election trying to figure out what either candidate's policies would mean for the deficit.

Uh They don't like what they see.

And so as a result, treasury yields have been higher mortgage rates really track treasury yields closely.

So we've been seeing that rise, what we've also seen is mortgage rates kind of front run with the fed expectations and the fed move expectations were as they initiated their cutting cycle.

So from what we're seeing right now, it seems like there's even more of the movement higher that's already priced in what the fed had done and now anticipating.

Ok, we might see the fed be on the sideline just for a little bit or not make cuts as aggressively as anticipated as well.

Is that kind of playing into the figures right now too?

Right.

That's correct.

We've gotten a lot of economic data in the past couple of weeks and generally it's showing a pretty strong economy.

Traders are pretty much in agreement in November.

The fed is going to cut 25 basis points, but, you know, kind of looking at a little bit further.

It's a little bit unclear how much more the fed will need to cut.

And so you're seeing that in mortgage rates too, just if cuts go slower rates may be higher for longer and the extent to which that would actually show up in the psyche of potential home buyers out there.

We actually had the opportunity to speak on catalysts with Thomas Simons who is the Jeffrey senior US economist and he was discussing everything from the state of the housing market to what leverage the fed can pull as well.

I want to play this quick clip for our viewers in response to the 1st 50 basis point rate cut that there was a decent drop in mortgage rates.

Uh mortgage apps and pending home sales were up a little bit during the month.

They've come back a little bit as expectations for rate cuts have been tempered.

Uh and I, I'm not sure that the fed is, uh you know, necessarily gonna be any better equipped to sort of understand how the housing market is going to evolve in a lower rate environment.

And so the reason that we wanted to show that as well is because it kind of varies with what we heard from Freddie Mac as well, saying several potential inflection points happening over the next week.

The jobs report 2024 election federal reserve interest rate decision, they expect mortgage rates to remain volatile.

How volatile and for how long do you think that could be the case?

Yeah, I mean, that's the million dollar question.

A lot of people are saying, you know, probably toward the end of the year, we may move gradually lower.

You know, mortgage rates on a daily basis are showing as high as seven right now.

That is bad news for potential home buyers.

And a lot of people I talk to say that once you get above seven, that's kind of when everything sort of freezes.

And so, you know, potentially we may head back more to like 6.5.

I've seen calls for 6.3 before your ends all 30 year fixed rate, mortgage 6.72% 15 year at 599 clear.

Boston breaking down the numbers for us here.

Thanks so much, Claire.

Thank you.

Absolutely.