30-year conventional rates

Bill’s rate journal

The week in review

1. October 1630-year conventional 6.89%

   “Mortgage rates are a little higher this morning. Wholesale prices jumped more than expected last month, and when business costs rise that fast, they often get passed on to shoppers — that can keep inflation elevated and put pressure on mortgage rates. Firings remain very low, which also leans against lower rates. The Fed chair did not signal a hike at the October 28 meeting, and markets read that as a likely hold — that can take some pressure off. Oil is near $97 on more U.S.–Iran tension, and higher oil can lift everyday prices. Longer-term Treasury rates are around 5.13%. If the pause holds, mortgage rates can settle. If inflation stays this hot, that can put pressure back on.”

2. October 1430-year conventional 6.89%

   “Mortgage rates are higher today. This morning’s inflation report was hotter than expected and more widespread than recent readings. Year-over-year inflation rose to 3.7%. Gasoline jumped 9% in the month. A hotter inflation report makes another Fed hike more likely, and that can put more pressure on mortgage rates. Odds of a hike on October 28 jumped from under 20% to over 50%. Longer-term Treasury rates broke back above 5.29%. If they stay above that level, mortgage rates can move higher still. If they fall back under it, rates can settle. The 30-year is about 7.5%, and purchase applications have fallen for six straight weeks.”

3. October 1330-year conventional 6.89%

   “Mortgage rates are lower today. Longer-term Treasury rates fell back under 5.29% and are near 5.19%, as higher yields finally attracted buyers and energy prices pulled back. That can take pressure off mortgage rates. Tomorrow’s inflation report is the big one. A hot reading can put pressure back on mortgage rates. A cooler one can give them more room to improve. Fed officials still say another hike is likely, just not in a rush, and a later hike can keep mortgage rates elevated. Existing-home sales rose a little in September but remain near the weakest pace of the year — higher mortgage rates are slowing buyers. Consumer confidence is near a record low, and slower wage growth can eventually take more pressure off rates.”

4. October 930-year conventional 6.89%

   “Mortgage rates are about steady this morning. The bigger news is that longer-term Treasury rates got back under 5.29% yesterday, a level last seen in 2007. If that ceiling holds, mortgage rates can settle. If it breaks, the next stop is a 2002 high near 5.43%, and that would push mortgage rates higher. The president said the U.S. will not strike Iran before the midterms, and that helped. Strong demand at this week’s Treasury sales also helped — higher yields are finally attracting buyers. Markets are closed Monday. Wednesday’s inflation report is next: a hot reading can put pressure back on mortgage rates; a cooler one can give them a break.”