Mortgage Rates – Home Sales – CPI – Rate Cuts

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This article was authored by:  Claire Boston

Mortgage rates dropped to their lowest level in more than a year. The average 30-year mortgage rate was 6.19%, down from 6.27% a week earlier. Average 15-year mortgage rates were 5.44%, down from 5.52%. The 10-year Treasury yield, which mortgage rates closely track, dropped below 4%. Mortgage rates have been falling since August, and there are signs that those drops are now bringing buyers off the sidelines. Existing home sales rose 1.5% in September from a month earlier. Mortgage rates are also moving lower as markets price in a likely rate cut from the Federal Reserve on October 29th. September inflation data came in cooler than expected. The headline Consumer Price Index rose 3% on an annual basis, the highest level since May but softer than forecasts for a 3.1% gain. Month-over-month, prices rose 0.3%, a slight cooling from August’s reading and also below expectations. The report was delayed by more than a week due to the ongoing government shutdown and was the first major economic release since the closure began, giving investors a long-awaited pulse check on the economy. The CPI data did little to shake the near-unanimous investor confidence in coming rate cuts from the Fed. Around 99% of bets are on a quarter-point cut next week, while some 96% of traders expect another slash in December.