U.S Mortgage Rates Hold Steady Ahead of Next Week’s Presidential Election

Mortgage rates avoided a fall to yet another all-time low in the week ending 29th October. Following a 1 basis point fall in the week prior, the 30-year fixed rate rose by 1 basis point to 2.81%.

Compared to this time last year, 30-year fixed rates were down by 97 basis points.

30-year fixed rates were also down by 213 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

Key stats included durable goods and core durable goods orders for September and October consumer confidence figures.

It was a mixed bag on the data front.

While both durable goods and core durable goods orders rose in September, consumer confidence softened in October.

The stats had a muted impact on the broader market, however, with a surge in new COVID-19 cases weighing on risk appetite.

With a number of EU member states reintroducing lockdown measures, the fear is that the U.S may have to follow.

On the geopolitical risk front, market jitters ahead of the U.S Presidential Election next week also weighed on riskier assets.

Freddie Mac Rates

The weekly average rates for new mortgages as of 29th October were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 1 basis points to 2.81% in the week. Rates were down from 3.75% from a year ago. The average fee rose from 0.6 points to 0.7 points.

  • 15-year fixed rates fell by 1 basis points to 2.32% in the week. Rates were down from 3.19% compared with a year ago. The average fee held steady at 0.6 points.

  • 5-year fixed rates increased by 1 basis points to 2.88% in the week. Rates were down by 55 points from last year’s 3.43%. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • The record-low mortgage rate environment is providing tangible support to the economy at a critical time.

  • Strong purchase demand is helping to lift the construction, manufacturing, and transportation industries.

  • Homeowners, looking to sell or make home improvements, are also supporting consumption

  • On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payments. This means that homeowners can spend, save, or pay down debt more so than in the past.

Mortgage Bankers’ Association Rates

For the week ending 23rd October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from 3.12% to 3.14%. Points remained unchanged 0.35 (incl. origination fee) for 80% LTV loans.

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.02% to 3.00%. Points fell from 0.36 to 0.35 (incl. origination fee) for 80% LTV loans.

  • Average 30-year rates for jumbo loan balances decreased from 3.33% to 3.28%. Points increased from 0.30 to 0.31 (incl. origination fee) for 80% LTV loans.