US Mortgage Rates Fall for a Second Straight Week

what happened

Rates on 30-year fixed US mortgages declined for a second consecutive week. According to Freddie Mac, the average fell to 7.24% from 7.32% a week earlier and 7.4% the week before, the Wall Street Journal reports. The rate is still more than a full percentage point above a year ago.

The 15-year fixed rate eased to 6.60% from 6.68%. A year earlier, 30-year rates stood at 6.17% and 15-year rates at 5.41%, according to Seeking Alpha. Freddie Mac's chief economist Sam Khater said the drop modestly improved purchasing power for prospective buyers. The Mortgage Bankers Association's CEO Bob Broeksmit noted that applications rose for the first time in two months.

Earlier, expectations that the Federal Reserve would raise rates to fight inflation linked to the war in Iran drove many buyers out of the market. Yields on 10-year Treasuries pulled back from multidecade highs reached earlier this month, helped by a selloff in tech stocks that pushed investors into government debt. The Fed held rates steady on Wednesday, as widely expected, but most investors still anticipate a hike in December.

why it matters

Mortgage rates track the 10-year Treasury yield, so their direction depends on inflation and Fed policy. If growth stays resilient and inflation persists, the Fed could keep hiking into next year, which would limit any further easing in mortgage costs.

market impact

US Treasuries and mortgage market: lower bond yields ease borrowing costs for homebuyers

• ▲US Treasuries pressure up — demand for government debt rose after the tech stock selloff

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