For the first time since November of last year, information compiled by Freddie Mac shows that mortgage rates increased slightly. As of end of October 2019, the 30-year FRM – Commitment rate, increased by eight basis points to 3.69 percent from 3.61 percent in September. The cycle peak was 4.87 percent in November.
As expected, The Federal Reserve lowered its benchmark interest rate at the October Federal Open Market Committee meeting by a quarter percentage point, to a range of 1.50-1.75 percent for the third time in the past three months. With this move, the Fed has essentially reversed three of four rates hikes in 2018. Outlook expressed by FOMC members noted that the current stance of policy would remain appropriate so long as incoming information on the economy was consistent with the outlook. This is in line with NAHB forecast that this would be the last rate cut for 2019. Additionally, Chair Powell examined risks to the outlook, financial stability risks, inflation expectations, and the Fed’s review of its monetary policy framework.
At the end of October, the 10-year Treasury rate, was at 1.70 percent. It was at 1.67 percent at the end of September. Although slightly up compared to a few weeks ago, the lower rate 10-year Treasury rate has contributed to lower mortgage interest rates in the last few weeks compared to earlier this year. The average 30-Year Fixed market rate, according to Freddie Mac, was at 3.78 percent at the end of October compared to 3.64 percent at the end of September. At the beginning of 2019, the average 30-Year Fixed market rate was 4.51 percent.