Mortgage Rates Ease for a Second Straight Week
Mortgage rates eased for a second straight week, with the 30 year fixed average slipping to 7.24 percent, The Mortgage Reports said on October 30. Rates tend to follow the 10 year Treasury yield, and the modest drop affects refinancing and buying, though not every kind of home loan.
Mortgage rates eased again this week, a small bit of relief for anyone buying or refinancing a home. The Mortgage Reports, a housing finance news site, said on Friday, October 30, that Freddie Mac's weekly survey showed the average rate on a 30 year fixed mortgage slipped to 7.24 percent, down from 7.32 percent the week before.
The average rate on a 15 year fixed mortgage also fell, to 6.60 percent from 6.68 percent. The Mortgage Reports said it was the second week in a row that rates moved lower, leaving them at their lowest point this month. Even with the drop, rates remain higher than they were a year ago.
The site explained that mortgage rates do not move in step with the Federal Reserve. The Fed left its main interest rate unchanged at its meeting on Wednesday, October 28. Mortgage rates tend to follow the yield on the 10 year Treasury bond instead, and that yield has been falling, which helped pull home loan rates down.
For readers 50 and older, mortgage rates touch more than first time buyers. They affect the cost of refinancing a current loan or buying a smaller home in retirement. Keep in mind that this weekly survey covers fixed rate mortgages. A home equity line of credit usually carries a variable rate tied to a different benchmark, often the prime rate, so a dip in fixed mortgage rates does not mean the cost of that kind of borrowing fell too.
A single week does not set a lasting trend, and rates have moved up and down all year. People thinking about a home loan can compare offers from more than one lender, since rates and fees can vary quite a bit, and can ask about all the costs rather than just the headline rate. Those living on a fixed income may want to weigh any new monthly payment carefully against their budget before they borrow. A trusted lender or a nonprofit housing counselor approved by the government can help walk through the numbers at no cost or low cost. As with any big money decision, it is fine to take your time and ask questions before you sign.
Go Deeper
What happened to mortgage rates?
The Mortgage Reports said Freddie Mac's weekly survey showed the 30 year fixed average fell to 7.24 percent from 7.32 percent.
Is this a trend?
It was the second straight week of declines and the lowest this month, but rates are still higher than a year ago.
Did the Fed cause the drop?
Not directly. Mortgage rates tend to follow the 10 year Treasury yield, which has been falling.
Does this lower a home equity line of credit too?
Not necessarily. A home equity line of credit usually has a variable rate tied to a different benchmark, often the prime rate, so this fixed rate survey does not show that cost fell.
What should I do before borrowing?
Compare offers from more than one lender, ask about all the costs, and weigh any new payment against your budget.
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